The Covid-19 pandemic has wreaked havoc on most of the sectors of the economy. The real estate sector was not spared. The Daily Star has talked to Hossain Khaled, managing director of Anwar Landmark, a subsidiary of Anwar Group, to ascertain the present situation of the industry and the steps that need to be taken to shield the sector from the fallouts of the crisis.

DS: What is the current situation of the real estate industry?

Khaled: The real estate sector has become an industry of around Tk 60,000 crore, and in the past several years before the Covid-19, there was around 15 to 20 per cent annual growth. The demand for flats had increased. But the situation has changed amid the Covid-19 pandemic.

Alongside the 1,100 registered members of the Real Estate and Housing Association of Bangladesh, there were 2,000 to 3,000 unregistered developers.

Many of the unregistered companies have had to close their operations. Many went bankrupt. Sadly, the flats of the customers, who bought them with their lifelong savings from the small companies, got stuck.

The top 10 to 15 companies like us have somehow survived, but the sale has decreased sharply.

Many of the registered companies that had been in trouble even before the coronavirus outbreak have sunk further. Some of them have been compelled to hand over their projects to other companies to wind up operations for good.

The market has not reached the pre-pandemic level yet. The industry will take more time to return to normalcy.

DS: What steps were taken to help pandemic-hit customers pay instalments?

Khaled: We cannot force our customers to make payments as we consider them partners, even though we are bearing all of the expenses of companies. We have not imposed any penalty. We gave them additional time.

DS: What steps should be taken to cope with the financial fallouts and bring the housing facility within the purchasing capacity of the general people?

Khaled: The housing sector is an important indicator of the economy. If it goes down, the economy follows suit. But unfortunately, the sector has not been given priority as an industry.

It is actually a manufacturing industry. This is not just a matter of building a house. Products of around 300 companies are used in building a house. But we give VAT for buying every material.

Finally, customers have to bear all costs. So, the cost of housing goes higher, and we are falling behind when it comes to the cost of doing business. The government should take steps to reduce the cost for the sake of the customers.

When customers buy more, the government will get more revenue automatically. The real estate is a sector where there is no scope of playing hide and seek, and tax has been fixed per square foot. So, the government will benefit more if it helps grow the sector.

Right now, the housing cost has gone beyond the affordability of the general people. It should be brought within their purchasing power. We have to cut construction costs, especially in case of tax and registration, in order to do so. 

Secondly, if a person has to spend 35 to 40 per cent of his salary as the house rent, then they can't have the capacity to buy a flat. So, the tenure of a home loan should be extended to 30 years from the existing 10 years to lower the size of instalment for customers.

There is a Tk 500 crore housing scheme under the Bangladesh Bank. This loan is usually disbursed through some NGOs at a 1.5 per cent interest rate. The fund should be increased to Tk 2,000 crore or Tk 3,000 crore so that customers can buy a flat for Tk 75 lakh to Tk 80 lakh at a low interest rate. Banks, alongside the NGOs, can distribute the fund.

The discretionary power of government officials at various agencies, including the Rajuk, should be curtailed to remove bureaucratic red-taps and cut cost. 

DS: What is the current state of new investment in the sector?

Khaled: Despite the pandemic, this is a very good time for customers to invest in the sector.

Thanks to many steps of the government, the interest rate of banks has come down. The interest rate on fixed deposits schemes has declined to 5 to 6 per cent. So, if a customer invests at the construction stage, they can gain at least 15 to 20 per cent if they have to sell it later. The real estate is such a sector where nobody incurs a loss.

DS: What steps should be taken to attract new investment in such a situation?

Khaled: In order to encourage investment, the government should ensure an investment-friendly situation and treat private organisations as partners. Simplification should be brought into the whole process of business.

For simplification, the ease of doing business has to be ensured, and the cost of doing business has to be cut.

In order to start a new business, it takes 10 days, 20 papers and 20 certificates. The lengthy process has to be shortened.

DS: Anwar Group is the parent company of Anwar Landmark. How has Anwar Group ensured efficiency, productivity in the workplace and services for customers during the pandemic?

Khaled: Though our company was established 187 years back, Covid-19 was a new situation for the current management. But we faced it with courage. And we are in a good position and are overcoming the crisis.

We have not cut the salaries and bonuses of any employees. Even, we have recruited some employees in the last nine months. We have filled up all the vacancies from top to bottom.

Initially, our production rate reduced and sales came down. The major challenge was to import raw materials. The import cost also increased. But we had to supply our products to consumers by keeping the price within their purchasing power to fulfil our commitment. Commitment is very important to us.

If we bring any changes to our service, we give priority to the views of customers in this process. For example, in the real estate sector, many customers could not pay instalments. As per the rule, contracts might be cancelled, or late fees could be slapped. But we have waived or reduced their payment. We have tried to help our customers.

DS: What are the successful steps of Anwar Group that can be followed to face Covid-19?

Khaled: I have not come to such a position where I could advise others. But I can highlight a few things that we practise.

A number of things that my father always taught me were dedication, honesty, hard work, and commitment to work. No matter what the situation is, there is no need to back down.

If I am not honest with myself, I will not be honest with my company, employees and customers. Honesty, integrity and respect are essential. From cleaners to customers, everybody should be respected. Those are our core values.

In this competitive era, nobody can make a profit by selling products. Profits should be made while making purchases. And the products should be presented before the customer differently by adding values in case of commitment and quality of service so that customers remain loyal and continue with us for decades. We should earn the trust of customers by works, not by words.

Employee satisfaction is also important. If I take care of my employees, they will take care of my customers.