BT Rawalpindi, 15*20 muhalla plots, are now available at dirt cheap price and safari valley sectors are being populated on the steady pace. Buy a plot at <28 lacs, spend 15 lacs for a shop at ground and a flat at top.
You can easily get 18+15=33k rent while you invested maximum 45 lacs. I am rather sure these plots will pick up in the value in near future, may be within 2-3 years’ time. Rental value is probably best among all other options in the area.
What the experts say?
You asked the experts which I am certainly not included in, but will offer my 2 cents to hopefully get the discussion started.
The rental to investment ratio is competitively favourable although I wonder with safari valley population increasing gradually, what would be the first/initial areas to attract businesses. Will it be these small mohallah shops or proper commercial areas and boulevard shops. Business volume is expected to stay low and scattered initially, and thus I would expect business to funnel through to main commercial areas initially, and these mohallah shops will attract enough business to survive only later once the mohallahs around them get more population. I do see the expected difference in rents between these small shops and proper big shops in commercial areas, but in my opinion market forces with likely lesser demand and smart investors of the main commercial areas will keep their rents low in the beginning to attract businesses.
Good approach, Musafar Sahab, but my write up is based on the practical observation.
In Abu Bakar, the very same 15*20 has already been rented at 18K + 15K, 18 being the ground shop and 15 being the flat. My focus is on the rent NOT at all on the investment, it also is likely to appreciate in near future though!
I think, at the stage you are projecting, these plots will cost like fortune and the ROI may not be as good as it is now!
These shops go to the Muhalla general stores, beauty shops & tailors etc. These renters can easily afford the prevailing rents. These plots were sold at 18-20 lacs and went up to 60 plus lacs and now on the correction. Shop rental is always thought much better than the house renting. Presently nowhere else this ROI is available on the small investment. Neither in DHAs nor in BTs.
I am only a student of this field and try to learn from the likes of you Abdul Qayyum Sir.
Let's see a comparison and discuss for my learning and may be others. A 30 x 40 plot in commercial areas in safari valley is ~120 lacs. They allow to build a basement + 4 floors, which will perhaps take another 10 million or so for construction. Thus this plaza will cost ~220-230 lacs. I think a businessman doing any business have a better chance of surviving and making profit in this area, as opposed to mohallah shops. Let's keep a relatively lower rent for this plaza which is not going to have a lot of businesses looking for renting it easily right away. Basement=30k, 2 shops on ground and 1st floor, each shop=20k, the shops on 3rd floor 15k each and the two apartments on the top floor 15k each. Total rent 170k
Let's make the figures more conservative, plaza price 240 lacs, rent 150k. The rental to investment ratio is still competitive to your mohallah small unit. The future value of a proper commercial plaza and rental return is way different though in my opinion.
Now think of yourself as a business man and wanting to rent a shop in safari valley, would you not prefer a shop at 20k in a proper commercial area as opposed to a shop in a mohallah at 18k?
I do agree that this plan needs 220 to 240 lacs while your small unit needs 40 to 45 lacs and everyone might not have that kind of cash, but comparison for those who might be able to afford investing more.
Good idea and I like it because someone inexperienced in commercial property can test the waters by making this relatively small investment. How many of these are available in Safari?
I like it. Not bad for the amount of investment. Is it possible to pick up a plot for 25 lakhs? Is it allowed to make a basement?
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Musafar Sahab
Sir, your approach is surely more than a learner. In fact I am a learner around here!
My audience were the small business people who want to invest and need to get monthly rental as well.
Unfortunately, very less people focus on these souls in this forum.
Muhalla commercials have a distinct feature of being in vicinity of houses and resident prefer to walk to get their meat, groceries, vegs, kid’s stationary etc.
The bigger commercials also need LIFTs and call for very costly ground structure and the related taller tower’s construction BT standards.
With 2.3 crores, you can get 8 or 9 no of these mini 15*20 plots and build one by one at your own pace and resources and you will be amazed that after 2-3 years, you will be having a handsome income on monthly basis. If you want to sell, you will get more profit than selling a mere single plaza.
Bigger commercials BT phase-8 are over supplied as there are as many as 12 existing commercials and more are coming such as sector M/E etc.
