DHA Commerical Analysis in current market
In today’s study we’ll look at the DHA Commercial connotations starting from Phase 5 and onwards to investment oriented commercials. This study will incorporate mature, semi-mature and immature commercials. We will also be able to identify the maximum returns for each commercial. This is going to help us identify the best option for our commercial needs and investment orientation.
Phase 5 commercial
Phase 5 commercial is relatively a mature market in comparison to Phase 6 and onwards. The CCA market of Phase 5 is considered the optimum buy as the rents are higher. The prices of commercials are also higher in CCA compared to A block, B block and D block commercials. Due to lack of activity in A, B and D block they aren’t considered good for either investment or rental returns. In Phase 5 we aren’t looking at a high ROI in terms of investment e.g. in the last one year 15 million have been added to 8 marla commercials on an investment of 145 million which is only 10.35%.
But if we incorporate the rental it turns out to be great. Example: 160 million for a plot and 30 for construction 190 million total and expected rental is 0.9-1 million which is 12 million annually. So 15 million increment in plot price per annum plus 12 million rental is 27 million on an investment of 190 million total which is 14.2% which is hefty compared to other commercials in Phase 1-4 which don’t see this much increase or high rental value due to lack of 2 additional floors which are allowed from Phase 5 onwards.
This also gives us a chance for encashment of 1 million from our investment on monthly basis compared to selling a plot to realize profits.
Phase 6 is divided into A, C, D, MB and L block commercials. For this discussion we will leave out L block commercials as they don’t seem that much lucrative in terms of investment or rental returns as of today.
A block commercials
A block commercials in today’s market are considered a good option the ones on main road as far as rental returns are concerned. The commercials facing inwards don’t give high rental returns. The reason is that inward plots have similar parking as of main road which is 30 by 30 feet. From a marketing point of view it’s not prominent. The new A block commercials are not that charming as of today but in times to come they can be considered ideal for rental returns and from an investment point of view. Only go for a main road commercial if you want to invest in A block commercials.
C block CCA 1
C block DHA commercial are a good option from an investment point of view. In this CCA 8 marla are viable compared to 4 marlas. The gap which concedes 30 million in 8 marla plot which is facing parking will definitely go down as the market matures. 4 marla plots are lucrative but only the ones facing 70 feet road. The reason is that these plots which have a gap of only 2.5-5 million which is understandable therefore, it’s better to invest a bit more as this gap won’t close but we can expect it to be same or widen by 1-2 million further as the market matures.
D block CCA 2
CCA 2 DHA commercial of Phase 6 are good for investment purposes but only 4 marla plots. For 8 marla plot at 850-1050 lacs we have a multitude of good options in Broadway. 4 marla good options should be catered for the longer run. CCA 2 will take a while to reach near the prices of CCA 1 as of today. The reason is firstly possession hasn’t been given as yet, secondly the roads inwards are a major drawback as they are of only 30 feet. The good thing is the price as of today and from a future perspective the residential populous surrounding the area which is increasing daily. This increase in population surrounding the area would see a definitive increase in price of commercial.
Mb commercials have seen a rise in prices even in the slump of the property market. The reason being it’s a mature market. The only immature options which can be considered from an investment perspective are the numbers of 185/ series plus the 8 marla options farther away on MB main road and back of main road.
MB in the first three lanes is considered worthwhile but not solely from an investment perspective but you have to build a plaza on top. The reason is that it would see a slight increase in prices in a plot but you’d miss out on the rental which altogether make up for a hefty return. Constructing a plaza for only 15 to 17 million would give you an extra 7.2 – 7.4 million per annum.
Phase 7 had seen a rise in the prices previously in the first half of 2016 before the market correction after taxes in July, 2016. Now the prices are 5-6 million lesser than the hype reached previously. Phase 7 from an investment perspective should be left out altogether.
There is no need for commercial as of today. But yes in 4 years down the road if you can’t afford a decent DHA commercial as of today it is recommended that you invest and hold on to it for 3-4 years. There are a multitude of options to choose from CCA 1 to CCA 5. It is recommended that you buy in CCA 4, CCA 5 and CCA 3. CCA 1 would be a last option from investment perspective as it might not give you a high ROI return on investment. CCA 1 has the best location on a comparative basis but you lose out on the yield on investment.
In Phase 8 we will discuss multiple options as there is a huge number of commercials and a multitude of investment options. We will discuss Ex Park View, Ex Air Avenue, Broadway, CCA 1, CCA 2 and Z block ivy green
Ex Park View
Phase 8 Ex Park View is seeing a steep rise in residential houses which in turn would mean an increase in the prices of commercials. It is highly recommended to buy a 4 marla file as the rate is only 26-7 million for Malik Pur and 24-5 million for Shiv Pur. These are two mauzas of which the files have been allocated. The reason for purchase of these files is they are highly underpriced because an 8 marla commercial plot would cost you anywhere between 80-90 million. These files once balloted would give us a hefty 50-60% returns. The ballot is expected within a year’s time.
