April 2017
Is Real-Estate data transparency the next big disruptor?
LIFE IS BETTER WITH ACME
06
INTERVIEW WITH
MAJ. GEN SYED FATEMY AHMED ROOMY
From 3 decades in the army to the real-estate sector, we have a conversation with Maj. Gen. Syed Ahmed Roomy about his company ACME Technologies, the importance of technology in this industry, and the current state of the real-estate sector.
10
SNEAK PREVIEW LAMUDI WHITE PAPER 2017
Bangladesh now stands in 44th place amongst the world’s economies and with 2017 now in full swing, we take a glance
16
RADICAL FUTURE OF ARCHITECTURE
back at Bangladesh’s market performance during 2016 in order
Architecture is a shapeshifter; reacting to the rapidly
to compare its progress with the past and attempt to predict
changing needs and preferences of the society in which it
trends for its future.
operates. The discipline which has brought masterpieces of functional efficiency to every city from Mexico to Jakarta is a global phenom.
18
EVOLUTION OF DHAKA
The architectures of a country are the collective reflections of its past, its cultural influences as well as its present setting. They tell tales of its civilization’s journeythrough time, keeping some of the mementos from the past as it looks on towards the future.
22
5 KILLER REAL ESTATE INVESTMENT MISTAKES Global investors face a time of much uncertainty. Read up on 5 errors not to make when investing in Real-Estate in these unstable times.
24
REAL ESTATE STARTUPS TO WATCH IN 2017
Today’s property seekers have so many more options than they ever had before. Property portals like Lamudi.com.bd are everywhere and
26
there is a lot of variety out there. Here’s a heads-up for 2017 and beyond.
10 MOST ECO-FRIENDLY CITIES IN THE WORLD
Lamudi’s top 10 eco-friendly cities, in need of some fresh air? Most probably these are the city trips to take.
30
IS REAL ESTATE DATA TRANSPARENCY THE NEXT BIG DISRUPTOR?
Buying property is usually the single biggest purchase a person will make over the course of their life. The process of searching for a new home is arduous and any prospective buyer will consume vast
Ba
quantities of information before tenuously making their final decision. How does data fit in this decision?
32
DID YOU KNOW?
Struggling to sell your home? There might be a few things you haven’t thought about. Everybody knows about fresh paint, a freshly mowed lawn and baked bread, but what else should we know? Turn to page 32.
in
n mo gla So st des ut h h- Pol 2n Ea lu d st te D As ia
36
BANGLADESH 2ND MOST POLLUTED CITY IN SOUTH-EAST ASIA Dhaka is the #2 of most polluted cities in South-East Asia. What does this mean and what can we do about it?
38
TIPS & TRICKS INVESTORS NEED TO KNOIW BEFORE INVESTING IN REAL ESTATE Why should entrepreneurs invest in the first place? The answer is: to have enough money to live off of when they no longer can or wish to work. The other ones? Go ahead and read on page 38.
s renuer Entrep know o need t ting e inves befor state l in rea
5 Welcome to Property Now: Evolution. We are very proud to present the 5th edition of the leading real estate Magazine of Bangladesh. The title of this quarter’s magazine suits this beautiful country more than anything, because it sums up why it has stolen my heart; change, progress and growth. I am typing this foreword from Berlin, the place where it all began for Lamudi. The heads of the 34 global offices have all gathered here to share their experiences and to think about the company’s future. It is exciting to be part of such a journey, invigorating to see the successes overseas and inspiring to hear the stories of growth. I am happy bringing all this with me back to Dhaka, and I’m excited to start putting some new ideas into practice. As we have just rounded off our annual market research, the timing could not be better to present a sneak preview of Bangladesh’s journey from a real-estate perspective. It’s been a rocky couple of years for the industry. However, we can take heart from the current economic conditions. Bangladesh is among the fastest growing countries in the world. Each year, an estimated 2mln people join the middle classes, creating a new source of demand for high-quality urban real estate. This increase in domestic demand is one of the drivers that brought the number of unsold houses down between ’15 to ’16, and hopefully even more this upcoming year. On a final note, also personal evolution has taken place in the last couple of months; taking my first steps down the Bengali language I am very enthusiastic about learning more. Settling in, witnessing the changing seasons, the celebration of International Mother Language Day and a proudly celebrated Bengali New Year. With that in mind I am very excited about the upcoming Ramadan and wishing you a very prosperous Eid Ul Fitr.
Anne Maria Hermans
06 / Lamudi Magazine Maj Gen Syed Fatemy Ahmed Roomy, psc, retd, Managing Director, ACME Technologies LTD. has served in the military for three decades, joining the armed forces at the age of 17. After retirement he set out to establish his own business venture. Maj Gen Fatemy Roomy admits it wasn’t an easy task by any means and there were many challenges that befell him. "But I took the challenges head on" said Mr. Fatemy as he loves helping and connecting with people. This phase of his life has been and still is 'one of the best', stated Mr Fatemy. ACME Technologies Ltd. is an ISO certified real estate development and construction company, operating from Mirpur DOHS and a committed member of the Real Estate and Housing Association of Bangladesh (REHAB). They have strict policies to comply
Maj. Gen. Syed Fatemy Ahmed Roomy, P.S.C, Rtd. Managing Director Acme Technologies Limited
with the rules and regulations imposed by
are compensated justly, on time and yearly
the government and are also quite sensitive
increment is made on the basis of individual
to the environmental and neighbourhood
performance. ACME shares its profits with
obligations.
its employees and allemployees are given 4
Why choose ACME Technologies Ltd?
bonuses a year including the festival bonuses.
