Economic Report On Navana Real Estate LTD

A STUDY ON NAVANA REAL ESTATE LTD
USING THE APPLICATION OF ECONOMIC

CONCEPTS, TOOLS AND TECHNIQUES
A STUDY ON NAVANA REAL ESTATE LTD.
USING THE APPLICATION OF ECONOMIC CONCEPTS, TOOLS
AND TECHNIQUES
Prepared for
Course: X
Course Instructor: X
X
Institute of Business Administration
University of Dhaka
Submitted by
X
X
Institute of Business Administration

University of Dhaka
May 6, 2017
A STUDY ON NAVANA REAL ESTATE LIMITED
Contents
List of Figures ............................................................................................................................................... iii
List of Tables ................................................................................................................................................ iii
Executive Summary...................................................................................................................................... iv
1. Introduction .......................................................................................................................................... 1
1.1 Literature Review .......................................................................................................................... 2
1.2 Origin of the Report ...................................................................................................................... 2
1.3 Objectives...................................................................................................................................... 2
1.3.1 Broad Objectives: .................................................................................................................. 3
1.3.2 Specific Objective: ................................................................................................................. 3
1.4 Scope of the Study ........................................................................................................................ 3
1.5 Methodology................................................................................................................................. 3
1.5.1 Sources of Data ..................................................................................................................... 3
1.5.2 Research Design .................................................................................................................... 4
1.5.3 Sample Design ....................................................................................................................... 4
1.5.4 Sample Frame ....................................................................................................................... 4
1.5.5 Sample Size ........................................................................................................................... 4
1.5.6 Limitations of the Study ........................................................................................................ 5
2 Background Study ................................................................................................................................. 5
2.1 Evolution of the Real Estate .......................................................................................................... 5
2.2 Real Estate: Riding wave ............................................................................................................... 5
2.3 Market Structure and Growth ...................................................................................................... 6
2.4 Real Estate Sector at a Glance ...................................................................................................... 7
2.5 Urbanization.................................................................................................................................. 7
2.6 Impacts of Private Real Estate on Patterns of Urbanization ......................................................... 8
2.7 Market Insight ............................................................................................................................... 9
2.8 Land Price Trends ........................................................................................................................ 10
3 About Navana Real Estate Ltd............................................................................................................. 11
3.1 Nature of Business ...................................................................................................................... 11
3.2 Principle Products and Services .................................................................................................. 11
i
3.3 Name of Product/Services .......................................................................................................... 11

3.3.1 Handed Over Projects ......................................................................................................... 12
3.3.2 Ongoing Projects ................................................................................................................. 12
3.3.3 Upcoming Projects .............................................................................................................. 12
3.4 Competitive Condition ................................................................................................................ 12
4 Buyer Behavior .................................................................................................................................... 14
4.1 Key Issues with supporting data ................................................................................................. 14
4.2 Present Market Demand ............................................................................................................. 16
4.3 Land Price Hike Trend ................................................................................................................. 17
5 Analysis and Applications of Economic Principles and Theories ........................................................ 19
5.1 Principles of Economics .............................................................................................................. 19
5.1.1 How People Make Decisions: .............................................................................................. 19
5.1.2 How People Interact ........................................................................................................... 19
5.2 Application of Invisible Hand ...................................................................................................... 20
5.3 Analysis of Demand..................................................................................................................... 21
5.4 Analysis of Supply ....................................................................................................................... 21
5.4 Circular Flow Diagram of Real Estate Industry.................................................................................. 21
5.5 Government Policy...................................................................................................................... 23
5.5.1 Possible effects of Rent Control .......................................................................................... 23
5.5.2 Impact of Rent Control on Dhaka City: ............................................................................... 24
6 Recommendation................................................................................................................................ 26
7. Conclusion ........................................................................................................................................... 27
8 Bibliography ........................................................................................................................................ 28
9 Appendix ............................................................................................................................................. 29
9.1 SWOT Analysis of Navana Real Estate Limited ........................................................................... 29
9.2 Name & Description of the Handed Over Project....................................................................... 29
9.3 Name & Description of the ongoing Project ............................................................................... 31
ii
List of Figures
Figure 1: Research Design ............................................................................................................................. 4
Figure 2: Booming Real Estate in Bangladesh ............................................................................................... 6
Figure 3: Real estate growth ....................................................................................................................... 10
Figure 4: Average land price ....................................................................................................................... 10
Figure 5: Interested in buying land properties (Age) .................................................................................. 14
Figure 6: Interested in buying land (Income group) ................................................................................... 14
Figure 7: Preferred Land Destination .......................................................................................................... 15
Figure 8: Occupation of Interested Buyers ................................................................................................. 15
Figure 9: Most popular areas to buy ........................................................................................................... 16
Figure 10: Growth areas in Dhaka property ............................................................................................... 16
Figure 11: Trend of land price hike ............................................................................................................. 18
Figure 12: Circular Flow Diagram of Real Estate Industry........................................................................... 22
Figure 13: Effect of Rent Control in the short run ...................................................................................... 23
Figure 14: Effect of Rent Control in the long run ........................................................................................ 24
Figure 15: SWOT Analysis............................................................................................................................ 29
List of Tables
Table 1: Urban Growth rate .......................................................................................................................... 8

Table 2: Urbanization Data ........................................................................................................................... 8
Table 3: Land use parameter ....................................................................................................................... 9
Table 4: NRELs Apartment Portfolio status................................................................................................ 11
Table 5: Price of Land .................................................................................................................................. 17
Table 6: Supply of Land ............................................................................................................................... 21
Table 7: Name & Description of the Handed Over Project ......................................................................... 29
Table 8: Name & Description of the ongoing Project ................................................................................. 31
iii
Executive Summary
Industrialization, population growth, urbanization combined contributes to the gradual increase
Bangladesh faces in number of people living in urban areas. Dhaka city accommodates 5 lakh new
arrivals every year. Government as well as the private sector are working together to provide
shelter for this increasing population. Investment in this sector is increasing over time and
competition is becoming higher as increasing number of firms continue to compete to pursue
self-interest.
In this report at first, a brief overview of the industry is given. Real Estate business took off in
Bangladesh in 1970 with only five registered firms. At present, more than 1500 companies are
active in the real estate sector with 1081 of them registered with REHAB (Real Estate and Housing
Association of Bangladesh), the sole organization of the real estate agents, developers and
builders. The report then identifies some major reasons for the development of real estate
business in Dhaka city.
The report then explores the magnitude of urbanization through shedding light on urban growth
rate and urbanization data, impact of private real estate on urbanization, market insight on the
real estate industry, land price trends.
Then the report focuses on Navana Real Estate Ltd., starting with its background information,
nature of business, products and services, portfolio, handed over projects, ongoing projects,
upcoming projects and name of other major firms that the company competes with. Then the
key characteristics of the buyer behavior are outlined, which is gained through primary and
secondary data. It is found that consumers aged between 40-50 years, with income above 75000
taka per month are the most interested in purchasing land or apartments. The most preferred
destination is Uttara, and the most preferred cities to buy land in are Dhaka and Chittagong.
The report then emphasizes on the application of the ten economic principles on the real estate
industry. Principles regarding how people make decisions, how people interact are applied and
explored. This is followed by analysis of demand and supply of the real estate industry. The
market for product and market for factor of production are discussed and demonstrated through
a circular flow diagram. The report ends with some recommendations for the real estate industry
and concluding remarks.
iv
1. Introduction
The economy of Bangladesh has very recently shifted from an agro-based economy to a service-
based economy; indicated by 56% of the GDP being generated from the service sector.
Industrialization has led to a gradual increase in the proportion of people living in urban areas-
urbanization in other words. This is an outcome of both population growth and rural to urban
migration. With the increase in urbanization a greater number of people are becoming city
dwellers. According to a report on The Daily Star, Dhaka accommodates 5 lakh new arrivals every
year. The rising urban population is followed by an increasing demand for accommodation. The
right of accommodation is a fundamental right, ensured by both UN declaration and the
constitution of Bangladesh. But the government of Bangladesh faces acute difficulties to ensure
housing for all. Thus comes the need of private sector and development of real estates.
The population density of Bangladesh is one of the highest in the world with 1237 people per
square kilometer in the country and an astonishing 28410 people living per square kilometer only
in Dhaka (World Bank). The situation is further aggravated every year through an irreversible
reduction of per capita share of land for housing, as a result of continuing population growth.
Providing shelter to all the people is one of the fundamental responsibilities of state by
constitution. But being the government of a poor developing country, it is almost impossible for
the government alone to ensure housing for all. As the public sector struggles to provide this,
private sectors have taken initiatives to ensure peoples fundamental need for shelter.
Government now shares with Real Estate Developers the task of providing safe decent places to
live to the general public.
But to serve a massive population of more than 160 million with only 1, 47,570 Square Kilometer
is no easy job. Hence, the shortage of land is not only a social and national issue, but also a major
economic issue. Government is trying to build a proper framework for the real estate sector.
People in the high income brackets are the main customers of these real estate products. But day
by day involvement of the middle class in the society is increasing. Government is trying to involve
low income people too by suggesting the real estate companies to plan housing for them.
Bangladesh has very recently turned into a middle income country with a per capita income of
1465 USD (Bangladesh Bureau of Statistics 2016). With the continuous struggle to fulfill the
other basic needs, real estate products that is assumed to be very expensive, is kind of luxury to
the majority of the population. Nevertheless, real estate sector is developing and growing in a
good pace along with a greater contribution to GDP. Investment in this sector is increasing over
time and competition is becoming higher as increasing number of firms continue to compete.
1
1.1 Literature Review

