Downtown Mall Liberty Investment

DOWNTOWN MALL LIBERTY INVESTMENT

Lahore real estate market has been shifting slowly towards developmental and construction projects in the past few years and in the 2019-20 budget it is further endorsed due to the policies laid out by the Government. Downtown Mall Liberty Investment is one of the latest projects imlaak.com has endorsed if you want to invest smartly for high returns in the real estate sector of Pakistan.

The above stated fact is also supported by the rhetoric from the Premiere followed by finance secretaries, finance minister and chairman FBR, who openly stated on media at various occasions that they intend to bring change to the real estate policies so as to encourage Construction projects instead of files or plots where development is not possible for years.

A World Bank study suggests that Pakistan needs vertical development or else we will soon be facing shortage of land due to our population. The agenda behind this change is to allow the construction industry to progress which further helps the economy and industry to flourish.

The following policies which support these plans announced in budget 2019 -20 are crucial:

1. CGT on plots and files has been extended to a period of 8 years where as for residential built up properties it has been curtailed to only 4 years.
2. FBR values of properties have been raised to stop the flow of black money into real estate market.
3. Further concessions and plans to encourage construction of high rise projects are in pipeline.
4. World Bank has already carried out an in depth study to help the Government to facilitate developers to encourage them for these high rise projects.

In addition a market study conducted by imlaak.com where to invest suggests following.

1. Investors in the present scenario are leaning towards real estate which offers rental returns. This will ensure a consistent flow of income and gains even if the property appreciation is slower for some years.
2. Expats are interested in projects which offer installment plans and rental returns as it allows them to hedge against the PKR depreciation which has played a huge role in real estate depreciation in the past 2 years.
3. There is a huge shortage of smaller apartments in Gulberg as per the demand, presently if you want to rent a small one bed apartment in a respectable building it will cost you approx. 70 to 80000 PKR and you will have to wait for 3 to 4 months before you can get your hands on something. This shortage is expected to increase in coming years, thus the demand and rentals of small apartments is set to rise in Gulberg.
4. Lahore faces a shortage of hotels, with only 2 five star hotels, there is plenty of room to grow hospitality business. Occupancy of hotel one in Gulberg is 75 to 80% even in weekdays. No wonder a lot of people are joining in such as Avari express and Ramada who are opening up branches for a piece of the cake.

Investment Plan Downtown Mall

There are two option for investments in Downtown Mall Liberty as under:

1. Capital Gains
2. Rental Gains

Download Brochure of Downtown Mall Liberty

Capital Gains

Like most projects the best capital gains are expected within the first 2 years after launch of the project.  The price of the project when completed is expected to be some where around 35000 to 40000 PKR / sqft.

Apartment Size                                465 sqft

Present price                                    24000 / sqft

Total Price                                        11160000 PKR

Down Payment                                1674000 PKR

30 installments at 2 %                     223200 PKR per month

25% on possession

Possession price                               35000 PKR / sqft

Total capital involved              8370000 PKR (before possession )

Total profit expected               4650000 PKR

Most importantly you do not have to pay the amount lumpsum as the project offers an attractive installment plan and therefore giving you a very high IRR( internal rate of return) Similar prospects exist in other apartments of various sizes and types.

Rental Gains

The developers of the project are offering 7% rental Gurantee, which will increase by 20% every 3 years. This coupled with capital gains will give you a positive NVP (Net Present Value) in 10 years.

Apartment Size       465 sqft

Present price                                                                 24000  PKR / sqft

Total Price                                                                    11160000 PKR

Rentals expected in 7 years (4^th year onwards)               5343600   PKR

Capital gains expected in 10 years                                   60000 / sqft min

Total Value of asset in 10 years                                    27900000 PKR

Rentals expected in 7 years (4^th year onwards)          5343600   PKR

Net gains                                                                        33243600 PKR  

However those of you who are familiar with Internal rate of return and present value can easily calculate that due to regular cash flows in terms of rentals this is a high return investment.

Recommendation

I recommend that if you do not require steady flow of rental returns the best investment in Downtown Mall Liberty with the highest ROI is to invest in our first plan of capital gains.

However if you want to generate rental returns Downtown mall liberty is one of the best options right now available in the market as it allows you to either enter into an agreement with the developer now at 7% rental guarantee or you can enter into an agreement later on after development is complete at a higher rate and finally you even have the opportunity to lend it out yourself.

Captain (Retd) Shahnawaz Yaqub Bhatti

Investment Consultant and CEO at Imlaak

Mob : +92 333 1717170 ( Whatsapp)

Skype : Shahnawaz.yaqub