Where to Invest PKR 40 million in DHA?

Where to Invest PKR 40 million in DHA?

Fourth chapter of the series where to invest in DHA will allow us to expand our horizon of investment further incorporating relative returns on a combination portfolio as well as a singular portfolio. Expected returns on different investments along with risk factors will be discussed. The points and areas of interest will be explained along with a relative market speculative logic, on ground status(es), insider information and investor orientation. Hope this further helps in making informed decision for maximum capital gains.

1.Broadway Commercial Phase 8

A four marla commercial plot investment in DHA Broadway Phase 8 is one of the best options till date available in the market. These four marla will rise with the saturation of 8 marla plots. These plots have seen a hefty gain in the past, at the moment they might be slow but the recognition of the fact that these will be a high yielding investment cannot be foregone. The reason for this is that Broadway is one of the biggest commercial area in DHA. This fact alone underlines the fact that this would be the commercial hub of the future. With the saturation of Phase 8 residential houses these prices are very much likely to increase a multiple fold. In times to come they would be a high rental yielding commodity(ies). How much return can be expected depends on the location of the plot. One there is a natural growth element which will affect all of Broadway,  second is the location which can add up to 25-35% capital gain on top.

2. 9 Town file along with Phase 8 residential

Two opportunities can be en-cashed with this opportunity available in the market. 9 Town file has been discussed before as we anxiously wait for the ballot. We expect the price to reach close to CCA 2 of Phase 6 with a gap of only 25-40 million at the end of the day.

8 marla residential in Y block Phase 8 awaits possession so another gain is expected from this commodity as well. This possession will give rise to a smaller community which will began to surface in times to come. The jump on the news of possession will add premium to the already existing plots.

3. Phase 6 CCA 2

This would exceed our budget by a bit. This commodity might not be for the end user in the near future. But the prospects in the longer term are very bright. This commercial is built around a predominantly 2 Kanal community, ensuring residents with high purchasing power would have to travel far for their everyday needs. There are still profits which can be pocketed just from trading of these 4 marla commercial plots.

Although they have seen a rise in prices but have not yet touched the ceiling. These are comparable options to the existing CCA 1 of Phase 6 in C block. The price gap of 17.5-25 million is something that we expect to narrow down to a mere 5-7 million between both the CCAs. This means that we are looking at short as well as long term profits.

4. Phase 8 Ex-Park View 2 Kanal plot

Phase 8 2 kanal plot in ex Park View is on the rise. Although it might not give exponential gains as other commercial commodities. In order to invest the charm lies in the fact that even in a declining real estate scenario it would increase. In short, the risk factor is minimum if the market topples. This as a matter of fact has been true since the last one year. This characteristic is of a mature commodity, but in this case it is nearing maturity but hasn’t yet matured.

This has shown that compared to Phase 5 or 6 the price increment in this residential has been hefty. The reason is that it’s nearing maturity not yet matured. Both investors and end users alike are buying these plots. In Phase 6 just for comparison purposes mostly end users are buying properties. This element has ensured that the property did not decline in Park View but has given a higher rate of return compared to mature or maturing properties.

5. Park View 4 marla file coupled with 1 kanal Phase 7 plot

Park view file is one of the best options available in the market today as the ballot is expected in the next few months. We’ll safely take it as one year tenure to gain maximum benefit. It is coupled with Phase 7 as compared to Phase 9 because Phase 7 has always seen a slight increase in prices from time to time. Phase 8 Park View file is expected to give as much as 30% returns on investment. In order to invest wisely consider your time frames and risk appetites etc. All factors play an important role in order to invest.

The time where Phase 7 jumped and fell multiple times has passed. This has been due to lack of biyanas by investors and dealers alike. 60% of the plots are being bought by end users compared to only 20% in the past. Phase 9 is not an investment but a liability as you continue to pay installments for development charges. Phase 9 will and is undergoing the same process which Phase 7 has been through. The process which is dictated by investors and realtors, the end user is the one who suffers. Once or twice a year these biyana oriented people would jump in increase the prices, then jump out leaving the end user in vain and at 15-20% loss. Phase 7 has undergone these biyana games which Phase 9 is undergoing.

Conclusion:

The fifth option is the most satisfying out of them all as the risk is minimum but the returns are handsome. It is up to you to decide which model suits you. All investment options have their own specialties, positives, risk appetites which have been explained above. For investment guidance feel free to contact the author. It is for the readers, investors to decide their own risk appetites, time frames, capital gains etc. I can help you out in making these decisions over a phone call or by appointment.

Written by:

Umer Shehzad

Managing Director

MBA Finance (Cardiff University, UK)

(+92) 03208484630