Situation Analysis on Real Estate Business


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It is a depth situation Analysis done in a course Strategic Management with respected sir Mr. Tajuddin Ahamed. The report and presentation got A- grade in this course.

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Situation Analysis on Real Estate Business

  1. 1. Presentation: Situation AnalysisBefore Starting a Real Estate BusinessMGT 489Strategic Management<br />
  2. 2. Condition of Dhaka city<br />
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  8. 8. Developing The Surroundings of Dhaka City<br />Rajuk’sPurbachal New Town<br />
  9. 9. Real Estate : <br />Land and anything that is permanently affixed to it. <br />Real Estate started <br />Started In Dhaka city in the late 1970s. <br />Ispani group was the pioneer in this sector. <br />The business started flourishing with the inception of Eastern Housing Ltd. in the early 80s. <br />In 1988 there were 42 such developers working in Dhaka and now in 2010 there are about 400 large and small companies. 186 of them are Registered in REHAB<br />
  10. 10. The main reason of escalating of this business <br />Rapid increase in urban population<br />Increasing Price of Land and Apartments<br /> Scarcity of open space in the important areas of the city <br /> Purchasing land building construction <br />Decrease in bank interest rate<br />Rent becoming alternate return from investment for many including the expatriates studding remittance.<br />
  11. 11. Few fundamental areas essential to understand the nature of real estate:<br />Real estate property law<br />Real estate market<br />Taxes affecting real estate<br />The related aspects of physical environment<br />Characteristics of urban areas etc. <br />
  12. 12. Some aspects of real estate business<br />Core issues of Real Estate Business: The ‘core’ product is the ‘space’. It is concerned with providing ‘space ‘ for people to use this for living, working and playing.<br />Key decision areas:<br />Development:<br />Equity Investment:<br />Lending<br />
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  14. 14. Housing Credit Institutions In Bangladesh<br />At present the institutional sources of housing credit are:<br />A. Public Sector Housing Credit Institutions:<br />l. Bangladesh House Building Finance Corporation (BHBFC),<br />ll. Nationalized Commercial Banks (NCBLs)<br />B. Private Sector Housing Credit Institutions:<br /> l. Private Commercial Banks (PCBs)<br /> 2. Foreign Banks (FBs) scheduled in Bangladesh.<br />
  15. 15. Purbachal cluster Town<br />Soothing Your Life With Promise of Joy<br />
  16. 16. Location of Our Project<br />100 bigha area @ Kearia, a village of Rupganje Thana<br />2 km inner from ProgotiSarani-Kanchan Bridge Link Road<br />16 km from Zero point of Dhaka City<br />Existence of Gas & Electricity line<br />Neighbor position of Purbachal New Town<br />
  17. 17. Biggest, modern and well planned town in the whole south east Asia. <br />Along with prime minister's office, secretariat, RAJUK office, all other important offices are going to be shifted to Purbachal. <br />2nd campus of Dhaka University, biggest educational institute of Bangladesh, will be held in "Purbachal". <br />Along with foreign embassy, World Bank, all other international offices are shifting to "Purbachal". <br />"Purbachal" will be traffic jam free town. Because It is well planned and it has the widest road (180 ft - 300 ft)<br />"Purbachal" will be a town with a combination of latest educational systems and medical facilities. <br />"Purbachal" is 8 km (8 minutes in time) far from American Embassy, which is less than half the distance from Uttara. <br />Because of well planned business structural area, the importance of "Purbachal" will be up rapidly. <br />Info about RAJUK's "Purbachal New Town"<br />
  18. 18. Porter’s Five Forces<br />
  19. 19. Porter’s Five Forces<br />High<br />Low<br />High<br />Moderate<br />High<br />
  20. 20. PESTLE Analysis<br />
  21. 21. PESTEL Analysis<br />Political Factors..<br />
  22. 22. PESTEL Analysis<br />Economic Analysis<br />Primary goal is to achieve price stability with highest sustainable output growth<br />The liquidity overhang and the inflows driven appreciation pressures on Taka are expected to ease out with stronger investment activities, and with settling down of workers’ remittance growth and rise back of import growth to their trend levels.<br />Monetary Policy Strategy of the Bangladesh Bank<br /><ul><li>Domestic inflation crept to 6.51 percent in April 2010