The reason for choosing ACME can be
with a proud smile on his face. They also have
expressed in one key word: Commitment.
internship facilities and usually recruit their
Sincerely caring about it’s clients, ACME
interns from universities like BUP, MIST and
Technologies Ltd. promises to deliver to their
BRAC University.
respective clients on time and honour their
Activities and Technology
agreements, a crucial feature for any successful company. Their flats sell at a moderately higher price than other competitors because of better architectural plan and workmanship. ACME even gets some clients from overseas, like Middle East, Europe, North America and Australia. “Punctuality is our strongest suit” said Mr. Fatemy. ACME Technologies Ltd. also maintains strong work ethics in their organisation. The workers
“They love working here” says Mr. Fatemy
ACME Technologies Ltd. is active in the social media scene, having their own pages on Facebook, Twitter, Instagram, Google Plus and Linkedin. They also undertake Bulk SMS marketing, which after being scrutinised sent out to prospective clients. Any one can reach them at www.acmetechltd.com, a nice and up to date dynamic website. They engage in various CSR (Corporate Social Responsibility)
07 / Lamudi Magazine
activities and donate adequately for social
Bangladesh Real Estate on a scale of 10, Mr.
improvements, provides charity funds and
Fatemy replied by saying that it would be
sponsor other activities.
unfair to rate the years on a scale. I believe that
ACME makes use of multiple softwares and Apps to enhance their business performance and every employee is required to make use of the necessary Apps. They currently use Trello, a project management App, and Base, a CRM (customer relation management) App, which
the years 2014-2016 were eye openers for the from these past years.eal Estate Industry. It was all about surviving against the tide. A majority of the developers were unable to cope. The ones with Smart-Skill better survived. We deďŹ nitely learned a lot
Resource Planning) software for their accounts,
What challenges does the sector face and how can these be overcome?
budget, inventory and payroll management.
Political Instability: Overcoming this challenge is
They plan to incorporate 'Sage Business
a challenge on its own. Only better politics by
Solution' software (an ERP) to enhance
the political stakeholders can ensure political
business performances in the near future.
stability. It is hard to say if much will change
The Managing Director believes that without
over the next years. Companies must maintain
connecting to the virtual world and by
contingencies and move accordingly', he says.
help with the collaboration of their employees and clients. They use Tally9, an ERP (enterprise
extension with a bigger part of the world, their business may not be able to survive in the long run.Mr Fatemy, an avid fan of Mr Joseph Nye, a Harvard teacher and a political scientist insists on the notion that it is all about the balance between Soft-Skill (Soft-Power) and Hard-Skill (Hard-Power), which in turn manifests
Education & Skill: Knowledge is power, and it seems to be lacking in various circumstances. Polytechnic Institutes providing diploma certiďŹ cate are unable to provide quality education. Even students with engineering degrees from some of the universities seem to
Smart-Skill (Smart-Power) that will give
be much below the standard. This has become
competitive edge over others in future. When
a serious challenge to the entire industry across Â
asked to rate the past two years in regards to
its length and breadth. Government must
08 / Lamudi Magazine
small country like Bangladesh, where the only
How do you think 2017 will go and what are you most optimist about?
way left to grow is vertical.
“I have mixed feelings about the next year. The
focus on quality education at these institutes. Accommodating the growing population in a
This requires expert planning and proper subsurface infrastructure which most of our cities don't have. In many cases, the existing
general feel is that the Real Estate sector is picking up. But, the way I see it, yes, the sector's downturn has stopped, it took-off a little but flying level. It is difficult to say whether it will
structures are not sufficient to accommodate
gain altitude or stall. With the National Election
larger residential buildings, and the developers
coming up it is hard to tell what this year or the
have to come up with temporary solutions.
next shall deliver us. However, I believe that
What initiatives should the government introduce to stimulate the sector?
the companies who maintain quality, keep commitments and integrate technologies with their business process shall do well in the coming days".
The government can introduce a system that
ACME looks forward to become one of the top
circulates wealth more evenly. Our Economy is
10 Real Estate Developer by 2021. They
performing well, but the gap between the rich
targeted 2021 as they shall be a decade old by
and poor is becoming greater. To stimulate any
then and it shall be the 50th year of our
sector, it is important to distribute opportunity
independence. The plan is to maintain quality
and wealth equally to minimise the gaps. “It is imperative that the government educates every citizen on the importance of sustainable development.”
and commitment to make 'Life better with ACME'. The product will speak for itself and everyone will know 'why ACME is like no other in the industry'.
10 / Lamudi Magazine
Sneak Preview: Lamudi White Paper 2017 Bangladesh now stands in 44th place amongst the
figures of 11.09% and 6.25% growth respectively;
world’s economies, having faced isolated
the main reasons for this expansion are, as a
skepticism from some economists, on the basis of
financial analyst has indicated: growing wages in
purchasing power parity (PPP). With 2017 now in
the service sector (notably in public
full swing, we take a glance back at Bangladesh’s
administration, education, and health) and
market performance during 2016 in order to
development in large scale manufacturing,
compare its progress with the past and attempt to
construction, and transport. This news, coupled
predict trends for its future. [1]
with the World Bank report suggests that in the
Bangladesh is the 2nd fastest growing economy in
fiscal year 2015-16, real estate played a key role.
South Asia of 2016, a leap of three places from
As REHAB have stated, the 22,000 unsold flats in
2015. The Bangladesh Bureau of Statistics (BBS)
2014 have diminished to 8,000; a result of
announced on the 25th October that the economy
property price corrections and lower interest rates
had grown by more than 7% during the last fiscal
on home loans.
year, with GDP growth of 7.11%. This is an
Economists suggest that entrepreneurs feel
impressive figure compared to the last 6 years
confident enough to invest and initiate new
when the average was a 6.32% increase. The
business ventures resulting from the recent
income per capita this fiscal year is US$ 1,465,
political stability and price reductions of various
which stood at US$ 1,316 in 2014-15 fiscal year. [2]
capital machinery in the international market.
