1. Market Snapshot
ISLAMABAD | OFFICE SECTOR
2016
Author Name: Kami Noorani | Manager –
Research & Advisory Services (Pakistan)
Forecast at a glance
Demand
Being the federal capital, Islamabad is
home to many government instiutions
and most state-owned companies
including PTV, OGDCL and PTCL.
Supply
Bulk of the office space in the city Is
located on Jinnah Avenue and its
periphery. Some good quality buildings
in the area include U-Fone Tower,
Islamabad Stock Exchange and Serena
Business Complex.
Occupancy
According to our findings, the average
occupancy on Jinnah Avenue (Blue
Area) has risen from 68% to 92% in the
last two years. A contributing factor to
the surge in occupancy is the CDA’s
decision to outlaw residential houses
being used for office purposes.
Rent
Average rents in Islamabad range from
Rs. 160-200 per sqft for premium
space.
Price
Average sale price of offices range from
approximately Rs 18,000-22,000 per
sqft for premium space.
Future Development
Given the rapidly growing population and the
introduction of the China-Pakistan Economic Corridor,
the demand for office space is expected to rise with new
players entering the market.
At the moment, no major office developments are
planned. An upcoming mixed-use development in the
central business district is The Mall of Islamabad.
Major Cities 5 Year Rental Comparison (per sqft.)
Year Karachi Lahore Islamabad
2012 120 80 100
2013 140 100 120
2014 160 110 140
2015 180 120 150
2016 200-225 130-160 160-200
Chart: Colliers Research
Colliers Insight
Enforecement of by-laws in relation to non-conforming
use of residential houses have impacted sales and rental
prices for office space. Prices have increased due to a
shortage in supply.
Demand for office space will emanate mainly from
companies which have a high degree of interaction with
government departments. Such companies prefer to
locate in the capital city which is incentivized by the
Capital Development Authority in the form of provision of
subsidies and required infrastructure.
Moving forward, we foresee prices remaining subdued
due to the recent taxation announcements by the
Government of Pakistan, but rents will continue to rise
due to a high demand for quality office space.