What is the meaning of land share? What is the future of land sharing in the context of Dhaka? And what are the pros and what are the cons? In this content, Property64 discusses the Land Sharing Apartment Trends in Dhaka, highlighting the opportunity or risky factors.
Land Sharing Apartment Trends in Dhaka: Opportunity or Risky
Before moving to the opportunities and risks, we must know clearly what land sharing is and what the current scenario is in Dhaka and the rest of Bangladesh.
What is Land Sharing?
It is a collaborative approach to real estate development. In other words, this is a real estate development model. You will find it frequently in the urban areas and big cities. In areas where there are high land costs and excessive demands, you may find such a concept. This has become very popular in cities like Dhaka. Indeed, it has spread across the other cities, for instance, Chattogram, Sylhet, Rajshahi, Rangpur, etc.
In this mechanism, the landowner makes a partnership with a developer. The owner doesn't sell the complete outright for money. Instead, the developer builds a residential or commercial project on the property. The developing company utilizes its own funding to build those. Then, when the project gets completed, the landowner gets his share that both parties agreed on previously. The landowner generally gets a specific number of apartments or commercial units. Meanwhile, the developers take the remaining units and eventually sell those to make a profit.
Opportunities of Land Sharing
Affordability
This model lets you enter the property market even with a lower upfront cost. Otherwise, to buy a fully constructed apartment, you would require an ample amount of money. So, it brings in affordability among many buyers.
Massive Demand
There is no shortage in demand of housing in Dhaka city. Every year, newcomers come into this city and need immediate housing facilities. So, the land sharing lets us share the minimal amount of land among a large number of users. This is a useful method for the era.
Long-Term Investment
This is actually a long-term investment, and you will get the best possible return value. In such a budget, there is no better and more profitable investment than real estate.
Flexibility and Control
Users enjoy more control over land usage than the flat if you consider it in the long run.
Monetization without Capital
Landowners don't need any capital investment to build their apartment. Instead, by utilizing the land, they can still get multiple units to stay, sell, and even rent those to earn money. Those flats are a great source of capital.
Modern Assets
This model will help you become an owner of modern, high-value apartments or commercial spaces. The building may also feature gyms, swimming pools, rooftop gardens, etc, amenities. All these modern facilities even make your asset more valuable.
Hassle-Free
All responsibilities from build-up to sales, even the permits (e.g., RAJUK approval), are under the developer's duty. So, the landowners can stay problem-free and can still have their apartment built.
Profitability
This is the model where developers can get a huge profit margin only by utilizing limited land resources. And they can carry on the project in some other places as well.
Prime Locations
Developing companies can get access to the prime locations of the city and they can offer more attraction to their clients. Without land-sharing the scope wouldn't be there for both parties at the same time.
Risks & Challenges
Project Delays
One of the frequent issues. Sometimes the project gets delayed and the parties need to suffer. The landowner would expect the project to finish on time but sometimes those don't take place in time and make huge delays.
Frauds
Sometimes fraud developing companies may cause economic losses and harm to you. Choosing reputable developers is crucial.
Conflicts
Ownership claims confliction, ambiguous land titles, or disagreements etc are also very concerning issues. Fake documentation or multiple claimants can cause the overall process to delay and a matter of problem.
Financing Issues
Obtaining loans for land-sharing projects can be not only complex but also less accessible.
Bad Quality Work
Unreliable developing companies can provide with bad materials and overall bad quality of works. As a result, your apartment can last less longer and the valuation may decrease.
