If there has ever been a good time to invest in the real estate sector of Pakistan, this is it. Apart from being one of the most lucrative and convenient investment avenues, this sector has always enjoyed strong confidence within the expat community as well. With significant growth in the residential and commercial developments across the country, overseas Pakistanis now have more options than ever before to dip their toes in the property market.
The real estate investment shift from plots to high-rises is no secret. Owing to rapid urbanisation and a host of other reasons, the popularity of apartment projects has seen a substantial rise in Pakistan. Even within this category, buyers have a lot to choose from. Depending on their budget and lifestyle requirements, they can either opt for conventional flats available on affordable price or buy high-end luxury units with top-notch facilities. They also have an option to purchase a deluxe penthouse with a picturesque view of the cityscape or consider investing in hotel apartments – an emerging trend in the commercial hospitality industry of Pakistan.
While the other types of apartments have been popular for ages, hotel apartments are considered a relatively new investment prospect in the thriving real estate market of Pakistan. Therefore, it is only natural for buyers to weigh their options before investing their hard-earned money in a project featuring these luxurious commercial units.
In case you also find yourself stuck in the hotel apartment vs residential apartment debate, here is a useful comparison between the two that may help you reach a well-informed decision.
What are the Hotel Apartments?
First things first, a hotel apartment is a fully-furnished apartment that is available for both short and long-term stays.
Also known as serviced apartments, these commercial units are equipped with all the amenities and facilities associated with modern hotels, such as housekeeping, valet parking, concierge and room service, among others. However, at the same time, they provide their residents with the comfort, privacy, space and convenience that comes with living in a residential apartment.
In other words, serviced apartments are a perfect balance between traditional hotels and residential apartments, offering residents the best features of both property types. They are becoming a popular mode of accommodation among business executives travelling for work as well as tourists looking for a space with physical dimensions of a flat and facilities of a world-class hotel – a fact that has drawn the attention of domestic as well as overseas investors towards such projects.
The ultramodern complex of Mall 35, Rawalpindi, is a fine example of mixed-use developments offering high-end hotel apartments with outstanding amenities. A joint venture of Zameen Developments and EBCO Constructions, Mall 35 is the first and only project in the city that houses state-of-the-art serviced apartments along with well-designed commercial shops, vibrant food court, mega hypermart and sophisticated office spaces.
You can find out more about investment options in Mall 35, Rawalpindi here.
Investing in Hotel Apartments vs Residential Apartments
Here are some major factors you must take into consideration when deciding whether to invest in a serviced apartment or a residential apartment.
- Purpose of investment
- Demand in the market
- Rental income and return
- Professional management
- Facilities and amenities
Let’s discuss each of these parameters to evaluate whether investing in hotel apartments would be a good option for you.
Purpose of Investment
Your decision to choose between serviced apartments and residential apartments depends largely on the purpose behind your investment. Are you looking to buy a property for self-accommodation or are you planning to use it for income generation by putting it up for rent? Do you want to hold on to the real estate for now and then resale it at a later date for high capital gains?
Generally, buyers investing in apartments either plan on living there themselves or as turn it into a rental property for potential tenants, ensuring a stable monthly income while sitting at home. On the other hand, most investors see hotel apartments as an affordable and hassle-free way to enter the commercial property market, as this investment allows them to earn a daily rental income while maintaining ownership of the property.
Demand in the Market
Another important factor in the hotel apartment vs residential apartment debate is their respective demands in the market. While apartment living is continuously becoming more popular across Pakistan, buying serviced apartments is also gaining traction in the commercial sector due to their exceptional facilities and personalised services.
If you look at the real estate market of Rawalpindi, where Mall 35 is situated, the demand for commercial units in the city has increased by 94% between 2018 and 2020, according to the data compiled on Zameen.com – the leading property portal in Pakistan. The demand for apartments in Rawalpindi has also increased by 107% during the same period, demonstrating a shift in the preference of real estate investors in the region.
Rental Income and Capital Appreciation
Hotel apartments appeal to both short and long-term renters. This means it is generally easier to find a tenant for hotel apartments compared to residential apartments. These commercial units also offer higher yield through daily rental income, whereas apartments generate revenue on a monthly basis and are usually suitable for long-term tenants.
Capital appreciation is another factor that must be taken into account when it comes to real estate investment. In this regard, investing in serviced apartments as well as residential apartments appears to be a promising option for those seeking high returns a few years down the road.
Coming back to Rawalpindi, the data recorded on Zameen.com has shown a 43% increase in the average per square feet rate of commercial units in the city over the past three years. In a similar fashion, the average per square feet rate of flats also rose by 44% between 2018 and 2020 while the average per square feet rate of shops saw an increase of 36%.
Buying a property does not guarantee capital gains. Choosing and purchasing real estate is only half the battle won. Whether you are a budding investor seeking high capital gains on your investments or a pro looking to diversify their investment portfolio, the responsibility of maintaining and managing your property usually falls on your shoulders.
One of the most common reasons why most overseas Pakistanis prefer buying plots in secure gated communities compared to houses and flats in the city is because managing the rental agreements and collecting rent can be rather hectic – especially when you are not living in the country.
However, in the case of hotel apartments, the developer or their designated management team takes care of the tenant-related matters all by themselves and transfers the rental amount to the owners account on a regular basis. This team of professionals is also responsible for maintaining the space and keeping it in shape.
This also makes a project like Mall 35, Rawalpindi, one of the safe investment options for those looking to buy a hotel apartment. Thanks to highly-qualified management, there is no chance of someone illegally occupying your property while you’re away. Overseas investors don’t have to worry about tenants misusing the premises or defaulting on their scheduled payments.
Facilities and Amenities
Modern residential projects in Pakistan usually offer investors a wide variety of top-notch facilities and amenities such as backup power generators, designated parking spots, high-speed elevators, and well-equipped gyms, to name a few. These projects are also situated at prime locations, adding to the features that ensure a quality lifestyle among their residents while guaranteeing a high rental yield.
Interestingly, hotel apartments provide buyers and renters with all of these facilities and more.
For example, Mall 35 located in Saddar, Rawalpindi, boasts an earthquake-resistant structure, AI-supported power conservation system, advanced temperature control system, high-tech security system, fine-dining restaurants, play area for children, and much more. In addition to that, the hotel apartments in Mall 35 offer a host of value-added services to their guests.
Here are some more elements that make Mall 35 a roaring success in the heart of Rawalpindi.
There you have it, a comprehensive comparison between investing in hotel apartments vs residential apartments. Although investing in hotel apartments can ensure higher capital gains compared to residential apartments, it is solely the responsibility of the investors to undertake due diligence of the development before striking a deal.
If you are interested in buying commercial property in Mall 35, we urge you to take immediate action as almost 90% of the units in the shopping and apartment complex have been sold, leaving the developers with a limited inventory of shops for sale. To learn about the Mall 35 payment plan and investment options, please get in touch with the property experts at our 24/7 Sales Centre by dialling the helpline that is 051-111-333-333.