The term Real Estate comes from the term Realty which has for centuries, meant land and
all things permanently attached (Fisher, 2000). In a country real estate business can achieve
remarkable as the land and housing demand of people living in the city are increasing day by day
(Michael, 1999). Housing is not only provides physical shelter but also have significant impact on
the lives of the dwellers in the term of skills enhance, meant, income generation, increased
security, health, self-confidence & human dignity.
Since 1985 this sector has created homes for over 20,000 families in the Dhaka Mega City (Seraj,
2003). The lack of available and accessible house has been identified by the government of
Bangladesh as one of the most important hurdles in improving the housing conditions for middle
and lower income household (Hock-Smith, 1998).
Nordberg (2000) has clearly demonstrated that in most regions, housing has the potential of
becoming an engine of economic growth because of its high returns on investment, a high
multiplier effect, and a host of beneficial forward and backward linkages to the economy. The
National Housing Policy (NHP, 1993) commits the government to take initiatives in housing as a
provider, for weaker section of the people and as a facilitator in overall housing initiatives in
Bangladesh.
A Real Estate bubble is the manifestation of an economic bubble occurring in the Real Estate
market where the value of properties such as housing is characterized by drastic increases in its
value which reach an unsustainable level and then suddenly implodes. More specifically, a bubble
is defined simply as any substantial upward price movement over an extended range that
suddenly implodes. It is a process of continual price rising detached from real value and the
excess of sales over moderate price dictated by the market (Ning and Hoon, 2012). If the bubble
inflates at a very rapid rate and turns into a bubble of a very high magnitude, it calls for special
attention for the policymakers and the government alike as the prices of housing is at a high
deviation from its intrinsic values and calls for price correction through market mechanism and
other forms of regulatory measures, both fiscal and monetary.
1.2 Origin of the Report

The report entitled A STUDY ON NAVANA REAL ESTATE LTD: USING THE APPLICATION OF
ECONOMIC CONCEPTS, TOOLS AND TECHNIQUES is prepared for Professor Dr. A. K. M. Saiful
Majid, a Senior Fulbright Scholar and Director of the Institute of Business Administration,
University of Dhaka, as a partial requirement for completion of the course Managerial Economics
(E501) in the MBA Program at the Institute of Business Administration.
1.3 Objectives
The objectives of this study have been divided into two categories Broad objectives and Specific
objectives. The broad objectives give an overview of what this paper aims to accomplish, and the
specific objectives go into detail regarding how that aim will be accomplished.
2
1.3.1 Broad Objectives:

The broad objective of this paper is to carry out an intensive study, using the concepts and
theories of managerial economics in retrospective of the Navana Real Estate Ltd., i.e. to gather
and compile all possible relevant data and to provide an accurate depiction of the recent
development in this area relating the concepts of Economics learned in classroom sessions till
date.
1.3.2 Specific Objective:

In order to complete the broad objective of this paper, this report will attempt to pursue the
following specific objectives:
a. Study the market structure for the land aspect of the Real estate business of Navana;
b. Understand the principles of economics and their application in the real estate sector in
relation to the land, within Dhaka city;
c. Look into the contribution of Navana Real Estate Ltd. to the overall economy of
Bangladesh, focusing on GDP contribution and export contribution;
d. Understand the consequences of government regulations and taxation on the developers
and buyers in relation to this company;
e. Use the findings to understand the effects of the factors of supply and demand of Navana
Real Estate Ltd.;
f. Study the market structure for Navana Real Estate Ltd.
1.4 Scope of the Study

The scope of this paper includes an analysis of Navana Real Estate (Land) Ltd. studying the
business and market demand of the company in that particular sector.
1.5 Methodology
To fulfill the objectives mentioned before and in order to establish a credible report, the
procedure that will be followed for this paper is given below:
1.5.1 Sources of Data
1.5.1.1 Primary Data:

For the purpose of the research project at hand, the participants of this report will collect primary
data through the following medium:
Personal interview
Questionnaire
Most of the data will be collected through personal interviews of the related organizations. In-
depth interviews will be conducted with the employees and executives of the selected
organizations. The questionnaire will be used to gather more routine information that does not
require interviews.
3
1.5.1.2 Secondary data:
1.5.1.2.1 Internal sources:

Company website
Company profile
Company publications and annual reports
1.5.1.2.2 External sources:

Navana Real Estate Limited Website
Government and Outside reports
1.5.2 Research Design

A combination of both exploratory and descriptive research methods have been used in this
report. The primary data collected went into the descriptive research segment while the
exploratory research used the secondary data collected from various organizations through
interviews.
Recommendation &
Data Collection Analysis of Data
Conclusion
Figure 1: Research Design
1.5.3 Sample Design

In this report, the research data has been collected from two sets of samples, one from the
suppliers side and the other from the consumers side. Together, they would provide a solid
insight into the sectors demand and supply scenario.
1.5.4 Sample Frame

The required sample frame i.e. the detailed list of consumers is not accessible for us and as such,
no sample frame can be mentioned. However, considering the vast population base of the
country, it can be considered as infinite.
1.5.5 Sample Size

Since the sample frame is not determined, sample size for the questionnaire has been fixed at
50.
4
1.5.6 Limitations of the Study

The major limitation that is likely to be faced while preparing this report is the lack of updated
data, due to unavailability of access to said data, or simply because the data has not been
collected by the respective organizations. The smaller organizations often do not record their
data on a regular basis, causing the information available to be lagging behind by 1 or 2 fiscal
years.
2 Background Study
2.1 Evolution of the Real Estate
Real Estate business took off in Bangladesh in 1970 with only five registered firms. From the early
1980s the business started to flourish and showed robust growth. By 1988, there were 42
developers in business. At present, more than 1500 companies are active in the real estate sector
with 1081 of them registered with REHAB. In the last four decades private developers have
supplied more than 100000 units of apartments to the nation and will be supplying 25000 more
units in the next three years (Sheltech, 2011). The main reasons for the development of real
estate business in Dhaka city are:
i) Prompt increase in the population of the city;

ii) Scarcity of unoccupied lands;
iii) Extremely high prices of land;
iv) Risks involving purchase of lands;
v) Land owners motif to profit;
vi) Increase of remittance inflows which finance many purchases;
vii) Re- shaping of households to single family units;
viii) Standardized security and other services in apartments.
2.2 Real Estate: Riding wave

