Overview On Rupayan Real Estate

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Rupayan Real Estate

1.1 Introductory thoughts:

The real estate sector is one of the fastest growing and thrusting sectors in Bangladesh. Infrastructural development is highly important for a country to rise as a develop nation and to ensure housing facilities for the citizen of the country. But compared to that there have been a few studies which are far below the required number on the real estate sector and its accessibility to financing. Consequently, this sector requires an extensive study to find out the future potentiality, problems and solutions of the real estate sector and the availability of financing in this respect. This study may work as the basis of knowing the present scenario and for any future study.

1.2 Objectives of the Study:

The broad objective of the study is to identify the pattern, problems and potentials of Real estate sector of Bangladesh. The specific objectives of the study are summarized below:

· To assess the role and contribution of apartment business to meet the housing

· Needs in the Metropolitan city areas.

· To identify the demand pattern of apartment buildings in metropolitan areas

· To identify the pricing situation of the sector in the light of soaring construction

Materials price.

· To identify the pricing situation of the sector in the light of soaring construction Materials price.

· To identify the sources of funds of apartment business.

· To identify the factors motivating the buyers to buy apartment.

· To identify the sources of funds of the buyers for buying flats

· To identify the factors motivating the buyers to buy apartment.

· To identify the sources of funds of the buyers for buying flats

· To identify the socio-economic characteristics of apartment buyers. In short, the objective of the study is to find out the current condition, growth, market structure, financing condition and future prospects of the real estate sector in Bangladesh containing comparative scenario analysis with the global real estate market.

1.3 Scopes and Coverage of the Study:

In our country real estate is a growing and profitable sector in business arena. There are many dimensions of study of this industry. But the main focus of the study is to identify the problem and prospects of this sector in Bangladesh from the view point of developers (Real Estate Companies), apartment buyers (Consumers or ultimate beneficiaries) and the financial institution providing housing loans. So, the study tries to explore the problem and prospects of apartment business. The apartment companies are mostly concentrated in Dhaka City and to some extent in Chittagong city. But Dhaka city is the main center of apartment development, so the study is confined to apartment projects within the Dhaka City and suburb of Dhaka City.

1.4 Methodologies:

An explorative research has been conducted in preparing this paper. Pure basic research approach has been used. Theoretical and practical studies have also been incorporated. Multiple methods were used to collect data for identifying the pattern of apartment projects of Bangladesh and their problems: Review of relevant literature, survey, in-depth interviewing, informal interviews, and observation methods were some of them. Respondents of the study consist of apartment buyers and executives of the apartment companies, executives of the housing finance institutions.

Collection of Data: Data have been collected through face-to-face and telephone interview. Questionnaire has been used in gathering primary information from real estate participants. Information has been used from different secondary sources – Internet, Newspapers, annual reports, online and printed articles, journals and previous research papers on real estate sector and editorials & special housing supplement of news papers etc. Opinions have been collected from experts and participants in the real estate sector, which have been very useful in analyzing the data & information and to reach a conclusion.

The raw data also collected from Real Estate & Housing Association of Bangladesh (REHAB), Real Estate Yellow Pages (A Residential & Commercial Real Estate Directory), Annual Report of REHAB 2008, Ministry of Housing & Public Works, Rajdhani Unnoyon Kortipokkho (RAJUK), Imarot Nirmaan Bidhimala 2008, Daily Ittefaq (Weekly Report on Real Estate, Monday on every week), Weekly Bangladesh Shaptahik, Bangladesh Real Estate Law 2008

Graphical Presentation: The data were presented in Bart Chart (Fig-1), Line graph Fig. 1. This graph also described in statistically and possible cause and result.

