Interviewed By
Alawol Ahamed, Assistant Manager,
Consumer Asset, Consumer Division, IDLC Finance Ltd.

MBR: How are the real estate developers adjusting to the challenges of Covid-19 pandemic?
F.R. Khan: Just like all other industries real estate companies have also taken some initiatives to operate safely in this ongoing pandemic. When the government of Bangladesh imposed the nationwide first lockdown in 2020 all real estate companies including BTI drafted a detailed plan on how to operate safely. After two months of general holidays BTI started its operation on 01, June 2020. During the initial lockdown period BTI prepared an approximate of 6,000 sqft. office floor space to have inhouse meetings with internal and external stakeholders. In addition to that other necessary facilities like temperature check, sanitization of all visitors, etc were implemented. BTI also ensured that the social distancing is maintained by placing tables and chairs at safe distances. Natural ventilation systems were also ensured to reduce the spread of the virus through central air conditioning system. At the same time, like many other developer companies BTI started to arrange majority of its meetings and other interactions through online platforms like zoom and other similar applications. Till now almost all the internal meetings are being conducted through Zoom. 

Specific action plans have been drafted and executed for near future to complete, the ongoing and upcoming projects. Because of these coordinated efforts, BTI has been able to finish and hand over all the near to complete projects on time despite the limitations due to the pandemic and lockdown. Specific and coordinated efforts have also been undertaken for upcoming projects as well, to ensure that they are handed over to landowners and customers as per commitment.

Our construction sites are safer than our office space due to natural ventilation. To minimize the contraction rate of COVID19 at our construction
sites, we have ensured on-site meal and accommodation facilities for all laborers so that they don’t have to go out for anything.
This is how we have managed the situation and kept our promises to our valued customers. In addition to these we have also communicated and coordinated with financial institutions for any financial assistance that our customers may require in order to fulfill their dreams. Financial institutions have also supported us throughout the period.

MBR: Real estate market observed a surprising spike in demand during the pandemic. What are the factors that are driving this demand surge?
F.R. Khan: Apart from April & May 2020, sales for the rest of the period were better than expected. There are a few key factors that contributed to this surprising spike in demand during the pandemic. First of all, people were scared and wanted to ensure that their successors can have a permanent address of their own in the city. Some people also invested in real estate products since the world was shut and they were unable to transfer the money and invest in foreign countries. Moreover, the government’s decision on allowing untaxed money in real-estate
sector contributed to the spike as well. We expect that the demand will continue to be high for this year as well. On the other hand, in case of existing customers, payment will continue to suffer as income has been impacted due to pandemic.

MBR: What initiatives can the developer companies take to reduce the physical contact
when it comes to promoting their products to the prospective customers? Should they
arrange virtual tour?
F.R Khan: To reduce physical contact with customers’ real estate developers can take some initiatives. As mentioned earlier BTI and other developers have invested and developed virtual communication platforms. Now, most of the meetings with customers are done in Zoom. For unavoidable physical meetings with internal and external stakeholders, BTI has prepared an approximate of 6,000 sqft. office floor space. In addition, all solo property fares and other promotional activities are being organized online. Customers as well as other stakeholders including financiers are invited to join these online promotional activates. Responses from our customers and stakeholders are very encouraging and we will continue to arrange such activities online. A virtual tour of a project is a new concept in Bangladesh and few property developers are trying to invest in such platforms to attract customers. BTI will look into this and if feasible then will also invest to serve our valued customers better.

MBR: Real Estate Products are mostly being developed specifically targeting premium segment populations of the society and very few products are being developed targeting the low and mid income population. What initiatives can be taken by developers to serve this large group of people who are also willing to have their own dwelling?
F.R. Khan: Customers of real estate developers are generally categorized into two categories which are upper and classic class. Although most of the developers make their products targeting upperclass customers, we know that majority of the buyers of our society belong to the classic class segment. When the EMI of the loan is equal to or slightly higher than the rental expense then it is considered affordable. To accommodate the demand of the latter group we
have taken some initiatives to make it affordable. To understand how Singapore ensured housing for all, we are in touch with some Singaporean companies. They informed us that there was a certain standard of design that can be implemented to reduce the construction costs. We are trying to implement those practices to make it more affordable. BTI wants to leave a lasting legacy in the society as it is no longer a business concern rather it has become an institute. We believe, if we can provide an apartment within BDT 2.5 million, then we can leave a legacy. Apart from bank interest and design cost, there is a major cost involved in the process which is land cost. The land cost itself contributes to around 40% of the total construction cost. So
without reducing the land cost it will be impossible to reduce the apartment price, especially in city corporation areas. BTI approached the Government and requested them to provide land so that we can prepare affordable apartments and serve these large groups of people. Due to the ongoing pandemic, we were unable to produce any progress however we are maintaining close communication with the government. We believe this is the only way to reduce the cost of the apartment. In addition to this BTI started at least 3 gated projects on a large piece of land with all necessary amenities. Locations of these projects are in the outskirts of Dhaka where land price is not that high. Most of the apartments will be smaller than usual and target customers are young and small families as well as people who have retired recently. We were able to reduce the price of the apartment to BDT 2.7 million for an 850 – 900 Sqft. apartment. To encourage the buyers we have started social counseling through online platforms, where we try to explain that the small apartment does not necessarily mean that it will not be able to meet their required needs.
MBR: Operations of real estate developers are predominantly within Dhaka & Chattogram City Corporation areas, where the prices are very high due to high land prices. Should the developers go outside of Dhaka & Chattogram and offer products in other parts of the country?
F.R. Khan: As said earlier we need to go out of Dhaka & Chattogram if we want to lower the price of the apartment. However, we believe that the market outside these two locations is not mature enough as land is still available and independent house is still considered better than an apartment. We have constructed 3 projects at Cumilla and have left. We believe the same situation exists in other cities as well. However, we will surely go into other cities when we consider them mature, until then we will explore the outskirt areas of Dhaka.