Moreover, according to the BBS both the industrial
According to the latest balance of payment (BOP)
and service sectors show an upward trend in their
figures released by Bangladesh Bank, net FDIs
BANGLADESH
Population
168,957,745
Official language
Capital City
Main Religion
Bengali Dhaka Islam
People's Republic of Bangladesh
11 / Lamudi Magazine
$2.001 BILLION FDI in 2015-16
60 MILLION INTERNET USERS
IN 2016
BDT 10,000 MILLION WORTH OF E-COMMERCE TRANSACTIONS IN 2016
11.09% & 6.25% GROWTH
IN THE INDUSTRIAL & SERVICE SECTORS RESPECTIVELY
53%
Growth Rate in Mobile Banking
$1465
PER CAPITA INCOME IN 2016
in the last fiscal year 2015-16 stood at $2.001
significant growth, reaching a new height in 2015
billion, up by 9.34 percent from the previous fiscal
with 53% growth year-on-year, amounting to Tk.
year, flowing in mostly due to major constructions
15,777,333.1 million in transactions through
such as Padma Bridge and various flyovers.
mobile phones -- the amount being more than half
Bangladesh’s power, gas, and petroleum sectors
the country's national budget, Recently, the
($574 million in FDI), which saw FDI of a meager
according to a report by the Bangladesh Bank, and
$50 million in 2014 have managed to surpass the
in 2014 transactions were worth Tk. 1,031,553.7
textile industry ($443 million in FDI),
million. According to a new survey, a third of the
telecommunication saw $255 million and banking
Bangladeshi population have access to mobile
$310 million in FDI. [3]
banking as of 2016, due to a 150% increase in
Internet penetration in Bangladesh has gone up in 2016, with a 13.2% penetration (surpassing 60 million users), a promising figure compared to the 12.1% and 9.6% in 2015 and 2014 respectively.
mobile telephone usage, from 2014 to 2016. 2,088 mobile money agents were surveyed in March 2016 and this yields a very prosperous future for the sector, as seen from the increasing number of
Though modest when compared to global
digital financial service providers and agents. [5]
markets, e-commerce in Bangladesh is definitely
The popular tourist destinations of Cox’s Bazar
on the rise. Currently, 1000 e-commerce sites
and the port city of Chittagong show promise as
operate in the country, and there was Tk.10000
alternative real estate investments. With half the
million worth of transactions this year (85% of
land purchase rates of Dhaka, these two locations
these were on a cash-on-delivery basis), averaging
offer very lucrative business opportunities for
Tk. 30 million per day. [4]
developers, since they are the next locations to
Mobile banking in Bangladesh is showing signs of
undergo massive urbanization after Dhaka city.
12 / Lamudi Magazine
13.2% Internet Penetration
9.34% Increase IN FDI
35% Youth Population
There is also a rise in the demand for green
There are still negative indications in the fields of
buildings (green construction or sustainable
Global Hunger Index (GHI) and General Economic
building), indicating a move towards the
Division (GED) indicating poverty is still prevalent
preservation of the landscapes in these locations,
and a recent move by the government to impose a
with more and more developers opting for
4% VAT on e-commerce from the 2015-16 fiscal
eco-friendly structures.
year shows an incoming burden on the nascent
Chinese President Xi Jinping visited Bangladesh
industry (although the FBCCI has strongly
(the first 30 years ago, in 1986 when President Li
requested the government to rethink this move).
Xiannian visited Dhaka), with the visit ending with
Bangladesh has shown very promising strides in
the promise of greater cooperation from China.
its endeavors to improve its overall conditions.
He said: “Bangladesh is China’s important partner
With a 35% youth population, the Bangladesh
in the South Asian and the Indian Ocean region,
future looks to be headed in a positive direction.
and the visit will be a milestone for the
[7]
China-Bangladesh relationship”. [6] The countries have signed 27 deals and a memorandum of understanding (MoUs), totaling US$25 billion. They include financing agreement for infrastructure, energy, information, and communication projects, and the two countries
Footnotes 1.The Financial Express 'A launching pad for economic take-off ' 2.The Independent bd 'Economic growth and poverty eradication' 3.Dailyasianage 'FDI to Bangladesh crosses $2b mark' 4.Mobile banking reaches one-third Bangladeshis
have agreed on bolstering their counterterrorism
5.Europe.chinadaily 'Xi: China considers Bangladesh important partner in South Asia'
partnership as well.
6. The Daily Star 'Adolescents and young people of Bangladesh'
16 / Lamudi Magazine
Architecture is a shapeshifter; reacting to the
Like everything under the umbrella of the
rapidly changing needs and preferences of the
construction industry, architecture has witnessed
society in which it operates. The discipline which
fundamental changes in response to the evolution
has brought masterpieces of functional eďŹƒciency
of information technology and the rapidly
to every city from Mexico to Jakarta is a global
globalizing economy. Pressure is coming from
phenomenon. Aesthetically pleasing buildings was
manic population growth, bigger cities, and tighter
once the sole domain of developed nations, the
budgets.
costs involved deemed unnecessary for developers in the emerging markets. As internet
“In most of the thirteen countries we operate in
penetration enabled global knowledge sharing the
architects are aected by downward cost
technical know how to create works of art became
pressure,� said Paul Philipp Hermann, managing
widespread. But what does the future hold for
director of Lamudi—the global property
architecture?
platform.�The natural response is to build smarter and take inuence from international thought leaders,� Paul said.
17 / Lamudi Magazine
MORE THAN A BUILDING The next ďŹ ve years we will see architects paying
COLLABORATION THROUGH NETWORKING
more attention to the opportunity presented
In the future, we will see consortiums of architects
when people gather in one space. Employers will
and engineers who work together on the same
seek to design their sta campus in a strategic
project but who are not necessarily employed by
manner. For example, the Apple Campus
the same ďŹ rm. It makes more sense that the
2—Spaceship Campus— which will open in April
discipline will be more consultative where sta
2017 has around six kilometers of glass inspired
cooperate and network to provide a better service
by the idea of a London square where houses look
for clients. In this way, the traditional work
out onto a large outdoor park. Sta morale is
process can be compartmentalized into smaller
becoming more important than ever as top tech
segments where the architect can charge a
ďŹ rms try to recruit the top executives and a large
separate fee for his part .
part of that is making people feel at home.
PUBLIC AND PRIVATE SPACES The future architect will hold a holistic view of the construction; he will ask himself not only how this building will beneďŹ t its private users but how the general public can beneďŹ t also. What you will see is ďŹ rms oering sections of their building to the public. It might be a case of a piece of art in the foyer or a sculpture that catches people’s attention, but expect more uidity between the once rigidly divided private and public spaces.