Fig: 1 Yearly Number of flat hand over by the real estate company
2003
2004
2005
2006
2007
2008
Year
Growth of Real Estate Business

Observation & guideline preparation

Luxarious 30 30%
Luxary suprim 15 15%
Economic 35 35%
Seni economic 20 20%

Area Specialization of Real Estate sector: Classification of Real Estate Product

At the beginning, Sale of Real estate companies is low. Might be then, buyers were unaware of Real estate product

1 The flat sale of 2000-2007 show a positive skewness curve where the highest number

(Mode) of flat sale Tk. 40-55 lac. The flat sale of apartment deviate Tk. 21.61 lack

with the mean value of Tk. 53.61 lac

2 In establishment year 2000-2002, flat sold 28 % and In 2003-2004, it Was 72%.

3 Flat was sold in Dhaka (55%), Chittogong 25%, Sylhet 5%, others 15% flat was sold .

4 Banani Gulshan and Dhanmondi, Kulshi (Chittogong) are treated as most exclusive area.

5 The land Owners of Banani, Gulshan, Dhanmondi and Kulshi (Chittogong) zone are very much aware for developing their land

6 Buyers are feeling comfort to buy flats in Banani,Gulshan, Dhanmondi, & Kulshi (Chittogong) zones. Uttara is now becoming prime zone.

7 At the very beginning 15-25 lac prices flat were sold more but in the year 2004 number of flat sale of this range gone down.

8 40-55 lac prices flats became very much popular and buyers felt comfort to buy it. 55-70 lac prices flats are next popular to buyers.

· Tools Used: In analyzing the data and information gathered, a few Microsoft Excel

Tools were used such as mathematical functions, trend analysis etc. Moreover when

forecasting future scenario based on current situation, gathered data and information

have been assumed to have linear relationship and thus linear forecasting of different

facts has been incorporated.

· Interpretation & Substantiation: Numerical data have been analyzed and interpreted

with concentration and relation to the main issue. Data and information collected from

different sources were compared critically and found negligible mismatching.

theoretical analysis along with numerical evidence has been used to substantiate the

findings of the report.

Concept and development of real estate business

2.1 Concept of real estate business: History of Dhaka: Dhaka, formerly Dacca, is the capital and largest city of Bangladesh. It is located in the geographic center of the country in the great deltaic region of the Ganges and Brahmaputra rivers. Dhaka is served by the port of Narayanganj, located 16 km (10 mi) to the southeast. The city is within the monsoon climate zone, with an annual average temperature of 25 deg C (77 deg F) and monthly means varying between 18 deg C (64 deg F) in January and 29 deg C (84 deg F) in August. Nearly 80% of the annual average rainfall of 1,854 mm (73 in) occurs between May and September.

Dhaka was founded during the 10th century. It served as the Mogul capital of Bengal from 1608 to 1704 and was a trading center for British, French, and Dutch interests before coming under British rule in 1765. In 1905 it was again named the capital of Bengal, and in 1956 it became the capital of East Pakistan. The city suffered heavy damage during the Bangladesh war of independence (1971). The Romanized spelling of the Bengali name was changed from Dacca to Dhaka in 1982.

Map of Dhaka City

It is a recognized fact that the health of the Real Estate Development Sector is the barometer of the National economy. In Bangladesh Real Estate Business started in Dhaka in late seventies. During 1970s there were fewer than 5 companies engaged in this business. In 1988 there were 42, such Developers working in Dhaka and now in 2008 there are about 500 companies engaged in this business.

2.2 Starting of real estate business

In 1947, when India was partitioned, Dhaka became the seat of the provincial government of East Pakistan. The population increased from 0.28 million in 1951 to around 1.2 million in 1971. As the Capital of Bangladesh, which emerged as an independent country after the War of Liberation in 1971, Dhaka has now become one of the fastest growing cities in the world and its population is likely to exceed 10 million by this time. Although efforts have been made in the past to plan the growth of the City from a district town to one of the largest cities in the world, most have been unsuccessful. As a result, the living conditions have deteriorated very rapidly and the social as well as physical infrastructure are on the verge of collapse. Immediate actions are necessary to bring some discipline to the future growth of the city. Then start apartment concept (multi unit home) & trend to purchase this type of asset.

2.3 Growth of real estate business

Urbanization is an outcome of both population growth and rural-urban migration. As urbanization increases, more and more people are becoming city dwellers. Bangladesh is not any exception to that picture. The ever-increasing urban population is catering an increasing demand for shelter. The right of shelter is a fundamental right, which is ensured by both United Nation declaration and the constitution of Bangladesh. But it is every difficult on the part of the government of Bangladesh alone to ensure housing for all. Hare comes the need of private sector real estate development.

