Dr. Toufiq M. Seraj is the Founder Managing Director of Sheltech (Pvt.) Ltd. and its associated companies. An engineer and urban planner by profession, Dr. Seraj obtained his Ph.D. in Civic Design from the University of Liverpool in the UK as a Commonwealth Scholar. Earlier he completed his Masters and Bachelor degree from BUET. He also held academic positions there.
Dr. Seraj has extensive professional experience in Real Estate Development, Construction, Management, and Planning Consultancy. He has a wide range of publications including several books on Town Planning, Housing, and Real Estate makes him one of the most prestigious personalities in this sector.
Besides Real Estate, Dr. Toufiq is also involved in other businesses which include Consultancy, Hospitality Industry, Construction of Industrial Buildings, Manufacturing of Concrete Products and Ceramic Tiles. He was also the former President of Bangladesh Institute of Planners (BIP) and the President of Real Estate & Housing Association of Bangladesh (REHAB) for three consecutive terms.
“Modern day living and urbanization are interrelated with vertical living. New trends and architectural development have also contributed to the adaptation of this style of living.”
Three decades ago the annual delivery of apartment was less than 100 units, which has now soared up to 10,000 units. It can be seen that this incredible achievement in the real estate of Bangladesh is mostly private sector driven. What is your observation on this?
The economic development in Bangladesh has had an enormous impact on the country’s real estate sector. This industry goes through a cycle in every country. Our neighboring country has reached the peak of this period 5 to 10 years ahead of us. For instance, Thailand was once a very congested city with enormous traffic on the roads, and Kolkata was no different either. However, from our independence till now Kolkata has survived many hurdles and attained a better position than before.
If we are to talk about Dhaka, the population density in this city has increased tremendously from 1972 till 2017. Such population pressure on a single city is rarely observed in this world. Back in the early 80s housing was a huge problem in Dhaka which led to the entrance of private sector in real estate, sometimes in the middle of this decade. During that era, only three to four operators namely Eastern Housing, Ispahani, BTI and Property Development reigned the market. Sheltech commenced its operations in 1988 and then came the Real Estate and Housing Association of Bangladesh (REHAB) in 1991. Initially, REHAB only consisted of 8 to 9 signatories amongst which I was one.
Today, the official figure of delivered apartments has gone above 10000, and the demand for it in Dhaka is approximately 50,000 units each year. Around 2000 companies are operating in the market. Of those, the first 100 companies, it can be noted that the first 20 companies in the industry deliver half of the total units of apartment sold each year with the remaining 80 firms providing the rest 50% of the apartments. Some non-institutional developers also exist in the scenario, but the delivery of the next 1900 companies is entirely negligible to that of the first 100 and has a figure of about 4 or 5 units in a year. However, the pace of delivery has slowed down to a great extent in the past two years due to the sluggish trend in the real estate sector and only businesses, operating for more than 15 years are doing well. Ethics and timely delivery are other factors that have contributed to their success and made the sector come a long way.
It is observed that a lot of compliance issues arise in this sector as it has a lengthy backward linkage. What can be done in regards to this?
Initially, every business faces a few limitations in the market in which it is operating. Compliance issues from the design or construction point of view in our country are mainly raised by the Bangladesh National Building Codes (BNBC). A lot of companies claim that they abide by those regulations, but no strict monitoring is done to ensure that. The regulatory bodies, in this case, must place an effort towards making the real estate industry more compliant and enforce businesses to increase efficiency and human resources. This may require a lot of work to be done within a rigid timeline.
Vertical living has become quite popular in our country recently. What is the motivating factor behind it and how exactly are you tapping into the potentials of this new trend?
I feel it is the scarcity of land that made vertical living come into existence. The soaring price in Dhaka city has limited the procurement of property only to the elite class of people unless someone from the lower or middle-income group inherited or was allotted one. It has become quite unimaginable to own a 0.09 to 0.15 acres (3 to 5 Kathas) of land in 2017, and this isn’t by choice. With the growing consciousness, Dhaka has now become a metropolitan city, and people here don’t have the time to manage property-related hassles. Modern day living and urbanization are interrelated with vertical living. New trends and architectural development have also contributed to the adaptation of this style of living.
Our research and development department has been working very hard. Besides, our projects are the creations of our fully-fledged design and technical team. Our highly competent team of professionals includes architects and planners who work incessantly to come up with new ideas. Amongst many of our other projects, we have successfully met the compliance standards in the Mirpur Mazar Road. Dhaka is continually going through a transformation and a lot more changes are about to happen.
We have a surplus of land surrounding the outskirts of Dhaka where Satellite Township is possible. Why aren’t we heading in that direction yet?
I believe we have miserably failed to show the required farsightedness back in 1972. Dhaka Metropolitan Area Integrated Urban Development Plan (DMAIUDP) published in 1981, but we failed to implement the proposal. After that, the plan titled Dhaka Metropolitan Development Plan (1995-2015) in three tiers like structure plan, urban area plan, and detailed area plan has some directives. However, considering the long time horizon in Bangladesh, many may have had doubts about the feasibility of implementing such programs. If we are to think of Satellite Township, it’s high time that we should move out of the political boundaries and work on implementation alongside planning. However, Purbachal might be a success story.
How is the support from banks and other financial institutions helping to boost the growth of this sector?
Previously, Delta BRAC Housing Finance Corporation (DBH) and other lending agencies had a lending interest rate of about 18%, which has now dropped down to a single digit. Moreover, in comparison to that of 2010, the price of an apartment has gone down by an impressive 20% in the year 2017. This is a lucrative opportunity for the clients, as it requires them to pay a lot less interest on the borrowed sum than they used to and enabled them to invest more in buying an apartment. Such support from banks and financial institutions can boost further development of Real Estate sector in the long run.
What is your take on urban planning?
There is a lack of city governance in Bangladesh. The utilities in major cities like London or New York are mostly governed by the City Council. In our case, the Local Government Rural Development (LGRD) ministry has no monitoring over the utility serving organizations. We are hopeful that the development of metro rail and other scopes in communication will add new dimensions to urban planning. However, it is equally important for us to practice the existing laws and implement the new changes that will be brought to the current Detailed Area Planning (DAP).
Where do you see the Real Estate sector of Bangladesh in the future?
We have progressed a lot since the past ten years. Many useful amendments have been brought in the laws and regulations lately. It isn’t only the price of land that has gone down, but our stakeholders have also been directed to the development and implementation of compliances. Monitoring of such measures along with media assertions for raising consciousness in this regard would do a great deal to develop the sector in the long run.