The economic performance of Bangladesh has provided strong impetus to the real estate sector,
which has been witnessing heightened activity in the recent years. Substantial end-user and
investor interest, large scale investment in infrastructure and rapid urbanization have
contributed to the growth trajectory of real estate In Bangladesh. The real estate growth story is
clearly visible in urban areas. High growth in services as well as manufacturing sector has resulted
in high demand for commercial and industrial real estate. The following table shows the
important factors which are forcing the real estate sector in Bangladesh.
Demand Pull Factors Resultant Impact

Robust and sustained macro-economic growth; Increasing occupier base;
Upsurge in Industrial & business activities, new Significant rise in demand for
economic sectors; office/industrial space;
Favorable demographic parameters; Demand for newer avenues for
Significant rise in consumerism; entertainment, leisure & Shopping;
Rapid urbanization; Creation of demand for new housing;
5
Array of financing options at affordable rates; Growth in services such as IT, tourism,
Scarcity of space in the important areas of the city; hospitality etc.;
Risks of purchasing land; Service facilities such as garbage disposal,
Hazards of construction of building; central satellite TV connection, apartments
Price of land and apartment increasing; services serves time, roof top facilities, and so
Rent of the apartments is comparatively higher on.
than rent of the privately constructed apartments;
Open market economy and remittance of foreign
currency is easy.
Supply Push Factors Resultant Impact

Policy & Regulations are going to be reformed Entry of domestic & foreign players
such as flexibility of foreign direct investment; increasing competition & consumer
Positive outlook of global investors; affordability;
Fiscal incentives to developers; Easy access to mean of project financing;
Simplification of urban development guidelines; Increase in developers risk appetite & allows
Infrastructure support & development by large scale development;
government. Improved quality of real estate assets;
Development of new urban areas &
effective utilizations of prime land parcels in
large cities.
Figure 2: Booming Real Estate in Bangladesh
The recent times have also witnessed an evolution of the sector - towards greater
institutionalization. With the entry of global players, inflow of foreign capital, evolution of capital
markets, geographical diversification and introduction of reforms, the sector has undergone
some significant structural changes. Even critical concern areas like transparency in the sector
are also improving significantly. The trend is expected to continue in the coming years.
2.3 Market Structure and Growth

The market concentration in the real estate sector, especially apartment projects, took off in the
Dhaka City in the late 1970s. From the early 1980s the business started to flourish and showed
robust growth. At present, more than 400 companies are active in the real estate business in the
country. About 95 per cent of this business is still dominated by the top 10 companies. The type
of the market is imperfect competition, Monopolistic Competition to be specific. The reasons
behind real estate sector to be monopolistic are:
Very large number of differentiated buyers and sellers;

The number of buyers and sellers is so high that no individual entity has the power to
have an impact on the pricing;
All the buyers and sellers are price makers as they have a degree of control over price;
The products, apartments in this case, are not identical or homogenous and thus not
perfect substitutes;
6
Imperfect dissemination of market knowledge.
The market is highly segmented, primarily based on location, price of the land and size of the
apartments. The main reasons for the development of real estate business in Dhaka city are:
Scarcity of open spaces in important parts of the city;

Hazards of purchasing land;
Rapid increase in the population of Dhaka;
Fiscal-Financial incentives such as the decrease in the rate of bank interest;
Restriction of remittance flows which financed the sector.
2.4 Real Estate Sector at a Glance

The rate of urbanization is estimated to be 5-6% annually for Bangladesh (REHAB, 2004). About
25% of the people of Bangladesh is now living in urban areas and 34% will be living by 2015
(REHAB, 2004) and 50% by 2025 (Singha D., 2001). There is shortage of housing supply in all urban
areas and it is increasing with current demand of 600,000 to 800,000 units all over the country.
Particularly in Dhaka this demand is estimated to be 60,000 units (REHAB, 2004). Dhaka is
currently growing very fast compared to other cities in Bangladesh as there exists a high demand
of plot and flat units. This huge and unfulfilled demand is highly attractive for the investors.
The Real Estate and Housing Association of Bangladesh (REHAB) is the sole organization of the
real estate agents, developers and builders. It has more than 450 members registered in 2009.
Moreover, around 350 non-registered real estate developers are doing business in this sector.
According to REHAB they are currently supplying only around 8,000 to 10,000 units of housing
apartments against the above mentioned huge demand. The approximate turnover in the real
estate sector has been Tk. 20 billion, which contributes revenue of around Tk. 2 billion a year to
the government. The sector now employs about 2 million people, which consists of architects,
engineers, management officials, direct and indirect labors. The average contribution to GDP of
this sector in the last five years was 12-14%. In 2007-2008, the growth rate of this sector fell to
5.93% from 7.01% of 2006-07 (Amin S., 2008). From 1994-95, over 10 years, Bangladesh real
estate sector grew at an average of 3.64% reaching the peak at 3.83% in 1999-00. Though it had
a fall in 2000-01, there was recovery in 2001-02. For the last 5 years this sector grew impressively
and showed a smooth rising trend. The comparative scenario of GDP shows a steady 6% growth
for Bangladesh.
2.5 Urbanization
Statistics & studies show that in 2000-2015, urban growth rate is expected to be at an average of
3.7% for Bangladesh. India, one of the most attractive markets of global real estate, is expecting
4.9% growth of urbanization. The scenario is further evident by the per square kilometer
population density growth. Thus in South Asia, Bangladesh holds the second position in terms of
urbanization rate and proportion of urban population. This scenario tells that, as India is a rapidly
growing real estate market in the world, Bangladesh also may attract more real estate than
before.
7
Table 1: Urban Growth rate
Country Population growth (million)

1975 2000 2015 2000-2015
Bangladesh 9 25 34 3.7
India 21 28 36 2.7
Nepal 5 12 18 4.9
Sri Lanka 22 24 32 3.1
Source: Making Cities Work, Urban Fact Sheet, USAID
Table 2: Urbanization Data

Urbanization Data of Bangladesh (In thousands)
Year 1970 1980 1990 2000 2010 2020
Urban Population 5,059 12,713 21,750 34,354 52,223 74,432
% Urban 7.6 14.9 19.8 25.0 31.1 37.7
Urban Annual Growth 7.8 5.8 4.7 4.3 3.7 3.0
Rate
Area Dhaka 1,474 3,257 6,621 12,519 19,393 N/A
Based Chittagong 693 1,332 22,65 3,651 5,389 N/A
Khulna 325 632 973 1,442 2,081 N/A
Rajshahi 108 238 517 1,035 1,676 N/A
Source: Rural and Urban Development Case Study Bangladesh, Oxford Policy Management
High population growth and rural-urban migration intensify the problems of urbanization in
Bangladesh. The problem is further aggravated by limited land supply in urban areas, lower land
utilization and lack of proper policy and planning of land-use. This rapid influx of population to
the capital city results in sky rocketing land prices and provides the stimulus for construction of
tall buildings. During the period from 1981 to 2000, the greater Dhaka population grew at an
average rate of 5.5% from about 3.44 million to 10.0 million. During the same period the built up
area increased from 104 sq. km (39% of the city area) to 150 sq. km. (55%). By the year 2015 the
expected population of the city is forecasted to be as high as 15.7 million. It is expected that
Dhaka will become one of the ten largest cities of the world by the year 2020 with a population
as high as 20 million.
2.6 Impacts of Private Real Estate on Patterns of Urbanization