It is a recognized fact that the health of the real estate development sector is the barometer of the national economy. In Bangladesh real estate business started in Dhaka in late seventies. During 1970s there were fewer than 5 companies engaged in this Business. In 1988 there were 42 such developers working in Dhaka and now in 2008 there are about 500 companies engaged in this sector. So we discuss on the topic comparatively performance of this sector against the demands.

2.4 Present condition of real estate business

REHAB is the only trade organization of Real Estate Developers with a current membership of 365 Developers. All major institutionalized Developers are members of this organization.

REHAB is also the “A Class” member of the Federation of Bangladesh Chambers of Commerce and Industry (FBCCI). In the recent years REHAB has played a very significant role in nation building through Real Estate Development by its members.

Short Profile of Rupayan Housing Estate Limited:

3.1 Overview of Rupayan Housing Estate Limited:

Rupayan Housing Estate Limited has come into being in 1999 with a pledge to fulfill the housing need of this populous city of Dhaka. The first Residential Project named “Rupayan Easel Dream” comprising 108 Apartments in four eight storied building was successfully completed and handed over to the honourable clients with their entire satisfaction. Since then, the company continued its advancement in development works and expanded the projects in all prime locations like Uttara, Gulshan, Banani, Niketon, Eskaton, Paltan, Shantinagar, Moghbazar, Dhanmondi, Laxmibazar, Wari, Mohakhali etc. Both Residential and Commercial Projects were undertaken and completed successfully and handed over accordingly and the company is in force with numbers of ongoing projects.

The company is operating its business in its own high rise Corporate Office at Rupayan Centre, Mohakhali C/A, Dhaka. The prestigious commercial building like Faruque Rupayan Tower at Banani, Rupayan Golden Age at Gulshan Avenue and well decorated and magnificent residential building with panoramic views at Gulshan, Dhanmondi and other prime locations of the Dhaka City earned name and fame for the company.

Rupayan believes in the concept of extending housing facilities to the common people of the country keeping in view of their limited income. It is first ever in Bangladesh that Rupayan has undertaken a satellite township project for the low income group at Bhuighar, Narayangonj. Twenty-eight residential buildings along with a market are being completed over there.

There is a plan that tentative clients will be illegible to avail the apartment in this project after booking and availing Bank Loan facility and thereby the scope of making repayment of bank loan with the amount of House Rent is nearly possible. This opportunity will make the dream true of becoming the apartment owner in case of that category of clients. Rupayan has got housing project in nearby Savar region (Ashulia and Hemayetpur areas).

Rupayan Housing Estate Limited feels social responsibilities to serve the people with quality and commitment. With this end in view the company is working with a dynamic set of management personnel and skilled work force. We look forward to see a better future.

Rupayan Housing Estate Limited has come into being in 1999 with a pledge to fulfill the housing need of this populous city of Dhaka. The first Residential Project named “Rupayan Easel Dream” comprising 108 Apartments in four eight storied building was successfully completed and handed over to the honourable clients with their entire satisfaction. Since then, the company continued its advancement in development works and expanded the projects in all prime locations like Uttara, Gulshan, Banani, Niketon, Eskaton, Paltan, Shantinagar, Moghbazar, Dhanmondi, Laxmibazar, Wari, Mohakhali etc. Both Residential and Commercial Projects were undertaken and completed successfully and handed over accordingly and the company is in force with numbers of ongoing projects.

The company is operating its business in its own high rise Corporate Office at Rupayan Centre, Mohakhali C/A, Dhaka. The prestigious commercial building like Faruque Rupayan Tower at Banani, Rupayan Golden Age at Gulshan avenue and well decorated and magnificent residential building with panoramic views at Gulshan, Dhanmondi and other prime locations of the Dhaka City earned name and fame for the company.

Rupayan believes in the concept of extending housing facilities to the common people of the country keeping in view of their limited income. It is first ever in Bangladesh that Rupayan has undertaken a satellite township project for the low income group at Bhuighar, Narayangonj. Twenty-eight residential buildings along with a market are being completed over there.