FINANCIAL ACUMEN As budgets shrink and developers try to cut costs, architects that have the economic skills to cope with the complex, globalized economy will thrive. Having core ďŹ nancial literacy will become an integral part of an architect’s knowledge set. Included in the new must-have auxiliary skills, is IT. Firms that have functioning IT systems that can cope with cutting edge technological advancements will gain an advantage.
18 / Lamudi Magazine
EVOLUTION OF DHAKA The architectures of a country are the collective
all the way back to 7th century CE with accounts of
reflections of its past, its cultural influences as well
urbanized settlements. Dhaka still embraces the
as its present setting. They tell tales of its
reminiscence of mosques, tombs, forts,
civilization’s journey through time, keeping some
caravanserais and bridges from the 1610 to 1717
of the mementos from the past as it looks on
Mughal periods, which it became part of during
towards its future.
the rule of Akbar The Great. Later the British rule
Home to 14.54 Million people and the largest city of Bangladesh, Dhaka has seen a multitude of transformations since the country’s liberation in
evoked new areas with new buildings and the city grew in importance as an administrative, educational and commercial centre.
1971. Political turmoil in a post independent
The beginning of the twentieth century marks for
Bangladesh hindered the country’s advancements
the bulk of colonial architectures still existing in
and set the nation back by at least a decade.
Dhaka city. Following the Partition of India on 15
Despite the challenges faced by a war ravaged
August 1947, Dhaka (then Dacca) was the
country along with numerous political upheaval,
provincial capital of East Bengal (later came to be
the city now is one of the busiest in the world and
called East Pakistan). Bangladesh gained
the 3rd most populous cities of the world.
independence 1971 and Dacca became Dhaka in
Dhaka boasts a heritage of more than 400 years of
1982.
her history. The city gained eminence with the
Over the course of time Bangladesh, especially
dawn of the Mughals in Bengal, but there are
Dhaka, saw growing urbanizing. The capital is in
traces of architectural ruins which prove her
forefront of such a shift to the point of
existence prior to the Mughals.
overpopulation. With the growing urbanization and modernization, Dhaka’s architectural form
The history of the region that is now Dhaka trails
gradually turned into modernity
19 / Lamudi Magazine
EVOLUTION OF DHAKA Dhaka’s architectural form gradually turned into modernity covering a wide range of Bangladesh’s heritage and tradition.
covering a wide range of Bangladesh’s heritage
dozen in this height range and several dozens
and tradition. If we look into the forms, styles and
more under construction. There are of course
characters of architectures of Bangladesh we will
many more in the 10 to 20th range. Currently the
find a wide variety of architecture, with each
tallest building in Dhaka is City Centre Bangladesh,
portion of Dhaka slowly (but surely) turning into
37 stories tall (561 feet) built in 2012. More
an urbanized area. From modern buildings with
significant than building heights are the numbers
blunt lines and endless windows to archaic
and density of these buildings. Not so long ago,
mounds of structured earth, from low-rises
private homes were not uncommon, but
speckled around city to high-rises shooting
now-a-days, high cost of land and high population
towards the skies. The opportunities for
density (Dhaka is second only to Hong Kong)
architectural sightseeing are virtually endless.
makes high-rise apartment living increasingly the
Admittedly, the architectural styles in many
middle class norm. There are many inhabitants
buildings were lacking in diversity and uniqueness
who would call this city a “concrete jungle”,
till the early 2000’s, more recent builders took the
although not unlovingly. A city of Dhaka’s
hint and evidently a lot of new structures are very
magnitude, is frequented by traffic bottlenecks,
different from their neighbors.
gravely affecting the day-to-day functioning of its populous. In an effort to contain the immense
Before the 1990’s, Dhaka high-rises were primarily
flow of daily traffic in Dhaka, the construction of a
concentrated in one area, Motijheel.
number of flyovers as well as bridges ensued.
Now the city is much more decentralized, with areas like Gulshan, Dhanmondi, Uttara housing at
And it has been proven effective; despite the
least half a dozen or so important clusters of
random long stretches of traffic, the overall
high-rise Commercial offices. Taller buildings in
connectivity of the city’s roads and areas has
Dhaka are typically 20 to 30 stories, with several
increased. There are a total of 7 completed in and
20 / Lamudi Magazine
around the city and 2 under development and 5
Church built during the 17th-18th century, are the
under procurement, with the first being built on
names of just a few of these historical remnants.
November 2004 in Mohakhali. Several bridges
All of these and more are located in Old Dhaka, a
were also constructed to better lubricate the
place vibrant with the history of the land. In fact,
busier parts of the city, and most recently the
Old Dhaka is a must-see tourist location in Dhaka.
Hatirjheel lake underwent such a transformation. Encompassing an area of 302 acre and accumulating a total of BDT 19.71 billion, the bridge linked several busy parts of the city; not surprising since Hatirjheel happens to lie in the city center. Not only has it made life much easier for the people, but it has done wonders for the aesthetics of the area. The night time visage of the bridge is magnificent to behold, making it a popular attraction for the people.
Dhaka may not have had the best start off since a long time, given the upheaval caused by the war, the flood or the earlier political instabilities, the seeds of which still remain to this date. The socio-cultural aspects of the country may still be recuperating from the harsh and uncaring lashes of fate inflicted on the land. But the ray of hope still remains and the city has remained resolute throughout her strifes. There was probably a time when its citizens could not even imagine the
Although the city has evolved through the ages
possibility of a modern and better Dhaka, but
into a megacity, Dhaka has not shed its ancestral
those days of pessimism are behind us. The city is
skin as there are still some of the remains of its
moving on, and taking long strides towards a
earlier inhabitants.
better tomorrow.
In Old Dhaka lies some very renowned monuments and structures that are at complete contrast with the skyscrapers of new. Dhakeshwari Temple, Lalbagh Fort, Armenian
22 / Lamudi Magazine
FIVE KILLER REAL ESTATE INVESTMENT MISTAKES Global investors face a time of much uncertainty. The president of the United States is a man that is capable of anything. It’s ‘America First’ and what that means for investors across the world is still unclear. With so much uncertainty, fund managers are encouraging their clients to turn to real estate again. As one of the few safe havens remaining, real estate particularly in the emerging markets is back on the radar. Countries like Bangladesh, the Philippines, and Pakistan are again enticing propositions according to analysts at Lamudi—the global property platform. But, there remains many pitfalls for budding property tycoons: five of which every investor should be aware of.