The private real estate entrepreneurs are providing residential facilities for the higher income
group. Profit maximization is their only motto. Hence, lack of services and facilities are observed
in the recent real estate schemes. In observed land use composition with regard to the standard
are stated in the table.
8
Table 3: Land use parameter
Land Use parameter % of planned total land area % of actual land use area
Residential 40-65 80-85
Community Facilities 5-10 2.5-3.5
Road & Streets 20-30 10-12
Open Space 5-10 0
Shopping 5-10 0
Here it is seen that for maximizing the profit the private developers are selling more than 80% of
the total project area.
In Bangladesh the housing problem is most acutely faced by the lower income people. Due to
poor load bearing capacity of soil, high-rise buildings are very difficult to build in places being
developed by real estate companies at present. Hence, low density of residential area is resulting
in the form of inefficient utilization of the land resources.
The unexpected and unplanned growth of residential areas is creating extra problems for the city
managers. There is no link between the existing structure plan and the real estate developments.
Consequently these projects are creating sheer stress on the planned development of the city.
This is also creating polarization in the demand of services facilities.
2.7 Market Insight
Bangladeshs economy has grown by at least 6% every year since 1996 despite political instability,
poor infrastructure, corruption, insufficient power supplies, slow implementation of economic
reforms, and the 2008-09 global financial crisis and recession. The building construction industry
is considered as one of the fastest growing and largest sectors in Bangladesh. In 2008-2009, the
construction sector employed 2.024 million people which is expected to rise to 2.88 million by
this year (2014) and 3.32 million by 2020 (Report by WCC).
After 1990, a construction boom started in the country owing to the necessity for industrial
buildings, corporate offices, housing units, roads and other types of infrastructure. Bangladesh
has made major progress in recent years, with sustained macro-economic stability. Construction
sector is poised to emerge as a new growth engine in Bangladesh, which now thrives on the USD
20bn RMG sector and USD 14bn annual inflow of remittances from expatriate workers. According
to Bangladesh Bureau of Statistics, the construction sector accounted for a record 9.1% of GDP
in fiscal year 2012-13. The following table shows the comparison between overall GDP growth
and growth of Real estate, renting and business services:
9
Figure 3: Real estate growth
The growth rate of Real Estate, Renting and Business service sector has increased over the 2002-
2010 period. However, compared to overall GDP growth, this sector expanded at a slower rate,
which explains the downward trend in real estate as a percentage of overall GDP.
2.8 Land Price Trends
Figure 4: Average land price
Trends in recent housing prices can be observed in urban markets (mainly Dhaka) where market
data is more accessible and pricing trends here are normally advance indicators of pricing trends
throughout the housing industry of Bangladesh. Land prices in Dhaka have been increasing since
1975 and currently the price is USD 3566.14 per square meter on average. Price hike of land and
construction materials have added to the overall price hike. There is no control of the
government over the price increase of land within Dhaka city. Increased land price has a direct
impact on apartment price. Also, after 2005, price of bricks, granular sand, cement, rod etc. had
a rapid, almost exponential, increase. Both these factors have raised the apartment prices.
10
3 About Navana Real Estate Ltd.
Navana Real Estate Ltd (NREL), a part of Navana Group, started its operation in 1996 as a private
limited company & converted as a Public Limited on 8th September, 2010. Since its inception,
NREL has completed and handed over a great number of projects in diversified areas in Dhaka
where it is capturing the market for high and middle-income people. Of late, NREL has also
started its operation in different areas of Chittagong.
Considering the future expansion of Dhaka City and related demand hike for housing, NREL has
extended its area of operation into land development projects, handing over one land project in
Kallyanpur and two projects at Ashulia. Ongoing land projects include two projects at
Narayangonj and Ashulia.
NREL within a short span of time turned out to be one of the most trusted companies in Real
Estate sector and has been working on a number of apartments, commercial and land projects.
The motto of NREL is not only to deliver apartment or land ahead of schedule but also to maintain
the highest-grade construction quality that has gained trust and respect in customers.
Furthermore, NREL is pursuing the motto of becoming different, dependable and definitive.
3.1 Nature of Business

The Company is engaged in purchasing land & developing urban housing and selling to the people
of different income groups. The company also purchases high land for construction of multi-
storied Apartment building, Shopping and Office spaces.
3.2 Principle Products and Services

Principle products are Apartment and Commercial spaces which cover approximately more than
90% of total revenue. They also have Housing project which will flourish significantly in near
future.
3.3 Name of Product/Services

The company produces different type of Apartment and commercial spaces in different
location of Dhaka and Chittagong city categorized as Diamond, Gold, Silver and Pearl.
Table 4: NRELs Apartment Portfolio status
Project Status Number of Projects Total No. Square feet of Square feet of
in 2009-10 of Projects built-up area saleable area
Handed Over 17 59 21,12,791 14,10,704
Ongoing - 67 31,43,020 20,37,902
Upcoming - 75 8256383 51,54,524
11
3.3.1 Handed Over Projects

During the accounting year 2009-10, NREL handed over 17 projects to their clients located at
areas like Gulshan, Banani, Dhanmondi, New DOHS, Niketan, and Uttara. As a result, from
incorporation, total handed over projects of the Company reached 59. Average time needed to
complete and hand over a project since inception is 2 to 3 years. NREL had no significant delay in
projects handover to customers except some isolated events.
The name and description of handed over projects are added in Table 5 in the appendix.
3.3.2 Ongoing Projects

These projects are geographically concentrated in the northern part of Dhaka such as Uttara,
Bashundhara, Baridhara, Gulshan, Banani, DOHS etc. Besides that, areas like Segunbagicha,
Hatkhola, Kamalapur, Kalabagan, Wari, Purana Poltan, Mohammadpur, Lalmatia, Kakrail,
Eskaton, Bashabo etc. a r e also included. As per the acquisition agreements, NREL will have
to hand over 33% to 60% of total built area to the landowner and will retain residual to NREL
for sales.
The name and description of the ongoing projects are added in Table 6 in the appendix.
3.3.3 Upcoming Projects

To start the upcoming projects as per pre-scheduled manner, NREL management has already
acquired land in different areas. For 84 upcoming residential and commercial projects, the
Company already paid Tk. 179.93 crore as development cost and upfront cash commitment.
Future areas include Mirpur, Mohammadpur, Uttara, Banani, Gulshan, Baridhara, Kamalapur,
Tejgaon etc. where it is capturing the market for upper and upper middle-income class
people.
3.4 Competitive Condition

There are more than 1500 Companies in Real Estate sector in Bangladesh. Among them 898 are
the members of REHAB. The sector contributed 14% to GDP on the fiscal year 2009-10, & within
a span of three decades, the turnover from this industry has reached to more than 28000m BDT.
The Govt. revenue stands on average 2000m BDT per year from this sector. The market share of
NREL is approximately 10%. The following are the major real estate companies in Bangladesh.
Asset Developments &

Concord Real Estate &
Building Technology & Ideas Ltd. Holdings Ltd.
Development Ltd.
12
Rangs Properties Ltd.

Bay Developments Ltd. South Breeze Housing Ltd.
Sheltech
Shanta Properties Ltd. Assurance Developments Ltd.
Dom-Inno Builders Ltd.