3.2 Ongoing Projects of Rupayan Housing Estate Limited:

Rupayan Chowdhury Palace at Bashundhara

Rupayan Oak Vale at Uttara

Rupayan XANADU at Dhanmondi

Rupayan LAKE SIDE at Dhanmondi

Rupayan LAKE SPRING at Dhanmondi

Rupayan ANGEL at Shantinagar

Rupayan PRESTIGE at Niketon

Rupayan ACACIA at Dhanmondi

Rupayan NILUFAR at Bashundhara

Rupayan CROWN IMPERIAL at Dhanmondi

Rupayan CHANDRALEKHA at Bashundhara

Rupayan APYLLION at Uttara

Rupayan APYLLION at Uttara

3.3 Outgoing Projects Rupayan Housing Estate Limited:

Rupayan KARIM TOWER at Kakrail

Rupayan SHELFORD at Shemoli

Rupayan TAIYAB PLAZA at Narayangonj

Rupayan POINT at Lalmatia

Rupayan Trade Centre at Bangla Motor, Dhaka

3.4 Upcomming-Projects Rupayan Housing Estate Limited:

Rupayan BHABAN at Gulshan

Rupayan HUQUE CENTER at Badda

3.5 Rupayan’s latest project in Narayanganj

Rupayan Housing Estate, one of the leading realtors in Bangladesh, has come forward with such a housing project that will fulfil the dreams of the middle and lower-middle class people.

Rupayan’s latest project in Narayanganj, adjacent to Dhaka, is a catalyst to setting up an extended capital city downtown, after Uttara, which is now considered a part of the capital.

“Home! Sweet Home!” Not only a famous song, but it also describes the hopes and dreams of many who aspire to own a home.

Such aspirations are more reflected in the hearts of people who reside in rental homes, wishing to own a permanent address. But it is difficult for a member of the middle of lower-middle income group to purchase an abode, owing to high property prices and prolonged payback periods.

Uttara is the outcome of an initiative taken by the then government in 1974. The then government also planned that some five downtowns or suburbs will be set up surrounding Dhaka. However, such plans were not re-initiated by the successive governments.

“There is not even a hint of such a development in the present Dhaka Metropolitan Development Plan or Detailed Area Plan,” says Sadat Hossain Salim, managing director of Rupayan Housing Estate.

“Dhaka is no longer a liveable city. It is one of the most densely populated cities in the world, with around two crore people inhabitants at present,” he says. “People are restricted to this one city for work, residence, shopping needs and entertainment.”

“The civic facilities required for a human being to live in a society are limited in Dhaka,” he says.

If the city is not decentralised or several downtowns established in and around 50 kilometres of Dhaka, the view of the city will be unimaginable in the days to come, Salim says.

“We have set up the satellite town with these concepts in mind, where all housing and social facilities such as shopping malls, schools, mosques, hospitals, playgrounds and community centres are available,” he says. “My goal is to take Dhaka outside Dhaka.”

However, he says, the government will have to facilitate the private sector to invest outside Dhaka.

The project, ‘Rupayan Town’ at Bhuigar, off the Dhaka-Narayanganj link road, stretches over 19 bighas of land.Rupayan is now offering ready flats in different sizes ranging from a minimum of 660 square feet to a maximum of 1,120 square feet at Tk 2,990 a square feet. customer can avail the key to a flat with an initial down payment of just Tk 4.14 lakh. “We have designed the project for the middle and lower-middle class people, who mostly live in rented flats. They spend a substantial amount on monthly rent,” Salim says.”Following the down payment, buyers can pay the rest of the money through instalments. They can make the payments with the amount they previously spent on rent,” he says.”Besides, we have arrangements with some financiers that will provide loan to our customers,” he says. Delta Brac Housing, IDLC Finance, National Housing, Phoenix Finance, Bay Leasing, Southeast Bank and Pubali Bank are proving housing loans to prospective customers.

Although the real estate and housing sector witnessed a 35 percent drop in sales in the first three months of 2009 as a consequence of the global financial crunch, Rupayan is optimistic about its new township project.

It held a single company fair in the first week of this month to showcase the ready flats under the Tk 300 crore Rupayan Town, which comprises 28 eight-storied buildings with 784 flats in the first phase.

