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Retail spaces in hotel complexes are a popular choice for brands due to their location and ambience. In addition, they enjoy the benefit of a customer base made up of high net worth hotel guests, which include foreign dignitaries, delegates and tourists and even celebrities.

In Pakistan, until a decade ago such retail spaces were coveted by the most exclusive brands, but today due to the security situation, hotel occupancy rates (and thus customers) have declined, while tighter security measures have discouraged local visitors. However, despite the lower turnover, these spaces remain popular and most leading hotels in Pakistan maintain an occupancy rate that exceeds 70%. Tenants also find it a hassle-free arrangement because maintenance issues are usually the hotel management’s responsibility.

 Here is a detailed look: 

  • Hotel complexes have a limited number of shops, ranging between five and 30; they are usually not open for sale and can only be rented.
  • Shop sizes vary between 75 and 250 square feet.
  • Larger hotels have dedicated shopping arcades within the complex, thus the size of these shops can be customised according to the tenants’ requirements.
  • Rental contracts are usually valid for a period ranging between one and three years.
  • Average monthly rental rates range between Rs 100 and 250 per square foot. A six-month advance and a security deposit are required in most cases.
  • Most rental contracts include maintenance and security as part of the package, at no extra cost, while electricity bills are the tenant’s responsibility.
  • Apart from top-end brands, other businesses located within hotels include handicraft and souvenir stores, fine carpet and rug merchants, florists, patisseries, bookshops, jewellery designers, beauty salons, pharmacies and general stores.

– Uzma Nawaz

Information provided by several hotels in Pakistan.

First published on February 5, 2012 in the Real Estate Section of the DAWN National Advertiser.

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