REAL ESTATE IS NO GET RICH QUICK SCHEME
ME, MYSELF, AND I
The idea that by investing in real estate you can
In real estate, you are reliant on other
become an overnight property tycoon is a fallacy
professionals for support. Without at least a
fuelled by so-called ‘gurus’ on infomercials and
suitable real estate agent, an appraiser, a home
radio stations. They write books like How to Make
inspector, and a closing attorney you will be up
a Million before you’re 30. By following their
against it. When it comes to the value-adding
step-by-step guides, they promise that you will be
remodeling phase of the business, you are reliant
rich in a short amount of time. The reality is
on having top plumbers, electricians, and general
something entirely different. Unless you are one
handymen to put the place together. If you are
of the lucky few, real estate takes time, patience,
trying to do all of this yourself, it will take you a
and a lot of hard work.
very long time to complete even a small project.
23 / Lamudi Magazine
FIVE KILLER REAL ESTATE INVESTMENT MISTAKES
FANTASY ESTIMATES
DODGING DUE DILIGENCE
There’s an adage in property circles that once
Moving quickly on a transaction can be the
you’ve done all your homework, double the
difference between making a ten percent margin
amount of time, then double the amount of
or just breaking even. “The pitfall that a lot of
money you first estimated. If you can still reach
investors fall into is signing off without extensive
that target and see a profit in sight, then it’s a
research,” said Nicolas Le Borgne—head of
good deal.
business development and business intelligence
CASH FLOW BLUNDERS
at Lamudi. “You see it happening all the time with
Running out of cash is the end of the road. As an
next thing they realize that the house has
investor with no cash reserves you face
structural problems, and they are faced with
bankruptcy, and not many business people can
expensive remodelling bills.”
ever recover from that. If you plan to buy, hold and rent properties you need to stockpile enough cash to cover maintenance costs. It takes on average 90 to 120 days before a property is leased out and the owner has to cover the mortgage, the taxes, the advertising, and homeowner fees; a huge expense that requires deep pockets.
young investors rushing head first into big deals,
24 / Lamudi Magazine
REAL ESTATE STARTUPS TO WATCH IN 2017
Today’s property seekers have so many more options than they ever had before. Property portals like Lamudi.com.bd are everywhere and there is a lot of variety out there. New technology companies are also driving change. A number of brand new platforms have proved themselves to be incredibly innovative. Some of these recently launched platforms boast specialist search facilities, new pinpoint mapping, and alternative services for particular kinds of property. With impressive features like these, 2017’s property portal landscape is more exciting than ever! Here are some of the best ones.
2-year-old Californian startup Opendoor has a
Having started in 2009, São Paulo real estate
mission to “empower people with a simpler, more
marketplace Viva Real has been Brazil’s leading
thoughtful approach to selling their house and
property portal for some time now. This an
buying their dream home”. They buy the property
impressive accolade, especially given Brazil’s huge
online and sell it online. Fast. Opendoor provides
population of over 200 million people. Viva Real’s
a full inspection report by an independent home
success has been driven largely by excellent
inspector, informing them and guiding them
search engine optimisation and a well structured
before they purchase. This makes the process of
business model. The company operates all over
buying and selling more honest and more
Brazil and has local offices in 16 of the country’s
straightforward for all parties, and on top of all, it
major cities. Although now well established, Viva
promises to give buyers a 30-day refund on their
Real still considers itself to have the qualities of a
new purchase if they don’t like the home afterall.
lively startup. It operates as an innovating space
Despite being so new to the market, Opendoor
and is now making waves in terms of its corporate
has received a lot of attention from investors and
social responsibility (CSR).
an impressive USD $210 million funding. So keep an eye out for Opendoor, an innovating company that is bringing online real estate transactions in line with other types of e-commerce.
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REAL ESTATE STARTUPS TO WATCH IN 2017
Virtual reality (VR) is the biggest game changer that
Forward-thinking commercial property platform,
real estate has seen in a long time. Rather than
Equiem, brings a new dimension to tenant
simply seeing images of a property, property
engagement. Commercial and retail landlords can
viewers can now tour the property of their choice
use the platform to interact with those working in
from the comfort of their own home. With over
their buildings. Through improving
250,000 virtual reality image maps, immersive
communication between landlords and those
media technology company Matterport is driving
working in their spaces, productivity can be
the real estate VR trend forwards.
improved, and everyone wins. Equiem strives to build communities in workplaces with its modern
Since its launch in 2011, Matterport has been
customer driven approach. With expert knowledge
building 3D media solutions which can be used by
on the kinds of spaces that create great work
real estate professionals to showcase their
environments for office employees, Equiem
properties through virtual reality. This technology
provides tenant engagement plans which are
is changing the way individuals and industries
tailored to its clients’ business objectives.
interact with physical spaces. Matterport’s teams have built “the first end-to-end media platform allowing users to easily create, modify, navigate, and build on digital representations of real places”.
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10 Most Eco-Friendly Cities in the World THE CONCEPT OF GLOBAL WARMING WAS CREATED BY AND FOR THE CHINESE IN ORDER TO MAKE U.S MANUFACTURING NON-COMPETITIVE. THAT IS IF YOU ARE TO BELIEVE THE OF THE PRESIDENT-ELECT UNITED STATES, DONALD TRUMP. FOR THE LEADER OF THE MOST POWERFUL NATION IN THEWORLD TO HAVE SUCH AN OPINION IS SCARY, AND QUITE FRANKLY DANGEROUS FOR THE FUTURE OF THE PLANET. THE PICTURE IN THE BACKGROUND IS OF
COPENHAGEN, WHICH RANKS NO
1 IN THE LIST
Denmark has built a solid reputation for its eco-friendliness. Cyclists are looked after, swimmers can enjoy city center paddling, and local ethical fashion designers are favored over factory produced branded clothing. Impressively Copenhagen has ambitions to become the ямБrst carbon-neutral capital city by 2025.