The Rupayan Town includes facilities like a full-time generator for electricity backup, and its own water supply and sewerage system.

Around 200 flats have been sold so far and many prospective customers are contemplating purchase. Although most buyers are based in Narayanganj, Rupayan is optimistic about selling flats to Dhaka-based customers. A good number of people from Motijheel and its adjacent Basabo and Mugda areas have booked some flats.

Rupayan Housing Estate Ltd, one of the leading realtors in the country, has completed its satellite town project in Dhaka’s suburb to offer 784 ready flats mainly targeting the middle-income group.

The Tk 200-crore mega project titled ‘Rupayan Town’ at Bhuigar off Dhaka-Narayanganj link road is evidence of housing sector’s trend towards spreading to the suburbs.

The company offers flats of four different sizes ranging from a minimum of 660 square feet to a highest of 1,120 sft with a Tk 4,14,000 booking fee, and fixes Tk 2,990 for each sft.

“Obviously it’s a risky venture — developing a housing project outside Dhaka. But we hope people who are spending a huge amount on monthly house rents will be interested in our project,” said Sadat Hossain Salim, managing director of Rupayan Housing Estate, yesterday at a press meet in the capital. He said Rupayan will also arrange loan facilities for the customers through some financial institutions. The company will organize a three-day fair today at Sonargaon Hotel to promote sales of the flats. Southeast Bank, Shahjalal Bank, Prime Bank, Jamuna Bank, Mercantile Bank and Phoenix Leasing were the top financiers of the project under which Rupayan constructed 784 flats in 28 separate buildings in a 19-bigha land. “Given the rising demand for housing, it’s not a big venture,” Salim said, adding that it may encourage others to invest outside Dhaka. Rupayan has already built more than 1,000 flats in different parts of Dhaka city and constructed some commercial buildings in the city.

Apartment Business in Bangladesh: A Supply Side

Analysis by: Rupayan Housing Estate LTD

4.1 Introductory thoughts

Real estate is used for a number of purpose viz. to provide shelter, comfort, convenience, and privacy, a place of work, recreational facilities and related services. In an estimate real estate represent more than 40% of the national wealth. Therefore, the manner in which the resources of this magnitude are used has an important effect on the well being of our people, the success or failure of business firms and the general prosperity of the country.

The term real estate or apartment as commodity used has two meanings –

1) It is a name given to the commodity “realty” which include not only land but also all human improvements placed on the land,

2) It is the name given to the business engaged in by those persons who conducts commercial transactions in real estate.

The basic component of reality as a commodity is land. It means not only the surface of the earth but also the property rights and interests that attach to ownership of reality, including subsurface minerals. Thus the real estate means acquirement of land and building which is called inherent right. The men who are the owner, user, maker, financier or marketer of the property have some rights to the property

4.2 History and Development of Apartment Companies in Bangladesh

In Bangladesh apartment business is a recent phenomenon, although such activities were initiated sometime in 1964. Ispahani group was the pioneer in this sector. But in early 1980s with the inception of Eastern Housing Ltd., the business started flourishing. Now this is a booming sector of the economy. From late 1980s it came under the purview of business field. As a fast growing city of Bangladesh, such business was initially concentrated in Dhaka; some activities on a limited scale started later on in Chittagong and Khulna. At present there are about 500 firms in real estate business in Dhaka City.

4.3 Emergence of Private Sector Participation in Urban Housing

The principal advantage that has accrued to the government due to the participation of private sector in urban housing is the apparent release of pressure, on its finance and administration.

People’s expectation about government’s role in meeting the urban housing needs has gradually diminished. This has happened because of two reasons. Firstly, the failure of the government to meet the increasing demand due to resources constraints and gross inefficiency, and secondly, because of the increasing role of the private formal sector in delivering housing, particularly to the middle income groups. People have become more aware that government intervention in the housing sector has favored the richer class more than the target group and increased inequality and social tension.

