Anwar Group is one of the top business conglomerates in Bangladesh. Its sister concern Anwar Landmark has been doing business with a reputation in the country's housing sector for two decades. Sharier Khan, the executive editor of The Business Standard and Senior Staff Correspondent Rezaul Karim met Hossain Khaled, the managing director of Anwar Landmark, to discuss the current situation of the Real Estate sector, current economic situation and the future.
Anwar Landmark has been doing business for two decades now. How many housing projects has your company completed during this time?
We stepped into our 21st year. In these 21 years, we have done more than 150 projects. Our projects were not limited to residential projects – we have also done a lot of infrastructure work, including the constructions of water plants, bridges, culverts, IT parks, etc. If I were to single out a landmark project, it would be the UNICEF headquarters in Dhaka.
When you first started the housing business, you did not have much experience and worked on a few projects. Compared to that time, how is your business now, when the economy is facing a downturn? Are you facing any setbacks in this situation?
Our construction journey started long ago. My father (late Anwar Hossain, founder and chairman of Anwar Group) had been involved in construction work since the sixties. He used to work as a contractor. He used to buy and sell houses since the Pakistan era. Every single company and factory of Anwar Group was built by him. So, construction has been part of our company for a long time.
When we formally launched Anwar Landmark, we took up three housing projects simultaneously. Since then, we take up to 25-30 projects a year depending on the size of the projects.
How about 2022? How many projects are in progress?
We have undertaken 22/25 projects in 2022 as well.
The market price of many construction materials, including rod and cement, has increased. Is there a negative impact because of that?
There is a global crisis now. As we are a part of the global village, the global impacts are felt in our country as well. Global supply chains have been hit hard since the onset of Covid. As a result, there is now a major shortfall in the market's supply chain. Nowadays, we are unable to open new LCs. The market price of almost all types of construction materials has increased by 20 to 35% and in some cases up to 50%. We are having to bear the added cost as the scope to transfer the cost to consumers is not yet there in the current market. This is actually a good thing for customers, as the sales price in the market is still stable.
Does that mean you could not increase the price of apartments?
I think we are all at the same level in terms of maintaining stability in the industry as a whole. The increase in price has been very little.
That means your sales were not affected that much and those who will buy apartments will still need somewhat the usual amount?
Absolutely. There are many people who buy an apartment with their whole life savings. It is the same for buying commercial space. Real estate investment has to be seen from several angles. Many people buy apartments for their own living while others want to rent out their property. If one is buying for themselves, he will see how much discount he can avail as he will get the apartment some four years after buying it with total cash. Another will try to get as good a deal as possible while purchasing during current inflation. The middle class, during inflation, think more about renting out properties than investing for their own living. During these times, the rental demand also increases. When rental demand increases, rental opportunities for investors also increase. So there are so many angles one looks at as a real estate investor,
So I understand that the negative impact on real estate has not been that much so far.
There has been a little slowdown, which is tolerable. More than 50% developers are not members of Rehab. The small companies may not be able to manage the economic shocks. Those who are the top ten developers of the country, they have sustained fairly during Covid and also in 2012 and 2007
When a company gets big, they obviously go for value addition. In the backdrop of your real estate business, what other ventures do you have?
Our businesses are quite diverse. We have been involved in the steel industry since the 1980s. Then we moved into cement production. We had a cable business before that followed by pipes. Since we have been involved in construction for a long time, the real estate sector is a natural progression for us. But we didn't stop there. Our furniture brand, Athena Furniture, came along. Anwar Landmark also provides facility management services to our projects. Then we also provide architect and interior designing services.
Do you have any financing facilities?
Anwar Group's products are a bit different. We always say that we want 'one stop service'. My biggest advantage here is that we try to offer the whole package. Be it your home loan or insurance – if you need them, they are provided in a package.
The government approved Rajuk's new Detailed Area Plan (DAP) and housing sector people are saying different things about it. Did the government not discuss with them or was it done properly?
Even if there were discussions with stakeholders about DAP, I think it was never done formally. For most of us, it was a surprise. Unless someone knew something about it behind the scenes. It was not only a surprise, it was a shock for us.
Why was this a shock?
First you need us to understand our land. I have always heard from my father that the most important resource of Bangladesh, which will run out, is not gas, but land. Identifying the arable, agricultural, non-agricultural and residential lands are crucial. As we are a small country, our land mass is also very less and as it is not properly defined. This resource will be exhausted first. We have been talking about this for a long time, the mapping of DAP with the land of Dhaka is very necessary. Anyway, it has started. Now the DAP rules came without including many of our suggestions like keeping the environment and population in mind. But much to our surprise, it says about the Dhanmondi area for example that buildings over 5 or 6 storeys cannot be built. The same has been said about midtown areas, including Segun Bagicha, Bailey Road and Moghbazar.
What about the high-rise buildings that are already there?
The ones that are there cannot be touched by Rajuk or anyone else. There is such a difference in the new buildings that will be built in some places, where we could previously build 13 storeys.
Say those places have become extremely populated and the number of buildings are already too much compared to the roads and the roads cannot handle the volume of vehicles – wouldn't such a DAP actually be effective?
Absolutely. If we talk about management and mismanagement, it is a big discussion altogether. In Dhaka, in Bangladesh for that matter, not that many cars are sold that we cannot manage properly. As Dhaka is the economic centre, a large number of people come here for employment. Why are the establishments which could have been moved from Dhaka not moved and still kept in Dhaka? There was no need to bring so many offices and headquarters to Dhaka. We are talking about decentralisation and then we are making the mistake of bringing everything to Dhaka. As long as Dhaka is not decentralised, unnecessarily blaming the real estate will do no good.
We are not blaming real estate, rather trying to understand the logic. Previously, when the DAP was attempted, the powerful developer lobby did not let that happen.
We want the DAP to happen, but a compromise has to be reached, an equilibrium has to be reached. If everything is done unilaterally – only keeping the environment in mind but disregarding housing and affordability, then it won't work. In the last three months, the government also lost revenue. We cannot do land registration as no land owner will give land to any developer amid this uncertainty. Now the developer, who was selling and costing the apartment by calculating 13 floors, has to do it for 5/6 floors. So the affordability space is shrinking.
The main problem with DAP is that it limits the establishments.
Absolutely. Not everywhere. It has been limited in the midtown while not in Gulshan. Baridharat has already gained. There was no damage done to the commercial areas. It is the middle class who live in midtown. We are making the rich richer without taking the middle class into account. The condominium projects we have are in order as per DAP rules. There is no complaint there. Our concern is the midtown areas.
So considering everything, what do you foresee?
In terms of the DAP, the government should see if the developers, including the pioneers, the Rehab members, and also the top-quality builders and the veterans, are involved in the dialogue. Unless such a discussion takes place, our issues and what they want will not be properly conveyed to each other. Since the prime minister herself is in charge of this particular ministry, we will not always have access to her. So if our views are to reach the prime minister, only those in charge can make it happen.
Do you see the year 2023-24 as a troublesome time for Bangladesh in the current global situation?
Economy is like a wheel. The wheel of business will sometimes go up and sometimes come down. Our economy has not yet reached a situation where the general public will panic about it.
What is the top Landmark project right now?
I have a very favourite project coming up. We have started a project in Gulshan Avenue and another in Banani. Besides, we have several upcoming housing projects. We are thinking of housing condominium projects near Dhaka or a little outside Dhaka, where we can provide accommodation for middle class people. We are planning the projects with comfortable commuting in mind.