27 / Lamudi Magazine The United Nations published a climate change report in the journal Atmospheric Chemistry and Physics and their conclusions are startling, they expect many feet of sea-level rise, a halting of major ocean circulatory currents, and an outbreak of super storms. They predict that we will face these major threats most likely this century. Global leaders need to take immediate action, and much can be learned from the world’s greenest cities. 2. Vancouver Canada’s west coast has it much easier than most cities being located steps away from rolling British Columbia mountains and the Pacific Ocean, but it makes the most of its natural blessings; its use of renewable energy and hydropower make the air pure and clean. Urban living is emphasized in the city, and the city’s 200 parks make it easy for locals to breath fresh, healthy air.
Vancouver
3. Amsterdam Amsterdam is presently drafting a new sustainability masterplan which will transform the city center into a green, pedestrian-friendly environment. The city center will have new parks, food markets, smart transportation and urban farms and will take strides to reduce the impact of the many droves of tourists and dense traffic.
Amsterdam
4. Stockholm Sweden is a trailblazer for eco-cities. The restaurant scene is thriving with locally sourced raw materials and freshly caught fish. Environmental studies regularly list Sweden as the world’s most sustainable nation, but it is not today or yesterday that it built that reputation. Meticulous and long-sighted plans were made to restructure the city. Green homes are typical, and recycling is encouraged—the government financially incentive recycling.
Stockholm
5.Singapore The remarkable Supertree structure in Asia’s cleanest city is one-of-a-kind. Each one is 50 meters tall and acts as a symbol of Singapore’s commitment to eco-change. Locally, it is typical to have access to a rooftop garden; the most famous of which is the 340- meter long SkyPark on the top of the Marina Bay Sands.
Singapore
28 / Lamudi Magazine 6. Portland Consistently recognized as America’s greenest city, Portland uses 20 percent more renewable energy than the national average. It was one of the first cities to ban plastic bags and everything from recycling to carpooling are green activities that are encouraged.
Portland
7. Oslo Despite being the most populated city in Norway, Oslo still maintains its title as the greenest city. The city ranks low for greenhouse gas emissions and it is worth noting that 85 percent of their school children either walk or ride their bikes to school; those that commute use hydroelectric-powered public transportation.
Oslo
8. Freiburg This city is unique because amazingly it is a car-free city. Call it old-fashioned or outdated but to be a truly green city cars are not welcome. Freiburg in Germany also boast of its many solar paneled buildings and plans to reduce its carbon emissions by 40 percent by 2030.
Freiburg
9. Reykjavik Iceland’s capital is a thought leader and pioneer of geothermal power—providing almost 90 percent of the city’s heating. The country is close to being energy independent and the government has set goals to achieve that in the next few years. The city plan has placed a priority on reducing pollution and preserving green spaces—90 percent of residents live just five minutes walk away from a green area.
Reyakjavik
10. Berlin
Berlin
The public parks in Berlin are like a home from home; each tree is protected and many locals have an allotment garden to grow their vegetables. For many in Berlin, the bicycle has replaced the car and in DIY shops around the city residents are learning how to make furniture and clothing. The second-hand culture is active; placing less of a reliance on purchasing factory produced imported wares. Lamudi Bangladesh—the eco-conscious global property platform operates its thirteen country operations from Berlin; in a building that has energy-efficient lighting timers and where employees are encouraged to use the company bike for deliveries.
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IS REAL STATE DATA TRANSPARENCY THE NEXT BIG DISRUPTOR? Buying property is usually the single biggest purchase a person will make over the course of their life. The process of searching for a new home is arduous and any prospective buyer will consume vast quantities of information before tenuously making their final decision. The internet age has ushered a new epoch, where
available space. Transparency of data has
consumers have most of the power. When
completely disrupted other major markets
shopping for a house you can use Lamudi, the
recently, Uber being the classic example. So is
online portal that provides a prospector with
commercial real estate the next to change, change
numerous data points: recent sales in the area,
utterly?
price fluctuations in the past year, average prices
Value Added
per square foot and even mortgage prices. This puts the customer in the driving seat when it
The value added is now in analysis and
comes to negotiations.
interpretation. Data transparency creates the
Although information is now readily available
platform for agents and investors alike to become
online for private real estate, commercial real
empowered but what they do with that data will
estate remains a different animal. It is still quite
also have a big impact. The experts in online tech
difficult to obtain information about lease and
will combine the democratised data with an ability
sales transactions and even in some cases the
to analyse and interpret.
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Better decisions In investment sales, access to data regarding potential opportunities has already created a more efficient market where previously a net-leased investor may have been constrained to a specific area for diversity in his portfolio, he can now search nationwide for comparable capitalisation rates (annual net operating income divided by the cost or value). The capitalisation rate is a very common ratio in commercial real estate. It can help an investor evaluate a potential investment property. Cap rates can also be helpful when you look at trends, for instance if the rates are decreasing it could signal that the market is heating up. It would now be possible for instance for an investor in Bangladesh to size up a property in Gulshan, one of the most expensive neighborhoods in Dhaka. Having this information available through open data sources is an invaluable string to a commercial real estate investor’s bow.
transparency that is available to them enables in-depth interpretation of information for clients; market growth analysis and forecasts are closer to reality
Value Added The value added is now in analysis and interpretation. Data transparency creates the platform for agents and investors alike to become empowered but what they do with that data will also have a big impact. The experts in online tech will combine the democratised data with an ability to analyse and interpret.
Emerging open data economy According to a report by McKinsey & Company, open data can create multi-trillions of value in the global economy. The new economies are online and the new data is free, open and available to all. Information is power and with ease of access to data, consumers have much more power in the market. When data is easily accessible, it is not only
Property investors have more data points at their
good for real estate, but also for all industries. Any
disposal to make more informed decisions, and
business model that relies on protected information
this is making the markets more efficient Agents
is going to struggle in the future. At some point all
are now in a strong position also. The data
information will be open to everybody.
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Struggling to sell your home? There might be a few things you haven’t thought about. Everybody knows about fresh paint, a freshly mowed lawn and baked bread, but what else should we know? We have scoured the internet to track down data that you need to know if you.