4.4 Apartment development process by the commercial developers

The process of the apartment development:

1 Initial search for land, prior to purchase or co-sharing with the landowner.

2 Acquisition, possession and registration of land.

3 Signing agreement with the landowner in case of co-sharing arrangement.

4 Obtaining relevant planning and building permissions.

5 Initial planning and designing of the apartment.

6 Overall financial management and programming.

7 Obtaining a loan, if necessary, for part of expenditure.

8 Ordering and purchasing of building materials.

9 Filling of land above normal flood levels

10 Provision and connection of basic infrastructure service

11 Actual construction of dwelling with or without assistance.

12 Transfer of title to buyers of flats/ Apartment

As each stage in the process the potential builders has to rely on his or his family’s knowledge and understanding of what needs to be done. There is no opportunity to obtain permissions that are required or how to navigate through the various bureaucracies. At each stage difficulties are placed in the way of the developer. All but the really determined and those with suitable funds survive the course

4.5 Factors Affecting Apartment Development

Throughout the study, some crucial factors have been identified which affect the apartment development in Bangladesh. These have been classified into nine heads and are discussed below:

1) Socio -economic characteristics of people; 2)Macro-economic factors;

2) Legal frameworks;

3) Competing housing institutions;

4) Fiscal policies;

5) Cost-benefit factors;

6) Financing opportunities;

7) Infrastructural facilities; and (8)Social facilities

Finance

a) NCBs

b) BHBFC

c) Private & Foreign Banks

d) Private Housing Finance Co.

–DBH, NHFI

e) Informal Loan

Competing housing

Institutions

a. Town Development b. Authority

c. RAJUK

d. RDA,CDA, KDA

HSD. Housing co- operatives

Socio Economic Factors

a) Population Growth

b) Mobility of people

c) Level of Income

d) Migration towards Cities

Infrastructure

a) Housing Land

b) Electricity

c) Gas

d) Water

e) Social facilities

Fiscal Policy

a. Tax

b. Vat

c. Registration cost of land transfer

Macro Economic Factors

a) Economic Growth rate

b) Rate of Inflation

c) Rate of Savings

d) Foreign Investment

Legal Framework

a) Companies Act- 1994

b) Partnership Act- 1932

c) State Acquisition & Tenancy Act – 1950

d) Transfer of Property Act – 1882

e) RAJUK Building Code – 1996

f) Premises Rent Control Act – 1991

Cost Benefit Factors

a) Cost of Land

b) Opportunity cost of Investment

c) Cost of Building Inputs

d) Profitability of the Co.

e) Rental Income for the buyer

Apartment Companies

Figure: Factors leading to the successful growth of Apartment Companies

Socio-Economic Characteristics of People:

The demand for housing is one of the major factors that led to the development of apartment projects. Socio-economic characteristics of people influence the demand for permanent houses. There are four major socio-economic characteristics of population that influence the demand for houses, mobility of people, population growth, income level of people, and the degree of migration towards cities.

Population growth is the major factor that necessitates increased number of residential houses. Bangladesh experienced high growth of population over the decades, which led to high demand for residential houses. Though the rate of population growth has slowed down, but the backlog in the creation of residential houses is still significant.

The growth of population in urban areas is affected not only by birth rate but also by the rate of migration from the rural and suburban areas and other towns. Migration towards major cities is increasing because they are the hub of business activities and offer employment opportunities. The rate of migration is acute in Dhaka City, as it is the capital city of Bangladesh. Most of the migrated people in major cities (especially in metropolitan cities) do not like to move to other places (especially to rural areas). Comparing the facilities in major cities, they try to settle there permanently, because culturally people in this country are less mobile.

4.6 Present position of Real Estate sector at a glance

Here we provide some facts about the present real-estate situation in Bangladesh to grasp the sector’s situation in a short time.