Eastern Housing Ltd. Advanced Development
Technologies Ltd
13
4 Buyer Behavior
4.1 Key Issues with supporting data
Buyers from the 40-50 years age
group are more willing to build their Interested in buying land
own houses in upcoming 3 or 5 or 10
years. properties (Age)
25
Furthermore, it has been identified that,
70% individuals aged 30 or less were 20
interested in buying land properties. 15
When it comes to this factor, people
10
from age group above 50 showed second
highest rate of interest with an 80% rate 5
of the 5 person surveyed, 4 person 0
showed their interest. However, dealers 30 or Above
30-40 40-50
and agents of land based property less 50
should be careful regarding the age No of people 10 15 20 5
group of 30-40, as it has been found from People said yes 7 9 19 4
this survey, that, only 60% of the
respondents showed interest in buying Figure 5: Interested in buying land properties (Age)
land based properties.
Respondents from the middle income group, i.e. 30,000 to 45,000 and 45,000 to 60,000 are
more interested to build their own
houses in future. Interested in buying land (Income group)
20
15
When it comes to the income group, the 10
people with 75,000 or above surprisingly 5
showed moderate interest, as only 50% of 0
the surveyed individuals expressed desire 30,000 75,000
to buy land properties. But, potential 30,000- 45,000- 60,000-
or or
45,000 60,000 75,000
sellers of land and property dealers below above
should be more careful about the Number 10 16 17 5 2
demand condition of income group of 30, Intersted 3 16 16 3 1
000 or below as only 30% of this group
showed interest in buying land property. Figure 6: Interested in buying land (Income group)
14
For building houses,

respondents mostly prefer 18
Preferred land destination
Uttara, Gulshan and 16
Dhanmondi, followed by 14
Mirpur, Purbachal, 12
Bashundhara and others. 10
8
NREL should keep in mind of the 6
Uttara, Gulshan and Dhanmondi. 4
Of the 39 respondents, who 2
showed interest in buying land 0
Moha
property, 16, 11 and 8 Gulsha Dhanm Purbac Bashun
Uttara Mirpur mmadp Others
respondents expressed their n ondi hal
ur
dhara
desire in the aforementioned No. 11 16 3 8 3 0 4 5
areas respectively. However,
considering the scarcity of land in Figure 7: Preferred Land Destination
Bangladesh and especially in
Dhaka, the capital city, NREL should also seriously consider the lands of Mirpur, Purbachal and
Bashundhara.
Among different occupational

Interested Buyers of Land (occupations ) groups, Businessmen, Private
16 Bankers, Engineers and Doctors
14 (both Govt. service holders and
12
10 private practitioners) are more
8
6 willing. Among the potential
4
2 buyer of lands, Bankers are
0 willing to buy lands because
Servi
Busi Bankers can get housing loan at
Doct Engi Bank Teac Lawy ce Othe
ness lower interest rate than others.
or neer er her er hold r
man
er Of Professions with high
No. of Individuals 14 5 10 1 9 2 7 2 income, Bankers showed a
Interested 12 4 10 0 7 1 4 1 massive interest, as 100% of the
individuals showed their desire
Figure 8: Occupation of Interested Buyers for buying land based
properties. But, demand of low
income professionals like:
teachers are significantly less then.
15
4.2 Present Market Demand

Dhaka and Chittagong are
the most popular
destination for property/
land buyers, while Sylhet,
Khulna & Rajhshahi are 3rd,
4th and 5th popular
destination. It can be
noticed even further, that,
areas in the eastern side of
Bangladesh (Sylhet, Dhaka
and Chittagong) has a
growing demand for land as
the opportunities are
growing significantly higher
within these regions.
Figure 9: Most popular areas to buy
Currently, Uttara is the most sought destination for property/land buyers of Dhaka city Gulshan
and Baridhara follows as 2nd and 3rd in terms of preference.
The market findings in this case, justify the survey findings of the respondents preference of land
areas in Bangladesh. However, unlike what it has been seen in this survey, residential areas, like:
Bashundhara and Baridhara is getting a comparatively higher demand due to a comparatively
lower price in a posh area.
Figure 10: Growth areas in

Dhaka property
The third market demand factor is the average land price in various divisions of Bangladesh.
16
Scarce supply of land is complemented with the increased demand for accommodation in Dhaka
city resulted in the extreme level of price increase in lands of Dhaka city with an astronomical
average figure of 14, 760,000 BDT. Chittagong follows next with an amount of 96, 67, 800 BDT
average price. Due to lack of activities, the land price is significantly less in outskirt areas like:
Rupganj, where average land price has been recorded lowest BDT 9, 52,512.
4.3 Land Price Hike Trend

In the first decade of 21st century, the price of per katha land increased unbelievably almost all
over the Dhaka city. Compared to the price increase of the earlier decade, the percentage
increase in price almost doubled, and in some areas it is three times to ten times the earlier price.
The following table shows the price of per katha land in the major areas of Dhaka city from 1990
to 2010.
Table 5: Price of Land
Price of Land/Katha
Year % Increase in price over the
past two decades
Area 1975 1990 2000 2010 Between 1990- Between
2000 2000-2010
Baridhara 25,000 600,000 5,000,000 40,000,000 733% 700%
Gulshan 25,000 600,000 2,200,000 25,000,000 267% 1036%
Banani 25,000 600,000 2,000,000 15,000,000 233% 650%
Mahakhali 25,000 600,000 1,800,000 12,000,000 200% 567%
Dhanmondi 25,000 600,000 2,200,000 20,000,000 267% 809%
Lalmatia 20,000 600,000 1,800,000 15,000,000 200% 733%
Azimpur 175,000 600,000 1,600,000 5,500,000 167% 244%
Mohammadpur 25,000 500,000 1,200,000 7,000,000 140% 483%
Shantinagar 20,000 500,000 1,500,000 10,000,000 200% 567%
Shamoli 17,500 300,000 1,000,000 4,500,000 233% 350%
Uttara 20,000 300,000 1,000,000 7,500,000 233% 650%
Cantonment 20,000 400,000 1,000,000 7,500,000 150% 650%
Komlapur 17,500 400,000 800,000 4,000,000 100% 400%
Gendaria 10,000 400,000 700,000 3,500,000 75% 400%
Basabo 2,000 300,000 800,000 3,500,000 167% 338%
Kollanpur 17,500 300,000 800,000 3,200,000 167% 300%
Mirpur 10,000 200,000 700,000 4,000,000 250% 471%
Badda 4,000 200,000 600,000 3,000,000 200% 400%
Demra 4,000 200,000 600,000 18,000,000 200% 2900%
Motijheel 50,000 1,200,000 3,500,000 20,000,000 192% 471%
Kawran Bazar 41,500 1,000,000 2,500,000 15,000,000 150% 500%
17
The following diagram shows the trend of land price hike:
Figure 11: Trend of land price hike
The price of land is increasing at a very high rate after 1990. After 2000, the rise in land price
became steeper. This price rise is unbelievable and unexplainable.
There is no control of the government over the price increase of land within Dhaka city. Increased
land price have a direct impact on apartment price.
18
5 Analysis and Applications of Economic Principles and Theories

5.1 Principles of Economics
5.1.1 How People Make Decisions:
5.1.1.1 People Face Tradeoffs:

While investing in real estate people face tradeoffs between the risks of investing the money to earn
interest and the delight of owning a land which might or might not appreciate in value.
5.1.1.2 The Cost of Something is what You Give up to Get It:

Suppose a banker is trying to make a decision whether to buy land or not. When he thinks about
the total costs and benefits from the possession of a piece of land, he might consider the fact
that the land will give him a sense of future security and pride throughout his life, but it might
cost a few million taka. One thing he may not even take into account is the time it takes to
complete the payment, and the interest he could collect if he instead chose to invest the same
amount of money in some securities or to save in a bank account. All the things he gives up in
order to buy a piece of land, are called the opportunity cost of possessing a piece of land.
5.1.1.3 Rational People Always Think at Margin:

