Known for building luxurious apartments and commercial complexes in many prime locations of the country, Rangs Properties Limited is operating under the umbrella of Rancon Holdings Limited. Since its inception in 1996, Rangs Properties has come a long way and currently occupied a leading positon in the country’s real estate sector. Fintech sat down with the company’s current COO of Sales and Marketing, Mr Syed Muttakillah to talk about the Rangs Properties, its vision and mission, future of real estate and the challenges it faces in Bangladesh, among other related issues.
An animated person with a lucid speaking style, Syed Muttakillah spoke in details about the aforementioned topics and a little bit about himself too. Here is the interview for our readers.
FINTECH: Could you start by telling us about your background? You were in the banking industry. Why you decided to get into real estate and how is it different from what you did before?
SM: My academic background is in Economics. After graduating I worked in research for a short while for an international body. Then I joined one of the top Human Resources consulting firm called Monower Associates where I worked closely with the CEO and international consultants like Towers Watson. I was there for a few years when funnily enough, Standard Chartered Bank (SCB) headhunted me while I was trying to headhunt for them.
While I never planned to become a Banker, since I was looking to get some corporate experience moving from consulting, I went for it. “A career makes more sense in retrospect” renowned former CEO of General Electric, Jack Welsh wrote in his best selling book “Winning”. That’s probably true in my case.
I entered the banking industry when it wasn’t very congenial. There was political instability and other things happening. Being a very demanding workplace, Standard Chartered gave me the platform to learn and grow as a leader, I can say without doubt. I take real pride in the fact that I got into the banking industry at a tough time, took the challenge and rode through it. I was there for about three and a half years before I took up this opportunity.
Real estate is something I was always interested in. I liked the aspect that you build a product from the scratch to create value. I also had a natural knack for things like documentation and records since I mostly dealt with my family property issues.
I never really got into the industry right after completing my studies simply because it wasn’t really a sexy industry, so to speak. Not many people while graduating from good universities, we must admit, aspire to be in this industry.
But then as luck turns out, I somehow caught the eye of my CEO, who offered me this position. It was a big challenge and a big job. Since a job at a top multi-national company like Standard Chartered Bank is considered very coveted, most of my friends, colleagues and family thought I was crazy. I deliberated on the decision quite a lot and did my best to learn about the industry, particularly about Rangs Properties.
My thought process behind accepting the position at Rangs Properties was to see that the company has a very young leadership. Our Group Managing Director, Mr Romo Rouf Chowdhury is one of the youngest businessmen in the country who likes to give opportunities to young people to grow his companies. Such philosophy is hard to come by and if they are willing to take a risk with me, I can take a risk with them!
My role mainly revolves around understanding the market forces and subsequently creating strategies and execution around good human resources recruitment
Thus far, it has worked out very well.
FINTECH: Could you tell us about regulatory issues in the industry that you have to face? What are the typical obstacles and what need to change?
SM: Real estate grew at the initial stage quite unregulated. That’s what happens everywhere. Regulations come with time. The same is true here. Now, regulations are tougher than before, but I look at that in a positive way. As a leader in the industry we welcome appropriate regulations, we want those to work for us and create a win-win situation for everyone. Some say that the market has fallen but I would say that there has been a consolidation in the market. As a result, we are benefiting from better output of products at a minimum cost- the lovely aspect of a free market where only the best have survived during the consolidation period.
There is a market, which demands value for the product with an x-factor. Otherwise, you will not get customers. This has compelled everyone to increase their efficiency. So, the whole industry has benefited.
Coming back to your question, regulations play a very important role. Now, we can always find business in the premium market. But in Bangladesh real real estate business actually hasn’t started yet. Why? Because the middle class and the lower class cannot afford a housing in Dhaka city. This is because the financing cost is so high in Bangladesh. If the typical installment for a mortgage loan cost is two or three times more than the rent, then people will obviously choose to rent which essentially is dead money.
So, we believe the real real estate never really got started in Bangladesh. When people will be able to pay a manageable down payment with a reasonable installment from banks, only then you will see a boom in the market. That’s where regulation is very important whereby government should make cheap housing loans available to the public. But unfortunately we see the opposite happening with increased cost of VAT/registration, etc, which will certainly not help the industry.
Real estate is a sector that will grow anyway. So, you shouldn’t have to worry about splitting the cake, you just have to make it bigger by facilitating finance for the customers.
FINTECH: How competitive is the market currently? And tell us about your niche market.
