New financing route to roll out soon for real estate

The real estate sector is likely to see a boost as another financing route is about to open following the recent approval of Real Estate Investment Trust Fund Rules 2024.
The stock market watchdog will finalise the rules on receiving feedbacks from relevant stakeholders to support real estate projects only.
"Current asset managers will not be able to issue the units [of financing products]. We will provide new asset management licences for those having skills to handle this kind of products," said Mohammed Rezaul Karim, spokesperson of the securities regulator.
As a developing nation, Bangladesh needs a huge investment for the development of the sector, but the way it is being financed is sketchy and inflexible.
Usually, real estate financing solutions have a lifetime of 20-30 years, whereas commercial banks collect money from savers for short terms. Maturity mismatch happens when they want to finance long-term projects.
Besides, bonds or shares offer a hedge against rising interest rates. The issuers will enjoy flexibility when it comes to repayment, while bank loans often become unbearable due to high interest, leading to defaults.
To solve this problem, the Bangladesh Securities and Exchange Commission had been planning for a few years to introduce new tools to finance real estate projects.
Finally, on Thursday it finalised the draft version of the rules.
"We will publish the rules on our website. Will publish in a Bengali daily and an English newspaper too. After getting feedback we will finalise the rules," said Mr Islam.