Unlike residential projects, investment in Office Spaces in Pakistan can be safer in many ways. It diversifies the portfolio and helps earning good rental income. Offices are now a trending component of commercial real estate.
Pakistan is now developing fastly with emerging commercial projects including corporate units. The sellable office’s requirement has increased due to innovative startups and businesses being introduced in Pakistan and people are heading toward the corporate sector majorly. Many investors are encouraged to invest in Pakistan real estate and we also receive foreign investments.
So, we are getting investment inflow for residential and commercial projects both. Unlike residential properties, commercial units need less to be maintained and the tenants are easy to deal with. When we talk about commercial projects we are not considering only high-rise huge buildings but we are mentioning retail units, corporate units, offices, and many more lie in the category. In this article, we are going to tell you if you should invest in office spaces in Pakistan.
The answer to the above-asked question is definitely, YES! See the reasons why should you do so.
Reasons to invest in Office Spaces in Pakistan
There are many reasons why the real estate tycoon Sam Zell says, “I think retail is much more of a falling knife than office, and I think that office is likely to recover much quicker than retail.” The offices are now in a trend of real estate investment activity due to rising offices demand for some considerable factors such as;
After seeing that nowadays residential and retail projects lack the chances of getting higher ROI people have started to diversify their investment to shift the risk burden by investing in office spaces. Buying the office helps you earn with more certainty and fewer fluctuations. If a residential investment starts making less profit or low income and retail units don’t generate enough profit then the office units will have your back by providing a smooth and reliable investment environment because in offices the employees are not likely to shut down the office on short notice. Plus people are always ready to buy offices to meet their organization’s demands like expanding the teams and branches.
Flexibility in Receiving Rent
Residential and retail tenants are the most irritable tenants sometimes. They delay the payments for any reason. But in offices, the rent burden is usually shifted to more than one owner, the offices never bring you late rent because of stability in the environment and the behavior of the members. The office owners keep the rent and utility bills as a preferred liability to pay off as soon as the month starts, unlike a retail shop owner who first purchases the supply inventory for his business.
Revival of Office Work
After the pandemic COVID-19 people have realized the importance of a workspace. They were told to work from home. The idea seems quite interesting and easy, but it is not that fun when you have to attend a zoom meeting with disturbing surroundings. The employees are eager to work in a proper set-up and work space. Many have preferred office work rather than working from home. Moreover, many companies downsized their employees and after the end of the pandemic, they needed new employees urgently and needed new workspaces. So, this fact automatically increased the demand for office units and ultimately increases the rate of office investment.
Adapting Hybrid Working Style
After working from home, people didn’t stay a big fan of office work. They now demand a hybrid workspace that includes recreation facilities like swimming pools, restaurants, gaming zones, gyms, and many more. So reserving whole floors for offices in highrise buildings has become a new trend. The companies know that the working efficiency of the employees increases due to the optimal combination of recreation activities and workspaces. So, the more developers start to include the offices in the projects, the more demand for the offices will increase.
More Hirings bring More Demand
The investors are likely to sell the offices at a high profit because many organizations hire staff to continue to expand the business in the shape of big new branches, and offices. So, the chances of finding new tenants or buyers increase automatically. The investors will have maximum chances of getting a stable and high-yield profit out of investment in office spaces.
Mistakes to Avoid While Choosing an Office Spaces in Pakistan
The office investors and owners have their first deal at some point. They make some obvious mistakes that are not noticeable at the moment but the owners have to pay a lot in the future. Here we are going to tell you about the mistakes you should avoid to become eligible for office space investors.
Hurrying will cause the problems
Many people search for offices in a hurry because they think that they don’t need to consider elements like residential projects. Most properties are vacant due to any reason but the owner is willing to sell them at a low price. So, if you’re in a hurry and buy that without knowing the actual value and reason behind the vacancy, then you’ll be the one bearing loss. On the other hand, you might judge the office space by the more vacancy rate but it might suit all your requirements. So make your decision wisely and choose a suitable office space.
Taking the lease contract easy
The number of office employees is more likely to expand over time. The investors are advised to sign a flexible lease contract to avoid any inconveniences in the future. What if you want to change the office but you’re bound to complete the lease? Or if you want to sell the property as an investor and you’re getting a good ROI but the inflexible lease stops you from earning it. Sign the lease plan by thinking over and over about every aspect.
Only depending on the rental income figure
Some building owners charge less for the office rent and it tempts investors. They don’t see the hidden expenses like poor electrical and plumbing connections, old generator installations, or installing new ceiling and floor tiles. It also includes monthly recurring costs of offices. So, the cheaper at first might cost you a lot in the future.
Just getting impressed by the working space
The investors only see and consider the working space in which employees are going to work. But after an increase in the demand for hybrid working spaces, the investors have to consider reception, cafeteria, fitness room, lounges, waiting area, meeting room, and presentation rooms. The offices lacking mentioned facilities will have the least demand and ROI.
After ages, now real estate investors head towards investing in corporate offices. They are preferring offices due to the stability of receiving the rent on time and finding new buyers quicker than the residential buyers and tenants. Many factors play important role in increasing the demand for office spaces and builders are convinced to add more offices to their projects. So, one is always encouraged to invest in office spaces by following all the mentioned precautions.