SM: I think the market is very competitive right now. However, as I said before, because of the market consolidation, new opportunities have propped up. While most of our competitors have a mixed inventory, we focus more on exclusive commercial projects which are landmarks. Currently we have four ongoing projects on Gulshan Avenue, all of which stand out like none other. The niche market is looking for value for money. Our job is to add that value in the form of creative design, aesthetics, location, functionality, etc.
With our tagline being ‘creating lifestyle’, we always try to introduce new things such as Building Management Systems, Double glazing windows for sound proofing and VRF air-conditioning systems for energy efficiency not only in commercial projects but also for residential projects.
Let’s say, we are offering an open kitchen at one of our projects, which will undoubtedly be ill received with most of our customers given what they are used to. But once we actually show them how it is functional, we believe it is something that will have helped improve their lifestyle somewhat. Similar case is for additional terrace space with our residential projects. Most of our customers were not willing to pay the regular rate for that extra space which was basically created to give some relief in the concrete mesh. However, we still believe in the idea that they will eventually understand the value angle and how it affects their living positively
FINTECH: Could you elaborate on your preference for commercial projects and residential projects? You talked about lifestyle change being the tagline. So, could you tell us what is unique in your products?
SM: Rangs Properties Ltd mainly focuses on commercial projects. The idea is to have 70 percent commercial and 30 percent residential. We also have a company called Rancon Developments Ltd or RDL, which focuses on high end residential projects. For example, we have a project in North Gulshan which is a 8000 sft single unit apartment designed by international architect Kashef Mahboob Chowdhury. This is a bold and very exclusive project designed by the only Bangladeshi architect who has won The Aga Khan Award for Architecture along with international celebrity Architect like Zaha Hadid. This is a big deal not only in our company’s context but for the industry as a whole.
As you can see, the uniqueness in our products is that we focus a lot on design. Our Group Managing Director personally invests a lot of time improving designs of our projects without passing on costs to the customers. Our flagship commercial project “Babylonia” on Gulshan –Tejgaon link road is considered one of the marvels of structural engineering in the country with a floating affect- a design by another legendary architect Mustafa Khalid Palash.
Subsequently, we also invest a lot on interior detailing. We also have our own interior companies- Insignia and Inspace Architects. Rangs Industries supplies best quality air conditioning and home appliance solutions. In short, we offer all-round services to our customers.
FINTECH: Do you think your target market is easily exhaustible? How do you see yourself expanding?
SM:I don’t really think it is exhaustible. If you go to North Gulshan you will see more than ten residential projects right now. We are very confident about our products. We believe there is a market for it and that’s why we are doing it.
Real estate in Bangladesh is not quite developed yet, like I said before. It is a challenging job to make a functional building. Then you have the challenge of introducing new way of doing things, which we are doing. Other than that we do have projects for the mass market. But one problem with that is the cost. We can’t go below a certain standard. In some places we were successful to provide high value and get that premium, but other places we were not successful. But we have learned from that mistake.
So, yes, we are going to go to the aspiring middle class.
FINTECH: What are the typical aftersales services in real estate development? What you offer?
SM: As I mentioned before, interior work is aftersales service, which we do. In our commercial projects requirements like wire inducting, provisions for AC and so on are required by customers, which we provide. We have a separate company to manage our properties company called Garda Shields Ltd.
Apart from these, Rangs Properties Ltd has a separate Customer Care & Engineering department to resolve customer issues in all our projects.
FINTECH: As a financial technology magazine we are interested to know what kinds of technologies and software you use in your day to day operation as a COO? Other than that, do you use any system software and project management software?
SM: Yes we have an ERP system used to maintain our inventory, finance, sales, etc. However, we are currently upgrading this system working closely with our international vendors. RPL has a very good IT team thanks to our CEO who has a great IT background. The IT team and it is currently developing a customer databases and dashboards for CXOs. The aim of the dashboards is to help CXOs or dept heads to be able to see relevant info on the company every day online. We have also developed an app. Our intranet page is top notch whereby we have uploading all the information about employees, leave requisition, notice boards, a ticketing system to facilitate interdepartmental work. These are the things we are using in the office.
In construction work we are moving towards certain technologies that we will start using. We are procuring machines for pasting cement on the wall which will cut down construction time by 1/4th in many areas. Currently this is done manually. We have the BMS or building management system for commercial spaces. This controls everything from AC to front door entry.
FINTECH: Do you want to add any final thought?
SM:I think Rangs Properties and real estate in general is in an interesting place. There is lot of things to be done. I think young people should come into this industry because now there is a room for a lot of new ideas. Many of the areas in this sector have been unexplored.
Hopefully, with coverage from magazine like yours the industry will get more positive exposure to attract talents who will spearhead this transformation.
FINTECH: Thanks very much for your time.
SM: You are welcome.