If you are interested in purchasing a plot it is recommended you buy the 16 marla plot instead of 8 marla as 16 marla would give you a higher ROI. These commercials are facing the main road therefore, a holding period of 3 odd years would give us hefty returns compared to 8 marla which are facing the back of main road. 16 marla would cost us 145 million up to 170 million depending on the location.
Ex Air Avenue
Phase 8 Ex Air Avenue is again a populated area which has little commercial activity due to the abundant supply of commercial plots, therefore, the commercial activity seems scattered. In Air Avenue procurement of 4 marla and 32 marla is recommended. The reason for the 4 marla option is because of the underpriced commodity in comparison with other developed possession areas of Phase 8. 32 marla option is highly recommended because of the lower prices plus a 32 marla allows for a multitude of options for commercial activity. For anyone looking for a higher yield in times to come both 4 and 32 marla are very lucrative options. Holding period recommended is 5 years for both.
Phase 8 Broadway is going to be the heart of DHA commercial activity in the new phases of DHA namely, Phase 6, Phase 7, Phase 8 and Phase 9. Although there is an abundant supply of commercials but there are only a handful of decent locations in which investment is highly recommended. In Phase 8 Broadway it is advised to buy an 8 marla plot or a 4 marla at a decent location or wherever you get value for money. Phase 8 is going to be the shopping center of the future in DHA.
It is definitely going to cross Y and Z block within a decade’s time. From an investment perspective Broadway is at its lowest right now as the prices have seen dip in some areas and stable in some other locations. In the past Broadway has given as high as 70%-90% returns to its investors.
CCA 1 and CCA 2
CCA 1 and CCA 2 Phase 8 have seen a dip in the prices after the slump of the property market. I wouldn’t recommended buying in CCA 1 or CCA 2 because very lucrative options present themselves in Broadway at similar or lesser prices. The only good option in these commercials which can be considered are 8 marlas on good locations and 4 marlas on good locations but only in CCA 1 as the prices are lower than CCA 2.
Phase 8 Ivy green
Phase 8 Z block or IVY Green isn’t much lucrative as of today. But in times to come after 2-3 years once the possession is given we see a good rise in prices. The problem is it’s a cut of artery of DHA but on the bright side it’s going to be a gated community.
It is advisable to hold a position until possession and liquidate it once the possession hype is reached otherwise you won’t be able to gain good returns for either long term or short term holding. The only expectation is the possession hype and yes it will give hefty returns on investment then. DHA commercial of Z block or IVY Green might turn out to be lucrative once possession is given.
Phase 9 Prism
DHA Phase 9 Prism commercials are overpriced especially in Oval inner as well as outer. Possession is expected in 2019 in Prism and it’d take another 10 years to reach the position where Phase 6 stands as of today. Phase 9 is the biggest phase till date and this means that it’ll take longer to get populated. The only better options are zone 2 commercials of 8 marlas which aren’t that overpriced compared to other options in various other commercials.
Phase 9 prices are a bubble which might or might not burst as there is a large playing ground for investors until possession. This large phase has a lot of stakes of a lot of investors and end users. Phase 9 commercial bubble is what persists and seemingly might not go down then again might not be as lucrative as other options. Yes this bubble can grow further if one is willing to take the risk. The only way to make money genuinely in Phase 9 is to buy a commodity when Prism market starts going up and encashment of profits when you exit.
For longer term holding it is advisable to buy any commercial in any area Zone 1, Zone 2, Zone 3 or Oval for a 5 year holding to get the maximum gains. These gauge for prices is not what the market dictates it’s a professional assessment of a commercial by an expert. Feel free to discuss with us regarding this.
DHA Rahbar Phase XI
DHA commercial of Rahbar will be high yielding once the ring road is open. The very lucrative opportunity which presents itself right away in Rahbar is that of a 4 marla file of Phase 2 extension. The ballot is just around the corner. It is highly advisable to procure a file and sell once balloted to gain upto 30-40% returns in a very short span of time. The plot prices are twofold or more in Phase 1 of DHA Rahbar.
DHA Rahbar files will give high returns once balloted which is expected very soon. As far as plots go it is not recommended to buy a 4 marla commercial plot in Phase 1 or 2 as of now as they would yield good returns but once the ring road is open. This ring road price increment plus ballot increment is found only in the file. 4 marla plot shouldn’t be negated in terms that you can build a plaza right away for rental connotation.
This study DHA Commercial Analysis in Current Market gives us an insight to all available lucrative options DHA presents us. This study helps reveal the major areas of investment in which money is to be made along with giving us an idea of maximum returns versus time frames. For further guidance it is advisable to contact me on my number.
MBA Finance (Cardiff University, UK)
Managing Director Imlaak
(+92) 320 8484630 (for consultation)
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