4 Easy Tips for Investing in a Commercial Property

Investing in commercial property is an option that many investors considers from time to time as a way to expand their asset portfolio. Commercial property options for investors usually includes office spaces, retail spaces, stand alone shops and vacant plots.

Here are a few things to consider when purchasing a commercial property:

Location. Owning a retail space in certain commercial areas can net in higher rentals and their value also increases at a higher rate. Choose a commercial area where the value and demand of shop is high; shops located among main roads have more visibility, accessibility and are therefore better options. If possible, purchase a commercial property that is located in a specialized pocket such as tailoring hub, computer market or a food street; demand for property there is usually higher.

Weigh your options carefully. Buying a retail space in a mall is a better option than a standalone shop, since retail spaces in malls offer facilities such as security, utilities and a higher number of customers. Similarly, the resale value and the rental yield of an office space are higher when compared to those of a retail space.

Renovating and Reselling. Retail spaces and standalone shops that are sold as many empty spaces (without any renovation work or fittings) are slightly cheaper than those which have been customized according to the kind of business they were being used for.
Therefore, a good option to consider is purchasing an empty space, renovating it, and then selling it for a higher price or renting it out at higher rate.

Vacant Plots. Purchasing a vacant commercial plot in an area that is being developed usually proves to be a lucrative option in the long run because its value and demand increases faster than that of a built-up property.

Graduating In Real Estate:Education In Real Estate

Although the real estate business in Pakistan grown substantially over the last two decades, the fact remains that the people engaged in the real estate do not possess the required training or the expertise. This has resulted in lack of transparency and unwarranted price fluctuations.

Ideally, local colleges and universities should offer real estate certification courses that provide students a practical knowledge of all aspects of the real estate business- from real estate economics, finance and law to community planning and urban development. Unfortunately, no such courses or degree are available in Pakistan.

As there is no regulation and no required licensing, almost anyone can open a real estate agency and conduct business; the business is unregulated and does not have defined standards.

For this sector to have a streamlined system and transparency, a few concrete steps must be taken. One way to tackle this would be to make it mandatory for all real estate agents to have a license or certification before stepping into the profession. Not only will this regulate the real estate business across the board, it will raise additional revenue for the provincial governments, which could then charge a licensing fee. Licensing and regulation, in turn, will help maintain property prices at realistic level.

Currently, property sellers seek advice from non-professional, unregulated property brokers who usually quote inflated prices instead of actual values, leading to market instability. This is best illustrated by the fact that in Pakistan, real estate prices have recently increased by anywhere in between 100% and 150%, in sharp contrast to the international real estate markets which have witnessed drastic falls in property price (by 50% to 70%)

Only when obtaining a license becomes mandatory will property transactions be streamlined and gain the transparency that it is lacking in the real estate sector.

Interest In Art As Investment: Experts Opinion About Art Investment

 Unlike the West, interest in art as investment is at a nascent stage in Pakistan. Answering questions on investment basics, three galleries directors in Karachi, Sameera Raja of Canvas, Riffat Alvi of VM and Seemah Niaz of Unicorn voice their opinions about consumer attitudes and art awareness levels.

 Is Art Investment On the Rise Now?

Sameera Raja: Art investment has taken a nose dive since the recession. Personally, I feel this is positive, as earlier all kinds of works being acquired as investment with no understanding of their quality or caliber of the artist. the buyer now has become more disconcerting and capable of shifting chaff from grain.

Riffat Alvi: Art investment  is a seller market these days, old buyers are cashing in on previous investments and most new buyers are buying with the intention of gaining rapid returns.

What Advice Would You Give To First Time Investors?

Sameera Raja: I have always maintained that your acquisition should foremost be based on personal liking. You have to live with the works; if you do not love it, do not buy it.

Seemah Niaz: Buy good contemporary art that appeals to you. It will automatically enhance in value.

Do Buyers Invest Primarily In The Reputation And Ranking Of An Artist, Or The Aesthetic Value Of An Art Piece?


Sameerah raja: People buy art for both reason aesthetic and social, while some buy it for investment purposes as well. There are very few collectors in Pakistan, though the term is used very often and loosely to encompass all buyers. Each of these patrons acquires art for his/her reasons, which i felt are self explanatory.

Riffat Alvi: It is the aesthetics of the art object that impact or the buyers at first sight.

Seemah Niaz: Mainly for the reputation, unfortunately.