In the case of buying a piece of land, it is not an option of buying a piece of land or to invest
behind, let us say stocks. For instance, when one is deciding whether to purchase a piece of land,
the person must compare the marginal cost of this purchase in terms of different locations and
marginal benefits (tax shield, joy and security of returns) associated with buying securities. By
doing this, one can evaluate whether the purchase is worth the attendant costs.
5.1.1.4 People Respond to Incentives:

Public policymakers should never forget about incentives, for many policies change the costs or
benefits that people face and, therefore, alter behavior. A lower tax on real estate, for instance,
encourages people to invest in the sector. On the contrary, if govt. hikes the tax rate on real
estate, people will no longer be interested to invest heavily in the sector. Therefore,
infrastructural development will be hindered.
5.1.2 How People Interact
5.1.2.1 Trade Can Make Everyone Better-off:

Trade allows people to focus on serving a specialized purpose in the economy, such as food
production, textile production, real estate development, computer engineering, etc. By trading
with other people, we get access to a much wider variety of goods than you would be able to
produce ourselves, and at a better opportunity cost (price). The reason why someone would
prefer buying a piece of land is simply that the person is making a future investment. He will gain
value through the appreciation of price. In future, he can contact a developer to build a house
for his family. The trade between a developer and a buyer thus benefits both. The developer
receives a reasonable profit for managing the entire activity of construction of the building, and
the buyer gets a safe house to live in with family.
19
5.1.2.2 Free Markets Are A Good Way to Organize Economic Activity, As Long As Some Rules
Are Applied:
Bangladesh works as a free market economy giving immense opportunity for the real estate
companies to grow.
5.2 Application of Invisible Hand
Adam Smith used the metaphor of the invisible hand to refer to the guidance and benefit society
receives when individuals act in their own self-interest when trying to make money. According to
Smith, when consumers are left to freely choose what they want to buy, and businesses are left
to freely decide what they want to sell, the self-interest of both will lead to decisions that result
in good prices and the right products in the economy and marketplace. As a result, Smith argued
that no government intervention is needed. We simply have the invisible hand of economic self-
interest to guide us. Let's explore the theory more to help it all make sense.
As demand for housing and land continues unabated, Navana Real Estate Ltd. continues its
business as a leading developer of the industry in Bangladesh. Most of the properties are in Dhaka
and most of the buyers are the people with monthly income over 75000 taka. The real estate
industry is the mainstay of the country's economy, which contributed 14% to GDP on the fiscal
year 2009-10, & within a span of three decades, the turnover from this industry has reached to
more than 28000m BDT. The sector The Govt. revenue stands on average 2000m BDT per year
from this sector. The market share of NREL is approximately 10%. There are more than 400
Companies in Real Estate sector in Bangladesh who compete with each other, buyers and sellers
come together in a market and prices are determined automatically as if an invisible hand were
guiding the market.
20
5.3 Analysis of Demand

Today, in the real estate industry in Dhaka, both price and demand for land have gone up
exponentially. In todays complex economic scenario, it is not possible to assume that except the
price and quantity demanded other things will remain unchanged in the long run. Though the
price of land in different locations of the city has increased on an average by 278.64% over a
decade (2000-2010), the demand for land will keep soaring. This is primarily due to the income
and inflationary effects which we cannot assume to be constant in the long run. Hence, a
representation of the demand analysis for real estate industry in the city is not possible.
5.4 Analysis of Supply

Below is the amount of land provided by Navana Real Estate Ltd.:
Table 6: Supply of Land
Land Project Location Area in Katha

Kallayanpur Land Project Kallayanpur, Dhaka 753.00
Green Homes Land Project Ashulia, Savar, Dhaka 201.43
Village Land Project Ashulia, Savar, Dhaka 339.00
Valley Land Project Konabari, Gazipur 53.00
Bhuiyan City Land Project Siddirgonj, Narayangonj 74.39
Kaligonj Land Kaligonj, Gazipur 876.00
Bhatara Land Badda, Dhaka 45.00
Barua Land Khilkhet, Dhaka 49.09
Dhogari Land Rajendrapur, Gazipur 171.51
5.4 Circular Flow Diagram of Real Estate Industry

The circular flow of income is a neoclassical economic model depicting how money flows through
the economy. In the simplest version, the economy is modeled as consisting only of households
and firms. Money flows to workers in the form of wages, and money flows back to firms in
exchange for products. Like every other economic entity Real Estate companies also go through
circular flow diagram. It has two markets.
21
Figure 12: Circular Flow Diagram of Real Estate Industry
Factor Market:
For Real Estate sector factors market is the market where factories spend on rents and buys
buildings and other equipment. For buying these commodities factories pay wage and salary to
workers, rent and price for buildings and other equipment and interest for the deposits collected.
The factor market, sometimes called the resource market, represents the purchase of resources
in an economy. In the factor market, households are the sellers of resources, and factories are
the buyers of resources.
Product Market:
The product market represents the purchases of finished goods and services in an economy. In
our case the product market consists of lands and apartments. Households are the main buyers
of goods and services in the product market, and businesses are the sellers of goods and services,
as shown in the top half of the figure. From the circular flow model, it appears that the product
market is a single physical location where products are bought and sold. But this is clearly not the
case. Instead, the product market represents the millions of buy-sell transactions that are made
22
every day in supermarkets, gas stations, convenience stores, department stores, bakeries,
laundries, dentist and doctor offices, delis, and coffee shops. Also, in addition to households,
other businesses purchase land and apartments too for commercial use.
5.5 Government Policy

Government role in terms of letting conducive policy environment for flourishing the industry in
less developed country has very little success story. In this prospect Bangladesh government
policy setting has been point on especially in case of real estate sector. Most extraordinarily
Bangladesh government formulate policy in such way it let more or less the sector alone, not
regulating it while almost everything else is heavily regulated. If the government of Bangladesh
imposed policies like rent control, it could turn to be disastrous for the sector.
5.5.1 Possible effects of Rent Control

Rent control is a special form of price control where the government places a ceiling on the rents
that the landlords can charge for houses and apartments. Rent control can either be in the form
of setting the maximum amount of rent a landlord can charge, or imposing a limit on the rate of
increase of rent every year. The set ceiling of the price is lower than that at market equilibrium.
There are several ways in which rent control affects housing in Dhaka city
5.5.1.1 Creating a shortage of houses and

apartments
The effect of rent control is not highly visible in the
short run. In the short run, the supply for apartments
for rent can be considered to be completely inelastic.
This is due to the fact that housing developments
tend to be long term projects, and changes in price
and rent for apartments cannot be reacted to quickly
by the developers. On the demand side, people tend
to have a reluctance in changing their housing
arrangements at short notice. These supply and
demand forces interact to result in a small shortage in
the housing market in the short run as a result of rent Figure 13: Effect of Rent Control in the short
control. run
23
However the effects become much more

pronounced the longer rent control stays in place.
As the ceiling imposed by rent control curtails the
profit house owners and developers can generate,
their incentive to build apartments and rent them
out decreases. This causes a decline in supply. On
the other hand, reduced rent due to rent control
encourages more and more people to seek
apartments for rent. This increase in demand,
coupled with the reduction of supply, results in a
large shortage in the housing market. The changes
in supply and demand are both more elastic when Figure 14: Effect of Rent Control in the long
run
a long term scenario is considered.
5.5.1.2 Flow of capital away from the housing sector

Due to the reduction in potential profit for developers due to the existence of rent control, capital
that would otherwise be invested in the housing sector is diverted away to other sectors. The
result is a deterioration of the state of the housing sector, and the growth of the city would suffer
accordingly.
5.5.1.3 Less maintenance of houses and apartments