The Starbucks effect:
to remortgage their house to fund the
It turns out being beside the global
expenditure, so making sure you choose
coffee chain has a positive effect on
the right option is an important
your property value. Besides being
consideration. The worst value for
close enough to walk to get a good
money is the kitchen remodel while
brew, you are also more likely to be
basement enhancements also offer
able to sell your house for a higher
What do we learn:
price. In the United States, a house sold in 1998 would have sold for an average of $102,000, while a home close to a Starbucks would cost on average of $137,000. That is no small amount, in fact, it is 35 percent.
If you don’t get the first photo right, the battle is lost, and the viewer will move on to the next listing. Hire a professional real estate photographer to take snaps of your property, they will choose the perfect time of day,
That is incredible:
with the most optimal lighting, to
And if the house was sold in 2012 that
ensure your listing is eye catching.
house would sell for $270,000 beside a
So, to summarise we recommend your
Starbucks or just $169,000 without one
ideal house should be the number 7,
in the neighbourhood. That gap jumps
next door to a chain Restaurant or
to 60 percent. So, it might as well be
Cafe, with a newly renovated bathroom.
worth getting out google maps and
A Japanese bathing tub might just be
locating your nearest Starbucks
enough...
before purchasing your next property.
Not all renovations are equal: It has been proven that the greatest investment in your house is buying amid-range bathroom remodel. For every BDT spent it will return 1.71 BDT. Renovations can be extremely expensive; in some cases, people have
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Seven swans a-swimming: While having a lake full of swans at your house would probably add value, that’s not what we mean here, but using the number seven could have a negative effect on the asking price. Homes with 777 as their address fetch on average 2.1 percent less than their estimated value. Even house numbers that include 777 for instance 12777, sell for 1.9 percent less. Nevertheless, houses with just 7 on their own can expect 1.8 percent more than the estimated selling price.
Listing photos: This may seem like an obvious one, but homes with high-quality photos get a significantly higher amount of money. It is estimated that listings with professional photos receive up to 47 percent higher asking prices per square foot. First impressions definitely count. According to an article ‘20 Seconds for Love at First Site’ in the Wall Street Journal, researchers tracked the eye movement of house-hunters and a total of 20 seconds is spent on photo number one, the exterior shot. After that point, the eye flits across with no extended focus.
Psychological pricing: In residential real estate, the asking price is more about psychology than reality. Most home buyers don’t realise
that setting an asking price is fundamentally a negotiating tactic. You set a price and you send a signal to the market. It really is a delicate balance. One of the biggest difficulties agents have is agreeing on a realistic opening price with their clients. There are many theories about how to set prices for example BDT 12, 795,475, indicates that the price is less negotiable than a round number like BDT 12,800,000. Precise figures exude an air of confidence. In addition, a price such as BDT 19,999,999 rather than 20,000,000 works at a subconscious level. The home may appear cheaper. The goal is really to make it stick in the buyer’s head that they are getting a bargain, when a buyer has to pay above asking price, the initial lower amount can offset some of the anxiety they feel about paying more in the end.
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NEW TREND OF SHARED WORKSPACE IN DHAKA STARTUP CULTURE
As a startup company, there is no massive bag of capital
Dhaka’s startup ecosystem. He founded a common
at the start. Budget is tight and productivity must be
office space named HubDhaka in Mirpur on March,
high to withstand the overhead costs of operation. With
2014.
each passing day the rental rates of property go up as more and more startups and business pop up. This had led to people working from home or having to meet their clients in restaurants or coffee shops. But one day, someone at a similar conjecture said “Enough!”, and thus the trend of shared of workspace was born. Common workplace or more popularly known as co-working space, addresses the space crunch faced by startups, sales teams or individuals. The concept of coworking space is simple. Hire a workplace that suits your needs and location. Use free and high-speed Wi-Fi, have an appropriate ambiance and privacy to conduct your In Dhaka this emerged at the beginning of 2014. Much vexed about the lack of proper place for business meetings, Sajid Islam, a computer science graduate, who had years of experience in the Silicon Valley, thought of introducing the concept of shared space to build up
Startups are very commonplace nowadays in Dhaka, ranging from the modest food-cart hidden away in the nooks and crannies of Dhanmondi to full-fledged e-commerce sites. The expansion of these startups have been at an unprecedented rate, and are believed to increase productivity and performance. If your colleagues are an arm’s reach away, it at least can promote camaraderie and harmony in the workforce. Plus, space may be small, it necessarily doesn’t mean it has to be poorly designed. Rather designers are expected to show more creativity while planning these spaces. All of this contributes to this newfound culture in Bangladesh. Work doesn’t seem like work if it’s among friends and when there is vibe of constant collaboration among the employees, creativity will soar.
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DH
AK
A 2 nd So P ut ol m h- lu os Ea te t st D i As n ia
Every human being produces residual waste matter, they need vehicles that emit carbon monoxide, and they need products which require factories to add a little more to air pollution and so on. Now imagine 15 million people. How much pollution do you think their cumulative numbers contribute to? Dhaka city is the third most populated in the world and has a population density of 115,000 people per square mile. It is not a surprising factor that Dhaka has recently been ranked as the 2nd most polluted cities of the South-East. Evidently, the most polluted countries are amongst the most densely populated.
37 / Lamudi Magazine the PM (particulate matter) count of the city is 2.5, coming only after China and India
Dhaka city is the third most populated in the world and has a population density of 115,000 people per square mile.
Bangladesh air pollution is the direct cause of 122,400 human deaths annually
In 2014, Bangladesh was ranked the 4th most
industrial sites are major sources of air pollution.
polluted country in South-East Asia, and 2016 saw its
Bangladesh Road Transport Authority (BRTA) said some
capital city labelled as the 2nd most polluted cities.
