Over the past 17 years, about 43 foreign companies from countries like Japan, Singapore, UAE, Malaysia, Qatar, China and Korea have entered the country’s thriving real estate industry with investment rising at Tk 30,000 crore.
At a time when the global real estate boom is faltering, Bangladesh is on the right track with continued inflows of foreign investment into the real estate sector, thanks to growing demand.
Over the past 17 years, about 43 foreign companies from countries like Japan, Singapore, UAE, Malaysia, Qatar, China and Korea have entered the country’s thriving housing industry with investment s amounting to Tk 30,000 crore, according to the Bangladesh Investment Development Authority. (Bida).
Attracted by the strength of the housing market in Bangladesh, more and more foreign real estate companies continue to pour in – as industrialists say, there is about 30,000 crore more Tk in the pipeline expected to arrive this year next.
Although foreign investment in housing slowed in 2020 when Covid-19 nearly brought the economy to a standstill for months, it returned to the pre-pandemic level of Tk 1,800 crore the following year, according to Bida statistics. .
Additionally, a Singaporean housing company has signed a project with a private entity, while another company from the same country has expressed interest in a government township project – both in Dhaka involving Tk 28,400 crore.
While the influx of foreign capital is supposed to make housing affordable for homebuyers, however, the local real estate industry fears it will create unhealthy competition in their business.
The first major foreign investment in the country was in 2006 when Japan Taguchi Construction Co Ltd invested around Tk 5,000 crore in Japan Garden City, a very large apartment complex in Mohammadpur, according to company sources.
In 2015, another Japanese company Creed Asia Company Limited jointly with Bashundhara Group made an investment of Tk 3,000 crore in Bashundhara residential area.
In the three years from 2015 to 2017, Rakeen Development Company of the Middle East constructed 2,000 apartments on 50 bighas of land in Mirpur with an investment of around Tk 8,000 crore.
The company is currently implementing another project named Rakeen Tranquil Town in Kanchpur of Narayangaj with around Tk 3,000 crore, a senior company official told The Business Standard.
In addition, many other foreign companies that have made joint investments with local real estate companies include JCX Development, Japan Bangladesh Friendship Retirement Homes, China Garden City Developers Ltd, Asia Japan Real Estate, South Korean companies Hyosung Corporation and Daelim Corporation. , and Tokyo Development Engineers. ltd.
Japanese companies have made the highest investments so far, at more than Tk 10,000 crore, according to foreign company sources.
Other investments by various foreign companies are in progress. For example, recently Raffles Infrastructure Holdings Limited of Singapore entered into a joint venture with Army Welfare Trust, a major real estate transaction, to construct a Tk 8,400 crore township, one of the largest housing projects in Dhaka.
The Army Welfare Trust owns the 51.93 acre project land in Baunia for the development of an integrated residential town, “Trust Green City”, adjacent to Mirpur DOHS and Uttara in the northwest of the city.
More than 5,000 apartments will be built there, each covering an area of 600 to 4,000 square feet, people familiar with the development said.
Separately, in 2014, another Singapore-based company, Platinum Holdings Ltd, expressed interest to the Ministry of Housing and Works for the construction of around 10,000 apartments in the Purbachal New Town project on the outskirts of Dhaka. .
Engineer Ujjal Kumar Mallik, Project Manager of Purbachal New Town Project, told TBS that the Singaporean property company will invest Tk 20,000 crore in Purbachal New Town under a recently signed MoU with it.
The company and the government will begin construction once the remaining works on the project are completed, he noted.
Economist Dr Ahsan H Mansur told TBS that the influx of foreign investment into the country’s housing sector is good for both the economy and the people, as it will make housing affordable for a large part of population and will provide the government with a large amount of revenue. .
Also, many people will find employment in such housing projects, he said.
However, the Real Estate and Housing Association of Bangladesh (REHAB) opposes foreign investment in the housing sector.
REHAB Chairman Alamgir Shamsul Alamin (Kajal) said foreign investment flows could lead to unhealthy competition between domestic and foreign companies.