Also, these plots were bought in lots by big boys and word of mouth is that Ali Riaz has already consented for 3 floor rather than 2 floor construction. BT planning does not have this info so far but Raja builders are confident that verbal approval has been attained.
You can build a basement and ground shop or ground shop and a flat at top.
@ Kami
These are available in all safari valley blocks at less than 28 lacs.
Looks good.
Abdul Qayyum bhai any idea when M&E commercial is coming. And what is the status of M block development?
Dear Abdul Qayyum,
Safari Valley Abu Bakar,Ali and Usman block is one of best investment because of all basic facilities and all most populated.It's good time to purchase because of slow market.
Regards
Naveed Bhai
As I wrote before somewhere here that the last time I was in Pakistan, I tried my best to get one commercial in sector M, It was promised by Advice property but the deal could not be materialized.
We tried to trace the actual owner but failed to find one and abandoned the buy-out.
It was told that 1 Kanal commercial in sector M/E was available at 1.20 crores.Although Advice is reputable but I still think there was something to this deal?
I am proceeding to Pak next week and shall try to see BT development pace in far sectors and will post accordingly, In Shaa Allah.
Nadeem Bhai
My projection in nothing if placed beside yours but I think the same way you do.
These plots are down on the high commercial-supply versus the house-occupancy ratio but we will see within couple of years that at the very same construction pace, these 15*20 will prove better than the bigger commercials.
Also if BT main office shifts to new location, the bigger commercial may or may not get affected but these Muhallah plots will never get affected.
Abdul Qayyum sahib! I have a question for you or any other member here who might know the answer. We say and hear that commercial plots in phase 8 bahria are oversupplied. Does anyone know what the ratio is and what is a healthy ratio. Are there any such standard or accepted statistics available anywhere from an authentic or reputable source. How is this ratio in our current Islamabad, and how is it getting affected when a lot of residential units are being used for commercial purposes (like offices, clinics etc.) while the proper commercial units are also occupied fully. Thanks
Musafar Sahab
One common gauge to work around your query is the “prevailing prices” of the commercial units.
The situation like: “If commercials ratio is lower and plot prices are coming down” will never happen, did not happen anywhere. In BT, the people who invested in commercials are crying to get their investment returns!
BT phase-8, more and more commercials are adding to the woes of the existing investors.
90% of the renters are dealers and that is not the most authentic gauge to define the occupancy rate. Commercials always get shine from the actual residents and that is where BT’s big commercials are not a preferred choice to invest for short term as resident occupancy is still slow versus commercial supply.
I am not aware of any authentic formula to determine the rate, you are asking, but it is just a common sense thing, I believe, sir.
That approach you have makes sense Abdul Qayyum sahib but only in the short term or at the present time. Projecting forward for more occupancy as people start living in phase 8, the story could be very different. Phase 8 getting populated is not anything uncertain except that a few years are still needed. You're right that those who want to get money out at this juncture are expected to have issues as the market is very slow. Also those who want rental income right away might not be very happy either as dealers are the only kind of businesses operating there currently, although population is steadily increasing and it might not be long before businesses of other kinds will start increasing as well.
Bottom line, this is not the time to get out if one can avoid it, although could be ideal to get in for those who either have a plan to stay in permanent or at least 5 years.
Agreed what is versed in the bottom line, Musafar Sahib.
If I had 2.25 crores, as you said earlier, I would have no hasitation to get a commercial in DHA-2, A-H, and would get an immidiate good return, rental wise.
What can 2.25 crore get in DHA-2, A-H commercial, I mean plot or shop/plaza, size? Thanks Abdul Qayyum sahib for a useful discussion
@Qayyum sbb…Sir no commercial plot in any good project is available in dha 2…Good location plots with handsome rental yield plots start from 33 million approx…YEs i can agree that over the horizon of 7 years with more population getting in for bt phase 8, commercial can be fruitful but one has to remember that it is a long term venture…Musafar sir i tried but i am unable to find any such stats but it is evident that ratio is certainly disturbed…Also one big impediment is the slow ccuance rate of bahria phase 8 due to location but once populated, surely commercial can be a good venture in long term. BTw commercial prices are still slipping down in phase 8 and i think it is not the right time to enter commercials.
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