Karachi's office hub shifts from I.I. Chundrigar to Clifton, Shahrah-e-Faisal

September 13, 2024 (MLN): Karachi’s office market is undergoing a transitional phase, with the city’s original office hub shifting from I.I. Chundrigar Road to Clifton and Shahrah-e-Faisal, according to a research report by the real estate company Savills.

This shift has been largely on account of road infrastructure, congestion, and parking availability on I.I. Chundrigar Road.

Financial institutions, MNCs and local corporates who gravitate to state-of-the-art demand Grade A buildings that have ample parking, security, fireproofing and high-end amenities.

According to Savills' office outlook for Karachi, high occupancy levels in Grade A buildings reveal a shortage of such properties currently available, which could present a potential opportunity.

Karachi’s office market is also witnessing the rise of co-working spaces, with local startups and corporates increasingly drawn to tier-1 flexible working spaces, which are showing high occupancy levels.

The report further stated that prominent players include Regus (an international brand), prominent local players (such as The Hive, Kickstart and COLABS), and several smaller providers.

Being Pakistan’s commercial hub, head offices of most MNCs, banks and large local corporates are based in Karachi, creating strong demand for well fitted out office space.

Fit-outs have recently seen a boom in Karachi where Grade A building have achieved full occupancy in 6 years.

Clients are mainly MNCs or large corporates engaging globally recognized and certified project management providers such as Savills.  

It is worth noting that Karachi’s Grade A and B residential market struggled in the last 12 months.

Both investors and owner-occupiers have slowed down activity on account of the rising construction costs (due to inflation) and furnishing costs (due to import taxes and restrictions impacting imported items).

Take up and occupancy for key investments have therefore curtailed with many waiting for economic sentiments to change before investing.

The city currently has 1,552 Grade B apartments whereas 2,404 Grade A and Grade B apartments are expected to be added in the next 5 years.

A 55% increase in supply shows that developers are confident that in the medium to long term, the uptake of apartments will increase as Pakistan’s economy becomes stable.

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