IN THIS POST
– Diversification of Portfolio
– High Return on Investment
– Reduced Risk
– Longer Rental Contracts
– Better Maintenance
Did you know that investing in shopping malls can be a great choice for your real estate portfolio? If you are looking for a low-risk and high-rewarding property investment option in Pakistan, commercial real estate developments such as shopping malls should be at the very top of your list.
Wondering why?
Well, for starters, the demand for mixed-use developments in Pakistan is presently at an all-time high – a fact that has drawn the attention of domestic and overseas investors alike. Secondly, the prices of retail units across the country have also seen a significant rise over the last few years, highlighting a significant shift in the real estate market.
Since we have already discussed the most attractive features of high-end shopping malls, it’s high time we talked about the advantages of investing in shopping malls and what makes them one of the perfect investment opportunities in Pakistan.
What are the Benefits of Investing in Shopping Malls?
Here are some of the most noteworthy benefits of investing in shopping malls in Pakistan:
Diversification of Portfolio
Buying a shop as an investment, especially if it’s located in a shopping mall, is a rather effective way to expand your real estate portfolio. Savvy investors always look for diverse investment options that offer a safe and consistent stream of income.
One of the best habits of successful real estate investors is that they develop a niche and then focus on it. So, if you are a beginner looking to do the same, investing in a shopping mall may be a good start. Also, in case you are confused about investing in commercial vs residential real estate, our in-depth comparison between the two might help you out.
High Return on Investment
An aesthetically pleasing and beautifully designed shopping mall located in a popular neighbourhood can generate a higher rental yield compared to almost any type of residential property.
Apart from offering a great return on investment (ROI), the value of commercial buildings also appreciates over time, granted they are properly maintained. The development of new housing schemes in the vicinity as well as the completion of infrastructural projects nearby can also increase the value of a shopping centre.
The data accumulated by Zameen.com, the best property portal in Pakistan, shows the demand for commercial units in Lahore saw an impressive hike of 106% between 2018 and 2020. Similarly, the demand for commercial property in Islamabad also increased by 96% between 2016 and 2019, which is a testament to the growing popularity of such investments.
Reduced Risk
There is no investment without risk. However, when it comes to investing in shopping centres, the reduced risk is among its biggest advantages.
Since a shopping mall is a shared space with numerous stakeholders, the risk is more evenly spread across many parties. In comparison, if you buy a residential house or an apartment, you will have to face the risk that comes with it all by yourself.
This is yet another factor that makes shopping malls one of the most secure investment options in Pakistan.
Longer Rental Agreements
Finding tenants for commercial properties such as a retail unit in a shopping mall is much easier than finding a tenant for a residential property. This is because the administration of the shopping mall usually takes care of the advertisements, tenant screening process, as well as rental contracts.
Moreover, instead of individual tenants, shopping malls are mostly occupied by reputable domestic and international brands owned by well-known corporations. In stark contrast to the regular agreements, the tenancy agreements for property in shopping centres are usually for a relatively long span of time.
Better Maintenance
Shopping malls have their separate management that is responsible for the maintenance and upkeep of the property, which means investors aren’t responsible for minor repairs and touch-ups. In addition to that, the cleanliness and general state of a retail unit can have a huge impact on its sales, which means tenants also ensure their shops are spick and span.
Another notable benefit of investing in a shopping mall is its shared amenities. Unlike residential properties where the owner has to pay for the repairs and installations, the management of the mall takes care of security, décor, backup generators and other systems.
To conclude, investing in commercial real estate, particularly shopping malls, comes with a lot of benefits. It is one of the most secure avenues to invest your hard-earned money while enjoying high rental yields and ROI.
If you are a real estate market entrant, make sure to check out these factors for buying commercial property for investment to make a well-informed decision. For more tips on how to buy commercial property in Pakistan, stay connected to Zameen Blog.
You can also write to us at blog@zameen.com and subscribe to our Facebook page to receive the latest updates about the real estate trends in your city.
