Federal Government’s Rental Rate Increase Hits Commercial Properties Nationwide

December 19, 2024— In a significant move, the federal government has announced an increase in commercial rental rates for government offices leased in private buildings. This revision applies to various cities across Pakistan, impacting offices leased by federal institutions.

The Ministry of Housing and Works issued an official notification detailing the new rental rates, which will be effective immediately. According to the updated policy, the per-square-foot rental rate in Islamabad and Rawalpindi has been raised from Rs 80 to Rs 180. This hike marks a considerable jump in the cost of renting commercial space in these cities.

The revised rates are not limited to Islamabad and Rawalpindi alone. They will also apply to several other major urban centers across the country. In Lahore, the rate has been increased from Rs 60 to Rs 135 per square foot, while Karachi’s rental rate has risen from Rs 50 to Rs 113 per square foot. Peshawar and Quetta have also seen notable increases, with rental rates rising from Rs 35 to Rs 79 per square foot, and from Rs 30 to Rs 68 per square foot, respectively.

For smaller cities and towns outside the six primary urban centers, rental rates will now range from Rs 35 to Rs 79 per square foot, up from the previous Rs 35.

The new rental structure specifically targets cases where federal departments lease commercial properties from private landlords. Furthermore, the new policy allows ministries and divisions to increase their rental payments by up to 5% based on their individual requirements.

An additional provision has been made for centrally air-conditioned buildings. In these cases, the rental rates will see a 25% increase over the established limits, reflecting the additional costs associated with maintaining air conditioning in commercial spaces.

This policy revision is expected to have significant implications for the cost of leasing commercial properties for federal institutions across Pakistan, affecting both government budgets and private landlords.