Real Estate sector: Some facts

Particulars Units/ Amounts
No of Apt. units Delivered by the Developer in last 20 year: 56,000 (App.)
No of Apt. units Delivered by the Developer per year (2004): 5500-6500 units
No of Plot units Delivered by the Developer per year: 4500-5500 units.
Approx. turnover per year: 1,250 Crore Taka

(Tk. 12.50 billion)

Contribution revenue to Government 100 Crore Taka

(Tk. 1.00 billion)

Source: Rehab Website- www.rehabhousing.com

Direct Employment:

Employment Type Number
a. Architects: 2000
b. Graduate Engineer: 4000
c. Diploma Engineer: 10000
d. Management Official: 20000
e. Direct Labor Skilled & unskilled: 1.5 million (15 Lacs )
f. Contribution to GDP: 12 -14 %

Source: Rehab Website- www.rehabhousing.com

Contribution to GDP:

Year FY 05 FY 06 FY 07 FY 08
Real Estate’s Contribution to GDP 8.6 8.5 8.3 8.1
Real Estate’s GDP Growth 3.4 3.5 3.6 3.6

Source: Bangladesh Bank Annual Report, 2008

0
1
2
3
4
5
6
7
8
9
% Contribution
FY 05
FY 06
FY 07
FY 08
Year
Contribution to GDP
Real Estate’s Contribution to GDP
Real Estate’s GDP Growth

4.7 Supply analysis

Certainly the supply of apartments in the residential sector is increasing everyday with high pace. REHAB at the time of its inception had only 11 members who were developers & builders. In 1992 the number grew to 42. In 2008 it was 200 and now about 250. High demand growth has attracted more people to come to the supply market. Therefore supply also increased at a good rate though it is far below the demand level. In the last 20 years apartments supplied by REHAB members shows a steady growth in supply in the graph.

Currently REHAB members are supplying 5000-6000 units of apartments and 4000-5000 units of plots on an average per year against huge demand of housing. In the last 20 years REHAB members have supplied 56000 apartments approximately which is much less than the demand in the market. The large unsatisfied demand is partially satisfied by real estate developers who are not the members of REHAB.

As REHAB could supply only 6000 against demand of 5000- 60000 which is approximately 10% of the demand. Thus 90% the biggest portion of the demand is supplied by independent developers and the consumers by themselves. That’s why it is expected that there is a vast opportunity to sell apartments & plots in market. This will make out more profit for the developers and builders. A trend analysis of future expected supply of apartment units in Dhaka has been shown in above graph. It presents an attractively growing scenario for the market players. REHAB is expecting to supply 20000 to 25000 additional units of apartment from the next year if all environments are favorable.

Housing facilities by RAJUK:

Rajdhani Unnayan Kartripakkha (RAJUK) is the statutory body for the planning and development of various projects in the Dhaka city. Some completed, ongoing and future projects taken for housing rehabilitation have been stated in the following:

Completed Housing Projects of RAJUK:

  • Gulshan Residential Model Town
  • Banani Residential Model Town
  • Baridhara Residential Model Town
  • Uttara Residential Model Town (1st and 2nd phase)
  • Nikunja Residential Area (South)

Ongoing Housing Projects of RAJUK:

· Uttara Residential Model Town (3rd phase)

· Purbachal New Town at Yousufgonj and Rupgonj

· Jhilmil Residential Project

· Nam Village/Villa Apartments at Banani and Gulshan

Future Projects of RAJUK:

· Rimjhim Housing Projects at DND Areas

· Dhamsona Residential Area at Savar

· Integrated Township Project in the Eastern Fringe (East Baridhara)

· Housing for Shelterless at Khas Land

· Ashulia Recreational Centre

· Golf Course Development Project at Purbachal New Town

· Islamic Centre at Tongi Biswa Ijtema

· Permanent Display Hall at different suitable location

· Planning and Research Institute Project for urban development

· Construction of Health Complex at different places

· Construction of Grave Yard and Cemetery for various communities

· Multistoried building at Tikatuli, Moghbazar, Mohakhali etc.

· Multistoried Apartments at Jhilmil, Uttara RMT, Purbachal etc.

Though DCC and RAJUK have their own projects for the development of the city dwellers’ housing problem it was not far enough for fulfilling the demand supply gap. So the private sector has to come up with the housing scheme.

Private Housing Schemes: As we have noted earlier that Real Estate Housing Association of Bangladesh or REHAB is the association of all real estate companies operating in Dhaka which have more than two hundred members. Though REHAB has no regulatory power to see the side of the consumer it tries to provide proper housing through various scheme or project taken by individual company. Most of the companies build up their projects whole over the city.