As the demand for housing far exceeds supply of apartments available for rent, there is often a
long list of people waiting for an apartment. Landlords often impose restrictions when renting
apartments, such as renting only to tenants without children. Due to the excess of demand,
landlords often lose their incentive to maintain the quality of the apartments and do not trouble
to remodel apartments or make other improvements in them.
5.5.1.4 Large discrepancies in rent between new and old apartments

The effects of rent control become worse the longer the rent control continues. New housing is
not built because there is no incentive to build it. With the increase in building costs, the old level
of rents will not yield a profit. If, as often happens, the government finally recognizes this and
exempts new housing from rent control, there is still not an incentive to as much new building as
if older buildings were also free of rent control. Depending on the extent of money depreciation
since old rents were legally frozen, rents for new housing might be ten or twenty times as high
as rent in equivalent space in the old.
5.5.2 Impact of Rent Control on Dhaka City:

Currently there is no rent control in Dhaka City. However, recently the High Court has directed
the government to form a high-power commission tasked with recommending maximum and
24
minimum standard house rents for different areas in the capital city. This proposed rent control
could have dire consequences for the city.
5.5.2.1 Shortage of basic commodities

Being the capital city, there are already multitudes of people flocking to the city every year. With
rent control, this number will become overwhelming for the city to handle. There is already a
shortage of water, electricity and gas in the city, with these commodities being rationed during
different parts of the year in different parts of the city, and with more people, it will only get
worse.
5.5.2.2 The impact on the real estate sector

A city must grow in order to survive. The growth of real estate in Dhaka city has been rapid in the
past, but imposing rent control would severely hurt this sector. Investors would move their
capital away from the real estate sector to more profitable ventures. Without a thriving real
estate sector, the growth of the city will stagnate, and inevitable problems will arise as more and
more people come to the city.
5.5.2.3 Discrimination against prospective tenants

There is already a trend in Dhaka city of landlords declining to rent apartments to bachelors. With
rent control imposed and the subsequent shortage of apartments for rent, this form of
discrimination will increase. As a result, a large number of people, including those who come to
Dhaka seeking jobs, will have a much tougher time living in the city than they do now.
5.5.2.4 Deterioration of overall living standards

The shortage of housing would likely increase the number of slums in the city. The number
of people living in poverty would increase.
The traffic situation in Dhaka is already horrendous. With more people coming into the
city as a result of rent control, this would only get worse.
With the increase in the population, the water logging and drainage system of Dhaka city
would deteriorate.
With these potential problems facing Dhaka city due to Rent Control, it can be considered as a
severe detrimental factor towards the growth and sustainability of Dhaka City.
25
6 Recommendation
The objective of this research was to gather a comprehensive idea about land aspect of one of
the Real Estate Companies, Navana Real Estate Limited. Based on the observations of the
participants, data acquired from the major secondary sources, utilizing the theoretical knowledge
acquired from this course, the following recommendations can be made:
It can be predicted that, within the next 10 years, demand for land will be significantly high
due to the population boom and increase in peoples income. To tackle this future
astronomical needs, government must devise a plan to increase opportunities and facilities
in the northern region of the country, as it has been seen, the demand for land is gradually
increasing on that part of the region.
Dhaka remains dominant in almost every aspect of land market that has been assessed in
this report. Hence, the government and other major authorities of Bangladesh, such as
Rajuk, must seriously consider a major expansion plan of Dhaka to cope up with the
astronomical accommodation and land needs in Dhaka. This is a feasible solution, as it can
be seen that outskirt regions like Rupganj is offering land at BDT 9,52,512 per katha on
average.
The principal demand of people is to access land around areas, where privileges like hospital,
school, and colleges are accessible. Considering this factor, the proper authorities should
focus on increasing privileges in regions outside major cities to places like: Rajshahi, Khulna,
etc. Should the privileges reach the standard of living that exists within the major cities;
people will begin pursuing untapped lands.
26
7. Conclusion
The standard of living in Bangladesh is gradually increasing day by day. As the income and the
demand for better and more sustainable resources increase, Bangladesh faces acute scarcity
natural resources to fulfill the need of each and every person.
The acute scarcity of land is no exception to this problem. In order to meet the demand of the
population in the most effective manner, the growth of population needs to be controlled.
However it is not a solution the administration should look for, should they want an effective
resolution to solve the pressing need for land.
Through the analysis of this research, one can simply find that crisis of land gets even intensified,
when it comes to the major cities, where the major establishments resides in. Unfortunately, the
number of these kind of cities are significantly low within this country.
Should the government undertake the initiative of intense planning to restructure regions in the
outskirts of the capital city, should the government take initiatives, to deliver major benefits in
the other regions, the land section of real estate industry of Bangladesh can fulfill the need of
demand and supply of land in a better fashion than at the present context, as people will find
more substitutes of lands. People will understandably pursue these options since the demand is
discernibly prevalent in this country.
27
8 Bibliography
Company Profile, Navana Real Estate. Retrieved from http://navana-realestate.com
Macroeconomics 2: Ten Principles of Economics. (2013, May 1). Retrieved from Forex
Trading Zone: http://www.forextradingzone.org/articles-Ten_Principles_of_Economics
Mankiw, N. G. (2012). Principles of Economics. Delhi, India: Cengage Learning India Private
Limited.
Mankiw, N. G. (2012). Principles of Economics. Delhi: Cengage Learning India Pvt. Limited.
REHAB. (2011). Dhaka: REHAB.
Samuelson, P. A., & Nordhaus, W. D. (2012). Economics. New York: McGraw-Hill.
Statistics, B. B. (2010). Statistical Yearbook of Bangladesh. Dhaka: Bangladesh Bureau of
Statistics.
Statistics, B. B. (2010). Statistical Yearbook of Bangladesh. Dhaka: Bangladesh Bureau of
Statistics.
MD. Asadullah Khan, Migration to Dhaka, The Daily Star,
http://www.thedailystar.net/news-detail-106930
28
9 Appendix
9.1 SWOT Analysis of Navana Real Estate Limited
STRENGTH WEAKNESS
Customer loyalty
Staff Turnover
Technology
Customer Service
Unique Ideas
Bad acquisition
Brand name
New ideas
Asset leverage
SWOT
OPPORTUNITY THREAT
New technology Political risk
Innovation Government reglation
Emerging market Bad economy
International exposure Mature market
Figure 15: SWOT Analysis
9.2 Name & Description of the Handed Over Project
Table 7: Name & Description of the Handover Project
Name of Location Handover Name of Location Handover

Apartment Apartment
Bailey Star Baily Road July-2009 Dianthus Uttara March-2009
Chateau De Husains Gulshan March-2010 Gloria Niketon Nov-2007
Southern Wood Dhanmondi Jan-2010 Paradise Uttara March-2006

Lake Shiri Garden Uttara August-2009 Raza Niloy Mirpur June-2007
Villa Gulshan July-2001 Sea Jewel (Sagor) Uttara July-2010

Suriya Imdad Garden Central Road July-2009 Carmem Skylana Uttara March-2009
Tower Gulshan April-2004 Pride Uttara July-2004
Kabir Garden Dhanmondi Jan-2006 Lake View Niketon April-2005
29
Verdancy Eskaton Aug-2007 Cottage Banani July-2004