  23. 23. The FY11 national budget expects 12-month average CPI inflation in Bangladesh to remain within 6.50 percent in FY11.</li></ul>Inflation outcome and outlook<br />
  24. 24. PESTEL Analysis<br />Government’s provisional estimate for overall FY10 GDP growth is 6.09 percent, against preceding year’s 5.88 percent.<br />Higher FY10 growth supported by BB promotion of SME lending, and higher social safety. <br />For FY11, the national budget projects real GDP growth of 6.70 percent<br />Growth outcome and outlook<br />
  25. 25. PESTEL Analysis<br />Total budget financing of the government in July, 2010 stood lower at Tk.3.05 billion, against Tk.3.85 billion in July, 2009. <br /> Budget financing <br /><ul><li>Total SME loans increased by Tk.8246.66 crore or 17.01 percent to Tk.56720.18 crore at the end of June, 2010 as compared to Tk.48473.52 crore at the end of June, 2009. </li></ul>Outstanding position of SME loans <br />
  26. 26. PESTLE Analysis.. <br />Socio- Culturul Factors..<br /><ul><li>Growing number of first-time home buyers
  27. 27. Increasing income levels
  28. 28. Middle Class or Upper Middle Class Group
  29. 29. Increasing number of households
  30. 30. Increasing affordability of homes
  31. 31. Changing demand and desire to live well
  32. 32. Higher Educated People Who have woe to have own apartment</li></ul>Lifestyle preferences & <br /> New consumerism Levels of education of Target Market<br />
  33. 33. PESTLE Analysis.. <br />Technological Factors..<br />Building technologies will differ from place to place. Use of appropriate and simple technology is essential to improve construction productivity.<br />Buyers expect a high level of service from their agent in return for the value of the home they are buying. They want their agent to be knowledgeable about real estate home prices and trends but the lack of technology cant execute their expectation properly.<br />Construction labor is relatively easy to obtain in Bangladesh. However, the services of skilled professionals such as Architects, Engineers and Quantity inspectors are less employed other than-<br />Technological innovations, which could enhance the quality of construction using materials, have not been sufficiently disseminated by research and extension institutions.<br />
  34. 34. PESTLE Analysis.. <br />Legal Factors..<br />The legal and regulatory framework concerning the housing and real estate development includes laws such as:<br /><ul><li>Building Construction Act (1952),
  35. 35. Town Improvement Act (1953),
  36. 36. Dacca Master Plan (1959) and
  37. 37. Building Construction Rules (1984) and
  38. 38. Bangladesh National Building Code (1993)</li></ul>These laws are not adequate to facilitate resolving habitation problems. However, two laws which were expected to be enacted, namely <br /><ul><li>Private Housing Policy – 2002 and
  39. 39. Multi- Storied Building Construction Policy –2002</li></li></ul><li>PESTLE Analysis.. <br />Legal Factors..<br />
  40. 40. PESTLE Analysis.. <br />Environmental Factors..<br />Climate issues<br />Terrible consequence of Flood & Cyclone Every Year.<br />The Condition of Our Selected Land : 12 feet Depth<br />Environmental degradation and depletion of natural resources are often observed in Bangladesh due to poverty, over-population and lack of awareness on the subject.<br />The Environment Conservation Rules 1997 has also been passed by the Parliament.<br />Natural Disaster Awareness and Education for Sustainable Development - target key stakeholder groups and integrate Education for Sustainable Development (ESD) principles and strategies.<br />Flood Forecasting and Warning Center<br />Environmental protection<br />
  41. 41. PESTLE Analysis.. <br />Environmental Factors..<br />Bangladesh has adopted the climate change convention as part of a strategy to increase access to sustainable energy resources.<br />Rajuk’s Conditions For a Green Housing Project<br />Atleast 1 park<br />Atleast 1 lake<br />20% Green area<br />Green Environmental Issues in Bangladesh<br />
  42. 42. Industry Life Cycle<br />
  43. 43. Industry life cycle<br />
  44. 44. Development Plan<br />
  45. 45. Developmental plan<br />1st Phase<br />
  46. 46. Development Plan<br />2nd Phase<br />
  47. 47. Development Plan<br />3rd Phase<br />
  48. 48. Development Plan<br />4th Phase<br />
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  52. 52. Thank You<br />