26 Jul 2018 - Bangladesh (Dhaka)
I am in Dhaka in Bangladesh. I have travelled here from Mali and have brought the rain with me. It is monsoon season here and that’s a challenge as this is very much a walk-the-streets project. I am here looking at the office market. I was in Dhaka late last year when I was focussed on the Farmgate/Sonargaon area of the city. I am now a bit further north in the “international corporate” area of Gulshan, Banani, Tejgaon (also an industrial area) and Mohakhali.
The market is relatively sophisticated with many new buildings having sprinkler systems, and some having LEED accreditation. Floor sizes are generally quite small at 3,500-7,000 sq ft (measured gross). Rents for high quality space average BDT 200 /sq ft /month quoting + service charge of BDT 15-25 /sq ft /month. This can go up to +50% in some cases where landlords feel that they have a “green” advantage or where there are enhanced management/security features.
What is unusual in this market is the practice of paying large amounts of rent in advance (up to 50%, also building in rent escalations) - on leases which can be 6 years, that is 3 years’ rent. Part of this is a deposit and part is an advance contribution to the yearly rent, so the yearly rent payable is reduced proportionately. As new space is generally delivered to a shell condition this makes Dhaka an expensive place for tenants in terms of upfront cost.
New Sheraton Four Points at Circle Gulshan-2
Bay Development’s Edgewater on North Avenue near entrance to Baridhara