MBR: What should the government do to encourage developers to develop products
outside Dhaka & Chattogram?
F.R. Khan: We believe decentralization is the key to elevate the pressure on our two main cities.
Government should take initiatives to increase facilities of other cities, relocate its institutions, and increase connectivity by implementing high-speed communication networks so that people can come to Dhaka for work and go back to their homes at end of the day. If the government can ensure all the facilities including good quality educational institutions, entertainment facilities, reliable and fast communication network, along with security then
people will not leave where they grew up.

Although the government is trying to encourage real estate developers to move out of Dhaka & Chattogram by giving them different types of incentives. Government should also develop the infrastructures so that developers can move freely and in a costefficient manner. Constructing just six lanes will not solve the problem, but they also need to ensure traffic management like Thailand and Malaysia. Although the government has reduced the registration cost recently still the cost is higher than other neighboring countries. Further reduction in registration costs will encourage more buyers to own apartments.
MBR: There is a trust gap between financiers and some developers as financiers often
complain that they don’t get any support from some developer companies in cases like timely registration, cooperation when a customer defaults, etc. What role can REHAB play to minimize such trust gap?
F.R Khan: REHAB has tried to improve the situation and minimize the trust gap under past and current leadership. I have been serving REHAB as an adviser, over the last 27 years also I don’t aspire to run as a president of REHAB. There are a lot of areas where REHAB can contribute to minimize the gap between developers and financiers. Moreover, REHAB has a long way to go if it wants to be a regulator that can bring positive changes in this important sector of our economy as this is the only organization through which developer companies can raise their voices. Moreover, it can guide and support newcomers so that they can grow and contribute to the sector. In fact, BTI has started mentoring through arranging training sessions for other developers so that they can be benefited from our expertise.
MBR: What are your expectations from Financial Institutions to help the industry
grow?
F.R. Khan: Financial institutions in our country do not offer any scheme like developed countries
do. Financial institutes should introduce various schemes like “rent and own scheme” which is very popular among apartment purchasers in the first-world countries like the UK. To make it affordable financial institutions in our country can just increase the loan tenure which eventually increases the overall payout. Longterm fixed interest home loan products could be brought for fixed income customers for better financial planning and affordability. Moreover, financiers are often comfortable in providing credit to individuals with high net worth. I am happy to know that IDLC has taken initiatives to finance low and mid-income population of our society. Hope more and more financers will be encouraged to penetrate into this large group of people of our society and follow the footsteps of IDLC Finance Ltd.
However I along with BTI and the entire sector is very happy that the financial institutions are trying to contribute in different ways from their end to develop the sector.
MBR: What policy does REHAB follow in case the companies are accused of false
commitment and fraudulent activities?
F.R. Khan: REHAB has an ample role to play which they are not doing due to different limitations. Over the fraudulent activity, REHAB has very limited authority. Activities like selling an apartment to multiple clients are fraudulent activity but REHAB has limited authority to punish those developers. There is a unit in REHAB called complaint resolution which does arbitration at a cost of BDT 3000. They call both parties and tries to mitigate the problem, however REHAB can’t enforce the judgment. Moreover , the resources at REHAB are not enough.
Litigation is another option for customers however the whole process can take a lot of time which is not only time-consuming but also costly. So the only way out is to counsel the general public so that they are aware and can make an informed decision. In fact, BTI has already set up a counseling booth from where anyone can book a session. BTI even allows people, who are willing, to buy from different companies.
MBR: What initiatives can be taken by the real estate developers to ensure sustainable practices and make the industry more environment friendly?
F.R. Khan: Sustainability is a very broad term. The literal meaning of Sustainable development is the development that meets the needs of the present without compromising the ability of future generations to meet their own needs. Basically, our concern in this aspect is how we can make real estate sector environment friendly that’s why we use the term “Green”. Around the
world, we see about 40% of the environmental pollution comes from the construction sector including road construction. But it is essential for development. So, the question is how we can expedite the development while keeping nature intact? In this regard, I am going to highlight the factors concerned with the real estate sector as others are neither my area of expertise nor do I deal with those.
So, if you look at the conscious countries like Japan or Singapore which are closer to Bangladesh we see they veiled the whole project during construction so that the construction activity does not hamper the life of the people who are not directly involved with the project. They can only see the end product once the construction is done. If those nations can do it we can too and we are continuously adopting those best practices. These practices can protect us from
noise pollution, dust, debris, etc.
Being the lead certified company BTI follows environmental protection criteria while implementing any projects. Currently, BTI strictly follows the following initiatives:

1. Enabling water harvesting process by utilizing rainwater capture in the building, which saves
underground water consumption.

2. On-grid solar installation alleviates the electricity bill automatically. Shading devices, like fins, are now being used as solar panels. Not only are the rooftops of the buildings being used for solar panel installation but also other areas like window sunshades.

Previously our focus was on putting the greenery inside the house but now it has been changed to put the house into the greenery. Renowned Architect Mr. Rafiq Azam is working on a project with us near 300 feet road, purbachal where the initial design has been done on the spot to ensure that the existing greenery remains intact in the design and adjust the construction area according to that.