Bangladesh won't suffer from subprime crisis: RHEL chief
Monday, 26 November 2007
Ershad Khandker
"Bangladesh will not suffer from subprime crisis because the volume of housing loan in Bangladesh is very small," said Managing Director of Rupayan Housing Estate Limited (RHEL) Mr Selim Sadat told the FE in an interview.
Excerpts of the interview run as follows:
FE: Let's start from the beginning, tell us abut Rupayan Housing Estate (RHEL).
Sadat: Rupayan Housing Estate Ltd (RHEL), country's one of the leading real estate builders, is constructing a 32-building mega residential complex named, 'Rupayan Town' keeping in view the affluent as well as less-affluent buyers. A total of 855 apartments in the complex are nearing completion. The housing project of RHEL on 56 acres of land, adjacent to Fatullah Stadium in Narayanganj is expected to be ready for sale by early next year. The apartments will be reasonably priced. The floor space of each flat would be between 650 and 850 square feet (Sft). The housing project with its own power generator will have a mosque, a junior school, a market and other facilities including for medical treatment.
The RHEL, a sister concern of the Rupayan Group, would arrange credit to the buyers at reasonable interest rate from financial institutions.
Affiliated to the Real Estate and Housing Association of Bangladesh (REHAB), RHEL is constructing 30 more residential and office complexes in the capital city. The projects are coming up in the city's important commercial and residential hubs including Uttara, Bashundhara, Progoti Sharani, Niketon, Gulshan, Banani, Dhanmondi, Kakrail, Shantinagar, Maghbazar, Paltan and Narayanganj.
We are also planning to start construction of 15 residential and office complexes soon, at Uttara, Bashundhara, Progoti Sharani, Rampura, Gulshan, Dhanmondi, Lalmatia, Shyamoli and Narayanganj. Established in 1998, RHEL has constructed so far 1430 apartments, 302,460 sft of office space and 157 shops in important areas of the city.
FE : How is housing business performing now?
Sadat : There is a little downturn in the housing business that may be because the growth in the preceding period was a little artificial. We are expecting that in the changing situation real buyers will have the opportunity to enter the housing market.
The government should soon allocate at least Tk 30 billion as housing credit to help about 60 per cent of the capital city's residents to buy an apartment per family. The dual role of Rajdhani Unnayan Kartipakha (RAJUK) should come to an end. RAJUK should continue to function as a regulatory authority only and leave the role of a developer.
Accommodation is a constitutional right of the citizens. We would suggest the thinking of our government to acquire land and find a mechanism, in partnership with the real estate sector, to go for a massive low cost housing for the teeming masses. The government could also assign zones for exclusive residential and industrial locations. To get a planned city the government should specify the industrial and residential zones.
FE: A subprime crisis in the real estate sector has emerged due to a world wide chain reaction of the credit instrument market freezing-up and an apprehension of recession in the US. Bangladesh has not been effected, why?
Sadat : The subprime crisis, or the crisis on the second mortgage shows that in the west, the credit worthiness of the real estate borrowers can be put up as collateral for further borrowing. That is a risk prone situation resulting in what's happening how.
As the volume of housing loan is very small in Bangladesh, the credit instrument derivative or the debt instrument as a product is nonexistent. So there is no reason for Bangladesh to suffer from sub prime crisis.
"Bangladesh will not suffer from subprime crisis because the volume of housing loan in Bangladesh is very small," said Managing Director of Rupayan Housing Estate Limited (RHEL) Mr Selim Sadat told the FE in an interview.
Excerpts of the interview run as follows:
FE: Let's start from the beginning, tell us abut Rupayan Housing Estate (RHEL).
Sadat: Rupayan Housing Estate Ltd (RHEL), country's one of the leading real estate builders, is constructing a 32-building mega residential complex named, 'Rupayan Town' keeping in view the affluent as well as less-affluent buyers. A total of 855 apartments in the complex are nearing completion. The housing project of RHEL on 56 acres of land, adjacent to Fatullah Stadium in Narayanganj is expected to be ready for sale by early next year. The apartments will be reasonably priced. The floor space of each flat would be between 650 and 850 square feet (Sft). The housing project with its own power generator will have a mosque, a junior school, a market and other facilities including for medical treatment.
The RHEL, a sister concern of the Rupayan Group, would arrange credit to the buyers at reasonable interest rate from financial institutions.
Affiliated to the Real Estate and Housing Association of Bangladesh (REHAB), RHEL is constructing 30 more residential and office complexes in the capital city. The projects are coming up in the city's important commercial and residential hubs including Uttara, Bashundhara, Progoti Sharani, Niketon, Gulshan, Banani, Dhanmondi, Kakrail, Shantinagar, Maghbazar, Paltan and Narayanganj.
We are also planning to start construction of 15 residential and office complexes soon, at Uttara, Bashundhara, Progoti Sharani, Rampura, Gulshan, Dhanmondi, Lalmatia, Shyamoli and Narayanganj. Established in 1998, RHEL has constructed so far 1430 apartments, 302,460 sft of office space and 157 shops in important areas of the city.
FE : How is housing business performing now?
Sadat : There is a little downturn in the housing business that may be because the growth in the preceding period was a little artificial. We are expecting that in the changing situation real buyers will have the opportunity to enter the housing market.
The government should soon allocate at least Tk 30 billion as housing credit to help about 60 per cent of the capital city's residents to buy an apartment per family. The dual role of Rajdhani Unnayan Kartipakha (RAJUK) should come to an end. RAJUK should continue to function as a regulatory authority only and leave the role of a developer.
Accommodation is a constitutional right of the citizens. We would suggest the thinking of our government to acquire land and find a mechanism, in partnership with the real estate sector, to go for a massive low cost housing for the teeming masses. The government could also assign zones for exclusive residential and industrial locations. To get a planned city the government should specify the industrial and residential zones.
FE: A subprime crisis in the real estate sector has emerged due to a world wide chain reaction of the credit instrument market freezing-up and an apprehension of recession in the US. Bangladesh has not been effected, why?
Sadat : The subprime crisis, or the crisis on the second mortgage shows that in the west, the credit worthiness of the real estate borrowers can be put up as collateral for further borrowing. That is a risk prone situation resulting in what's happening how.
As the volume of housing loan is very small in Bangladesh, the credit instrument derivative or the debt instrument as a product is nonexistent. So there is no reason for Bangladesh to suffer from sub prime crisis.