4.8 A Short List of Prominent Developers working in Real Estate Sector are:

Name of developers Year of Establishment Total Apartment / Flat Total Plot Total No. of Commercial Space
Ready Ongoing Coming Completed Ready Ongoing Coming Completed Ready Ongoing Coming Completed
ABC Real Estate 1988 7 4 5
Advanced Development

Technologies Ltd.

14 15
Amin Mohammad Found.ltd. 1993 1 29 67 2 5
ANZ Properties Ltd. 10 1 20
Assurance Development Ltd. 15 30
Bashati Consortium Ltd. 6 10 3 10
Borak Real Estate (Pvt.) Ltd. 1991 4 1 31 1
Building Technologies &

Ideas ltd

1984 26 11 21
Concord Real Estate Ltd 1999 50 5 110 6
DOM-INNO Builders 2002 20 10 30
East West Property

Development (Pvt.) Ltd.

11 5 5 2
Ena properties ltd. 1989 8 5 10
Hamid Real Estate

Construction Ltd.

1990 4 2 8
Ideal Home Builders Ltd. 1998 4 3 3 6
Japan Garden City 1 4
Keari Limited 4 2 3 2
Mega Builders 3 20 1 1
N. M. Housing Ltd. 2 1 2 1 1 1
Nagar Homes 3 7 1 28
Navana Real Estate 67 1 15
Rangs Properties 4 10 1 1 3 1
Sheltech Private Ltd 1988 11 2 1 1 1 1
Sky View Foundation Ltd 1998 2 6 8
Shinepukur Holdings Ltd. 4 3 3 1 3
Suvastu Development Ltd 1998 13 9 10 2
Rupayan Real Estate Ltd. 1993 27 6
Russell Lodge Holding Ltd. 3 6 4 2 1
Sagufta City Developers Ltd. 1994 1 1 1
The Structural Engineers Ltd. 1983 4 13 3 6 2
Tropical Homes Ltd. 1996 8 3 9

Source: Field Survey

4.9 Marketing Mix:

Product

The main products in the real estate sector in Bangladesh include 3 types – Commercial Units, Residential Units and a mix of the two.

Commercial units are shopping malls, shops, and office buildings etc, which are used for commercial purpose.

Residential units include two segments – plots units and apartment units. Plots are segment of a land area with certain boundary where the land is developed by the real estate developers and builders. Apartments are buildings with flats of different sizes to live.

Mixed units include buildings which are used both for living and commercial purpose. Generally the downside floors of a project are rented for commercial purpose leaving the upside to sell as apartment. In the recent period the real estate developers have introduced new diversified products.

Model towns, which are built with the structure of a small town including all facilities for people, like offices, shopping mall houses, schools, swimming pools, gymnasium, banks, power plant etc. represent the diversified products. Projects that include some important swimming pool, gymnasium, shopping malls etc. in one building are also diversified products supplied by the real estate agents in Bangladesh. All these products wrapped with diversification have great demand in the market price

There is no common strategy for pricing in the market. Pricing strategy depends upon the cost of land developments, market condition, location etc. Developers and builders charge price based on their individual choice. But there has been a standard of pricing practice in the market depending on the size & location of the residential or commercial projects.

The price is rising rapidly in response to the shortage of land and increase in building material price.

A picture of the prices of apartments in different locations of Dhaka city is shown below:

Area Price ( Tk. Per squire feet)
Eskaton 4000-4500
Baily Road 4500-5000
Shiddeshory 4500-5000
Paltan 4000-4500
Shegunbagicha 4000-4500
Moghbazar (Front) 4000-4500
Moghbazar (Back) 3500-4000
Shymoli 4000-4500
Mohammadpur (Front) 4500-5000
Mohammadpur (Back) 3500-4000
Lalmatia 4000-4500
Kalabagan 3500-4000
Green Road 3500-4000
Jhigatola 3500-4000
Azimpur 3500-4000
Mirpur 4000-4500
wary 4000-4500
Monipuripara 3500-4000
Khilgoan 4000-5000
Razarbag 3500-4000
Gendaria 3500-4000
Uttara (Old) 5500-6000
Uttara (New) 5500-6000