Phase 6 of Lahore’s DHA Most Expensive Property for Commercial Plot

[Salman]

The commercial areas of Lahore’s Defence Housing Authority (DHA) consistently see impressively high demand as well as prices compared to the commercial zones of many other localities in the city. According to an analysis conducted by top property website , prices of commercial units in earlier, more developed phases (Phase I to Phase V) are higher compared to the newly developed and currently under-development phases, but Phase VI is a clear exception.

The average sale price of 4-marla (100 yard2) commercial plots in Phase I in Q1 2015 hovered around PKR 31,540,228, while in Phase III — which is home to some of the city’s most sought-after commercial real estate — same-sized commercial plots were valued at PKR 49,666,668.

DHA Phase VI, however, topped the list with the highest prices for commercial units. According to ’s data, the average sale price of 4-marla commercial plots in the phase clocked in at PKR 59,493,496 in Q1 2015. The DHA has recently moved its central office to the Phase VI commercial area, which might have played a role in the increased prices and demand for commercial units there.

“Property dealers want to be close to the DHA office, and these 4-marla units are perfect for them to set up their offices because they’re not large enough to accommodate a multi-national company or a popular food chain,” says Local Dealer.

“This is what is driving the prices of these units up, especially those located on the Main Boulevard. But this trend is unlikely to last for long, and these prices should come down after a while,” he added.

Later phases such as Phase VII and Phase VIII have not seen comparable demand for commercial units, because of which average sale prices in these phases are relatively low. Four-marla commercial plots in Phase VII and Phase VIII registered average sale prices of PKR 19,150,640 and PKR 29,021,300 in that order in the first quarter of 2015 according to the website.

RENTS

The rental prices of commercial units also presented a mixed picture in DHA with the same patterns as the sale market, i.e. earlier phases with higher demand tended to have correspondingly higher rents, with Phase VI once again the outlier.

In Q1 2015, the average rent for 4-marla commercial buildings in DHA Phase I hovered around PKR 223,200 according to stats, while in Phases II and III, the rental prices of same-sized buildings were lower, around PKR 183,000 and PKR 185,000 respectively.

Phase VI had the highest rental values of commercial units, and 4-marla buildings went for an average monthly rent of PKR 386,000 in Q1. High demand for commercial units and the area’s excellent infrastructure are most likely the reasons behind the high rents. Moreover, Phase VI’s close proximity to Lahore Ring Road also makes it a potentially optimal commercial enclave.

Though Phase VIII is also located close to Lahore Ring Road, it is currently very sparsely populated and sections of it are still under development. Four-marla commercial buildings in the phase fetched an average monthly rent of PKR 130,000 in Q1 2015.

DHA is yet to hand over possession is Phase IX, so there are no commercial buildings in the phase as of yet, but the prices of commercial plot files in the phase are impressively high and could ultimately offer good returns to long-term investors.