Veneziane Dhanmondi Jan-2008 Sapphire Monami Banani Aug-2008
Garden Kallyanpur April-2009 Condominium Segun Bagicha June-2006
Sardinia Banani May-2010 Myriad Niketon April-2010
Homes Banani Feb-2001 Ville Akbar Mohakhali April-2010
La Fontana Niketon Nov-2008 Shefali Gulshan July-2006
Grosvenor Residence Gulshan March-2010 Banu Garden Mogbazar August-2006
Wood Sorrel Baridhara March-2010 Ecstasy Dhanmondi Nov-2005
Rangalia Banani Feb-2010 Timit Bashundhara August-2009
Motin Verbena Green Road Mar-2008 Vartex Wari Oct-2008
Laurestine Baridhara Sep-2009 Park Uttara Jan-2007
Cordelia Banani Jan-2010 Glory Mohammadpur July-2006
Karar's Islet New DOHS June-2010 Bliss Elephant Rd May-2005
Cosmos Hatkhola Feb-2007 Saffron DOHS Baridhara June-2010
Kinevart Bashundhara June-2010 Oleander Uttara July-2008
Sandriana Niketon March-2009 Rafia Diapensia Segun Bagicha July-2010
Bilkis Laurent Gulshan Nov-2009 Summer Hill Uttara Feb-2009
Pearl Uttara Sep-2006 Delphinium Mohammadpu Nov-2008

r
Orchid Gulshan Sep-2005 Villa Marvella New DOHS July-2010
Le Caprice Banani Jan-2010 Shamim Beaumont Banani June-2010
Venus Sukrabad June-2006 Sky View Niketon Sep-2005
Mirabad Navana Mirabad Aug-2008
30
9.3 Name & Description of the ongoing Project
Table 8: Name & Description of the ongoing Project

Name of Projects Location Present status: % of completion Possible year of
as per audited accounts handover
Alpenrose Segunbagicha 90 20
Ashir Animone Hatkhola %
24 11
20
Aspodal Kamlapur %
65 12
20
Ayesha Angelique Uttara %
27 11
20
Aziza Serenity Banani %
33 13
20
Beaufort Baridhara %
24 12
20
Blue Cascade Bashundhara %
21 13
20
Carnival Kalabagan %
10 12
20
Casa Grande Gulshan %
46 12
20
Celestial Wari %
48 12
20
Circular Height Razarbagh %
23 13
20
Darus Salam Uttara %
27 13
20
DH Tower Panthapath %
16 12
20
Diamonte Dhanmondi %
52 13
20
Ellsworth Banani %
35 11
20
Ferdous Fairfield Bashundhara %
41 12
20
Feroza Wilhelm Gulshan %
57 12
20
Fima Paradiso Bakshibazar %
78 11
20
Hermitage Hatkhola %
51 11
20
Kanak's Redulent Uttara %
27 11
20
Karotowa Baridhara %
22 12
20
Kazi Richmond Bara Moghbazar %
61 13
20
Khalil Gravillea Bashundhara %
36 11
20
Li Sianthus Banani %
34 11
20
Lilium Memories Baridhara %
14 12
20
Mandale Niketon %
28 13
20
Manor Park Uttara %
24 12
20
Mid Summer Dream Gulshan %
38 12
20
Miru Arimidale Gulshan %
29 12
20
Mojibunnessa De Lake Banani %
39 13
20
Mukhles Monarch Purana Paltan %
41 11
20
Neer Uttara %
27 11
20
New Buri Place Subhanbagh %
21 12
20
Platinum Residence Gulshan %
66 13
20
Rabeya Easdale Mohammadpur %
42 11
20
% 12
31
Rahim Ardent Kakrail 55 20

Rainbow Terrace Uttara %
42 11
20
Rebecca Teodora Uttara %
62 13
20
Roosevelt DOHS Baridhara %
91 11
20
Saptabarna Lalmatia %
72 11
20
Sattar Garden Eskaton %4 11
20
Shahria Rowshan Lalmatia %
22 13
20
Shams Anjum Bijoy Nagar %
23 12
20
Shaz Sylvan Baridhara %
27 12
20
Siddique Sorrento West Dhanmondi %
63 13
20
Sikder Wind Flower Bashundhara %
30 11
20
Silver Dale Bashaboo %
44 12
20
Siraj Lake Aster Dhanmondi %
72 12
20
Somerset Shantinagar %
39 11
20
South Wind Banani %
39 11
20
Splendour Banani %
28 11
20
Summer Wind Baridhara %
52 12
20
Sylvania Nodda %5 11
20
Usha Sylvestris Gulshan %
58 13
20
Water Edge Dhanmondi %
63 11
20
Zohra Square Banlamotor %
13 11
20
Ahmad Carnation Dorgahat, Ctg %
22 13
20
Centifolio CDA R/A, Ctg %
36 13
20
Devine Halishohor, Ctg %
33 11
20
Faizan Height Mehedibag, Ctg %
14 11
20
Florenza Abedin Colony, Ctg. %
17 12
20
Jalal Palace Mehedibag, Ctg %
7 12
20
Madani Tower Mehedibag, Ctg %
4 13
20
Meherun Villa Nizam Rd, Ctg %
10 13
20
Motaleb Grandure Nizam Rd, Ctg %
31 12
20
Reza Ornilla Khulsi, Ctg %
98 12
20
Weakinings Mehedibag, Ctg %
12 11
20
Land projects: % 12
Kallayanpur Land Kallayanpur, Dhaka 100 201
Green Project
Homes Land Ashulia, Savar, Dhaka %
100 1
201
VillageProject
Land Project Ashulia, Savar, Dhaka %
100 1
201
Valley Land Project Konabari, Gazipur %
100 1
201
Bhuiyan City Land Siddirgonj, %
100 1
201
Project Narayangonj % 2
32

Economic Report On Navana Real Estate LTD

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A STUDY ON NAVANA REAL ESTATE LTD

USING THE APPLICATION OF ECONOMIC

Institute of Business Administration

3.3 Name of Product/Services .......................................................................................................... 11

Table 1: Urban Growth rate .......................................................................................................................... 8

1.1 Literature Review

1.2 Origin of the Report

1.3.1 Broad Objectives:

1.3.2 Specific Objective:

1.4 Scope of the Study

1.5.1 Sources of Data

1.5.1.1 Primary Data:

1.5.1.2 Secondary data:

1.5.1.2.1 Internal sources:

1.5.1.2.2 External sources:

1.5.2 Research Design

Figure 1: Research Design

1.5.3 Sample Design

1.5.4 Sample Frame

1.5.5 Sample Size

1.5.6 Limitations of the Study

i) Prompt increase in the population of the city;

2.2 Real Estate: Riding wave

Demand Pull Factors Resultant Impact

Supply Push Factors Resultant Impact

2.3 Market Structure and Growth

Very large number of differentiated buyers and sellers;

Imperfect dissemination of market knowledge.

Scarcity of open spaces in important parts of the city;

2.4 Real Estate Sector at a Glance

Table 1: Urban Growth rate

Country Population growth (million)

Table 2: Urbanization Data

2.6 Impacts of Private Real Estate on Patterns of Urbanization

Table 3: Land use parameter

2.7 Market Insight

Figure 3: Real estate growth

2.8 Land Price Trends

Figure 4: Average land price

3 About Navana Real Estate Ltd.

3.1 Nature of Business

3.2 Principle Products and Services

3.3 Name of Product/Services

Table 4: NRELs Apartment Portfolio status

3.3.1 Handed Over Projects

3.3.2 Ongoing Projects

3.3.3 Upcoming Projects

3.4 Competitive Condition

Asset Developments &

Rangs Properties Ltd.

Dom-Inno Builders Ltd.

For building houses,

Among different occupational

4.2 Present Market Demand

Figure 10: Growth areas in

4.3 Land Price Hike Trend

Table 5: Price of Land

The following diagram shows the trend of land price hike:

Figure 11: Trend of land price hike

5 Analysis and Applications of Economic Principles and Theories

5.1.1.1 People Face Tradeoffs:

5.1.1.2 The Cost of Something is what You Give up to Get It:

5.1.1.3 Rational People Always Think at Margin: