Shabbir Hossain Khan, CEO of Doreen Developments Ltd. elaborates on the resilience and resurgence of the real estate sector post-pandemic, the evolving expectations of today’s real estate consumers, and the strategy that sets Doreen apart in the market.
The real estate sector was one of the first sectors in Bangladesh to turn around from the pandemic slump and has been growing remarkably since 2020. What is the secret behind the sector’s incredible resilience?
COVID-19 has affected everyone. What we initially thought would be a few weeks of limited activity, turned out to be a devastating pandemic that impacted all businesses. But the real estate industry was probably hit the hardest.
The real estate industry is labour-intensive and the workers are usually required to stay on-site. But, during the pandemic, it was required that all sites under construction be evacuated except for security personnel. This meant construction was halted resulting in significant delays. Consequently, consumers held back on payments, meaning most revenue streams were closed. But the real estate industry responded with resilience.
First, major real estate companies, like Doreen, made sure to continue construction at whatever capacity possible, regardless of whether customers were paying or not – even if it meant paying out of our own pockets. Initially, customers were unsure about whether they should close the deal on flats or not. But our continued efforts reaffirmed that our promise of delivering quality apartments would not be compromised. As a result, the customers resumed payments, regenerating our revenue streams.
Second, the government has played a very important part in supporting our resilience. The government fixed lending rates at 9% and FDR at below 6%. This meant that the middle-class and upper-middle class, who usually kept idle money in banks, savings certificates and capital markets, realised the importance of investing in the real estate sector. Buyer psychology was very important in this regard. People with the intention to invest in real estate, particularly abroad, were now more motivated to invest in real estate at home. For instance, if you buy an apartment at BDT 7000 per sq. ft. in Mirpur today, you will be able to sell it for at least an additional BDT 1,500 per sq. ft. once completed. Compared to other investment opportunities, the real estate sector presented the safest option. The share market might collapse, and with an inflation rate of around 8%, FDRs at 5% interest pose the risk of a loss in the long run. These risks are therefore mitigated if you instead invest in real estate.
Speaking of growth, an increasing number of people are leaning towards premium living spaces. What might be influencing the rise in demand for luxury apartments despite the recent stress on the economy?
This is a very important question. I have been in this industry for almost 29 years and have seen the changing requirements of buyers. People no longer want to live in buildings that only serve residential purposes. The demand for facilities and amenities has increased as today’s buyers are able to recognise the value of convenience. If residential buildings are equipped with swimming pools, gymnasiums, banquet rooms and prayer rooms, it saves the buyer the hassle of committing to being stuck in traffic for extended hours. These residential buildings therefore directly improve the standard of living.
Another observation is that the current generation of buyers tends to be more outgoing. This is especially observed during holidays when people travel to destinations such as Bangkok and Langkawi and experience the real estate facilities over there. The expectation of real estate amenities therefore increases. Even among middle-income buyers, it is not uncommon to hear queries regarding swimming pools and gymnasium facilities.
Finally, the definition of luxury has somewhat changed. Earlier, the location of the real estate had a substantial part to play in determining its value. For example, Gulshan, Banani, Baridhara, and Dhanmondi were considered luxury residential areas. But now, luxury is the building itself, and it can be in any location.
We are the only company that uses four different types of architects for our development projects. Each project has a principal architect, a landscape architect, an architect for lighting, and an architect for designing the lobby and other common areas.
On the topic of luxury apartments, Doreen Developments Ltd. appears to have created a significant following among its niche client base. What sets the company apart in a market full of competent competitors?
Doreen Developments Ltd. has a different approach to the industry that sets itself apart. First of all, we are very selective about the number of projects we undertake. While it is not uncommon for many real estate developers to undertake fifty to sixty projects to hand over as many apartments as possible, our focus is on ensuring quality project management. We will have about twelve to fifteen projects a year, and each and every one of them gets the utmost attention of craftsmanship.
We have two segments – Platinum and Gold. Projects in Gulshan, Baridhara, Dhanmondi and Banani are our Platinum projects, and the rest of the projects in the capital fall under the Gold segment. But that is not to say our Gold projects lack amenities. We have created a niche segment by recognising that customers in all segments expect and deserve luxury amenities. Some real estate developers minimise and compromise on the quality based on location, but we believe that all our products need to have the same specifications.
Another niche approach we have taken, particularly in the Platinum segment, is that we are the only company that uses four different types of architects for our development projects. Each project has a principal architect, a landscape architect, an architect for lighting, and an architect for designing the lobby and other common areas. This allows us to tell an architectural story by ensuring each one of these aspects is addressed with the utmost dedication.
What are some of the projects of Doreen Developments Ltd. we should look forward to?
In Baridhara, we have three upcoming projects, each with its own dimensions. One has contemporary architecture, the second one has post-modern architecture, and the third one is a mix of post-modern and classical. Local eminent architect Mohammad Foyez Ullah is the principal architect of one of the projects in Baridhara. Another upcoming project is Doreen Saadi Residences on Road 35/41 in Gulshan 2. This project, once completed, will be managed by InterContinental Hotels Group (IHG), meaning it has a very high-value proposition. It will be a purely serviced condominium.
Another project is being done by Architect Mostofa Khalid Polash. The project is on 47 Katha land. The first four floors will be for retail stores, followed by a food court on the 5th floor. The rest of the floors will be all residential units. In Amin Bazar, Gabtoli, we are developing a project on 40 Katha land, which will also be a multi-purpose building. This will be particularly attractive to young couples because it is in a highly accessible location. The project is near an 8-lane wide road, which means locations like Dhanmondi are only 15 minutes away. With other megaprojects like the Metro Rail nearing completion, this project has great potential. Of course, Doreen has several other ongoing projects, which we will be announcing in the near future.
Photographs: Najmul Haque Sagor