15,000 mostly reconditioned and second hand cars
These irrevocable facts should act as blaring sirens
were sold in Dhaka in 2008 - up 46 percent from 2007.
for the nation to start focusing on healthier living
In 2015 NASA stated that from 2005 to 2015, the
conditions.
percentage of nitrogen dioxide in Dhaka city’s air shot
Thousands of people in Dhaka are dying prematurely because of air pollution, say health experts. Air pollution is a serious environmental health hazard affecting the populations of Bangladesh. Air pollution of Bangladesh is caused due to increasing population and associated motorization. Indoor air pollution is mainly associated with the use of biomass fuels during cooking with poor ventilation. Industrial emissions and automobiles are the principle sources of outdoor air pollution. An estimated 15,000 premature deaths, as well as several million cases of pulmonary, respiratory and neurological illness are attributed to poor air quality in Dhaka, according to the Air Quality Management Project (AQMP), funded by the government and the World Bank. The World Health Organization (WHO) says vehicular air pollution is a major cause of respiratory distress in urban Bangladesh. According to the National Institute of Diseases of Chest and Hospital (NIDCH), nearly seven million people in Bangladesh suffer from asthma; more than half of them children. Cases of children suffering from bronchitis and chronic coughs have also shot up in recent years, it said. According to the Department of Environment (DoE), old, poorly serviced vehicles, brick kilns (there are currently about 1,000 in and around Dhaka), dust from roads and construction sites, and toxic fumes from
up to 79 per cent. This excessive pollution was caused by unplanned constructions and development work, smoke emitted from the brick factories surrounding the city, and fumes from vehicles. Most harmful to the human body, the PM (particulate matter) count of the city is 2.5, coming only after China and India. This year Dhaka comes second to Delhi. Delhi has several coal-fired power plants which their Centre for Science and Environment says is the most polluting in the world. The report published jointly by the US-based Health Effects Institute and the Institute for Health Matrix and Evaluation also states that in Bangladesh air pollution is the direct cause of 122,400 human deaths annually. Inhaling polluted air is the cause of breathing and pulmonary problems, heart disease and cancer. It is not impossible to address this situation. Alternative technology must replace the use of coal in brick factories, dust particles in construction work must be controlled, and mass transportation like metro and trains must be made affordable. Use of personal cars must be restricted. Pollution at Narayanganj and Gazipur has created world records. If the forest areas, rivers and water bodies of these places can be restored, the air will be fresh and pure. The government must take stringent measures to cut down the rate of pollution and establish some fundamental guidelines to tackle such a gaping problem.
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uers n e r p e Entr now k o t d nee sting e v in e befor ate t s l a e in r
Why should entrepreneurs invest in the first place? The answer is: to have enough money to live off of when they no longer can or wish to work. To put that money aside, however, they have to accumulate enough to offset inflation and the taxes that eat away at savings. To tackle such erosion of our wealth, real estate is a powerful ammunition. The great thing about real estate is that even in a bad economy, it will usually fare better than stocks. Land, after all, is a finite resource. Real estate is really just a matter of supply and demand & will continue to appreciate despite occasional slow-downs in the economy. In fact, it's proven to be the best way to create wealth, and an investor need not be a genius or a millionaire to succeed. Here are some tips, then, for aspiring entrepreneurs on getting started and succeeding in real estate investments:
Be aware of the latest market trends The first thing that you need to do is understand the market. Before putting your step into the real estate, you must be well aware of what you may and will be facing in the market while investing. Evaluate the costs and the risks before making any investment. Take into account the purpose for investing in property, what your primary objectives are.
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Plan your financial goals
Do a thorough financial analysis
Analyzing before purchasing, is a vital requirement. Figure out what are your expectations from the investment or what your financial goals are.
Analyze your finances realistically. Look at different alternatives to determine which makes the most financial sense.
We often discuss the “Time vs. Money” concept:
less attractive terms than your analysis says made
The more you have of one, the less you need of
sense. Be wary of sellers that try to overestimate
the other to reach your financial goals. This means
the value of the property through estimated data.
that you shouldn’t shy away from taking the time
While you can certainly use an estimation data to
to understand your goals while making sure each
start the conversation, make sure you know the
investment is a step toward achieving them. If you
real numbers before closing. Look at previous
are unsure exactly how to create financial goals,
years’ tax returns, property-tax bills, maintenance
meeting with a financial advisor is an excellent
records, etc. to get a good idea of the real income
first step.
and expenses. Once you have understood these
And never buy property at a higher price or on
figures, you should have enough information to determine whether or not acquiring the property fits with your financial goals.
Know the difference between real estate investment and the business of real estate.
Look at plenty of properties
As an entrepreneur, you already have a business, and real estate investment is best used to support that business, not replace it -- unless that’s your intention.
Remember not to judge a book by its cover or
In other words, don’t get so caught up in executing
simply don’t just grab the first property you look at. Too many investors buy properties because they “look nice,” or the investors don’t want to put the work in to look at what’s really out there. Remember, you won’t be living there, so don’t make your investment decision based on your personal preferences. While you shouldn’t fall into the trap of analysis-paralysis, make sure you are thorough in looking through properties. Give yourself a wide range of options, then narrow them down based on the criteria (goals) you have set for yourself.
transactions that your core business falters. If that happens, you’ll be facing a bumpy road to get back to stability. Unless your business is itself real estate, or you’re looking to get into the business full-time, always remember that pursuing these deals is a means to an end, not an end unto itself.
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While these tips will come in handy there will be numerous pitfalls along your path to investing in real estate.
Don't spend a fortune on books, tapes and seminars, then just put all that information on a shelf.
Don't postpone starting your investment program because you’re waiting for that perfect deal.
You absolutely do need to learn some basics before venturing into investments So, make sure you conduct some research, but
Plenty of beginning investors suffer from “a better deal may be just around the corner” syndrome.
don’t let “buying and collecting” information
This can backfire in a big way, and you could
become your endgame. Again, having goals in
potentially let a good deal slip just because you’re
mind will make the process much more
holding out for something better. Your task may
straightforward. It’s easy to get so tied up in the
feel difficult if this is your first property, but you
“research” phase that you never actually take
must realize that the “perfect deal” rarely (if ever)
action. Instead, write down specific questions you
exists. Better to execute on a deal that meets most
want answered or goals you want to meet before
of your criteria than wait for another that may
delving into the latest book/seminar/etc.
never come.