Prepare for the Elevator & Escalator Expo – IEE Expo, to be held in Mumbai, India in 10 months.

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The 6th International Elevators and Elevator Expo 2016 will take place on March 17th – 19th, 2016

in Bombay Exhibition Centre, Mumbai, India.


IEE Expo, the fourth largest Elevator & Escalator Expo in the world, that promotes latest products and innovative technologies, providing Indian and foreign brands the platform to showcase their latest developments of elevator and escalator industry, is coming back in 2016 to Mumbai, India. This Expo gives exhibitors a huge market wide opportunity to showcase their products and technologies to potential buyers.

To be held over three days, the Expo will allow visitors to get acquainted with the latest trends and effective technological solutions, and also receive up-to-date information about how to use them through technical seminars and discussions, which will be held alongside the exhibition.

This 6th Edition IEE Expo will present on 15,000 Sq mts gross area of exhibition space where a wide range of modern elevator, escalators and components accessories will be displayed on floor. There will also be display of  passenger lifts, freight elevators, service elevators, hospital elevators, small store lifts, attached lifts, home & apartment elevators, garage and parking elevators, elevators and lifts for invalids, elevators without machine room, panoramic elevators, elevators and platforms with hydraulic drive, ship’s lifts, sidewalk lifts, mine hoists lift platforms, controllers. In components & accessories, there will be controller components, door drives and related accessories, designer cabins, hoist ropes, trailing cables, variable voltage & variable frequency, push buttons, car operating panels, landing operating panels, LCD Display, scrolling Indicator, infra-red light curtains, remote monitoring of elevators and escalators, access control systems, traction machines, speed Governor, guide rails, mechanical fabrication and more.

Organizers expect more than 250 participants from 30 countries, the big players – Hitachi, Schindler, Esquire, Sematic, ThyssenKrupp, Fermator, Wittur, NBSL / Harshal and Altnemo – who are the key participants. An exclusive seminar focusing on, “Latest Trend, Technology & Processes for Vertical Transportation,” will also be a part of this Expo. Exhibitors will have an opportunity to represent their technical papers in-front of the larger audience and provide a much-needed look at the industry.

Visitors of 6th International Elevator & Escalator Expo will have an opportunity to get acquainted with all products presented in the exhibition, meet big industry players, companies and explore business opportunities and partnerships, as also share professional experience with colleagues. Eminent speakers from the elevator & escalator industry will also address the participants and share their working knowledge of the industry.

There will also be a Dream a Design Contest, based on the theme – “Design a Futuristic Elevator Car” – an exclusive contest has been planned for the final year architecture students and young working professionals in the field of design to understand their creativity design for future innovations and technology enhancement models. This contest will be judged by a jury of industry experts, and the best entries will get suitably awarded.

IEE Expo is a major industry business event and meeting point which provides to all participants of elevator & escalator market an opportunity to promote products and services, conclude long term agreements, increase recognizability of their brand.

For more information to participate;

Mr. Naveen Chandra – – +91 9845581689

Mr. Vashdev S.G – – +91 9740611121

Organized By – Virgo Communications and Exhibitions (P) LTD. 

By Mohammed Azrael

Read the latest issue of Elevator World India online!

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Elevator World India Magazine – Click on the magazine reader below to view at full-screen width.

The reader uses Adobe Flash. If you don’t see the magazine reader below, or you have an iPad/iPhone, please click here to read the magazine.

Grab a copy of the most current and all past issues by clicking on the year and cover image you desire. to receive hard copy email your details to Mr. Harish – +91 8147120308  

Elevator World India Magazine

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Elevator World India offers a wide variety of options for your company to showcase its products and services. The magazine has a circulation of over 8,500 India-specific readers to the elevator/lift and building industry and is published quarterly. Discover how a highly specific target audience and our superior editorial materials result in top readership and publicity for your company. This is your opportunity to enhance your client base, broaden your exposure and reach thousands in the Indian elevator/lift and escalator market.

Download pdf version of the 2015 Elevator World India Media Planner and publishing schedule here

Want to expand your products and services beyond India? ELEVATOR WORLD, an international information network, is read and respected throughout the world. Download the 2015 Media Planner and Editorial Calendar below:


ELEVATOR WORLD Editorial Calendar

For Advertising contact , Mr. Vashdev – +919740611121 –

6th International Elevator & Escalator Expo – 2016

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IEE Expo-2016 is the 6th International Elevator & Escalator Expo, scheduled to be held on 17th – 19th March 2016 at Bombay Exhibition Center, Mumbai, India.

IEE Expo is creating a platform with the right ambiance for business growth and networking, is what we have aimed for and achieved successfully.

This exhibition has attracted national and international participants and exhibits over the past five editions, showcasing all the types of Elevators, Escalators, Components and Accessories at the show. IEEE is the fourth largest international elevator & escalator expo in the world and an exclusive platform for vertical transportation industry players to meet, share and showcase their latest innovative products and technologies.

IEEE has been instrumental in providing an apt platform for the industry players from globally to gauge the market potential for their products in India. The expo will showcase the entire gamut of technology and products ranging across almost every project requirement and will be an excellent one stop destination to source new equipment, explore tie-ups, engage with the right audience, and find the apt solution providers and partners for future projects.

International Elevator & Escalator Expo a highlight in the industry since 2007, and provides the ideal opportunity to explore partnerships with international players and expand business.

For more information visit
Participate In IEE Expo 2016 and Enhance Your Reach.

Contact Us :

To participate contact

Mr. Naveen Chandra : Mobile +91 9845581689,
Email :
Mr. Vashdev S.G : Mobile : +91 9964441922,
Email :

How well the Indian elevator industry is prepared for reaching the sky of new installations : by Azrael

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The Indian elevator industry is soaring toward the 100,000 new-installations mark in the next three to four years. Are we ready for the ride? The rapidly growing real-estate sector, the fast-aging population and the recently introduced innovative technologies, aided by Prime Minister Narendra Modi’s “Make in India” program combine to benefit the elevator industry.

A recent report prepared by Netscribes is very optimistic about the elevator market, both in India and worldwide. While the global elevator market is poised to grow at a compound annual growth rate (CAGR) of 6.5% (fiscal years 2013-2018), the Indian market will grow at almost three times that rate. Standing as the second-largest elevator market in the world, India’s CAGR is estimated to be 16% for the same period, touching 89,000 units in 2018. Driven by a rapid growth in real estate, rapid urbanization, higher disposable incomes and optimistic foreign direct investments (FDI) flow, this number could be even higher. Fueled by the push towards infrastructure development in the country, the sky is the limit.[1]

Composed of two segments, the new-equipment installations and maintenance and modernization segments of already-installed equipment, there is a clear geographic divide in specializations. While emerging markets are driving the new-equipment installation market, the maintenance and modernization segment is still dominated by Europe and some North and South American countries. The faster-growing sector is, of course, the emerging markets — China, India and Brazil — while the European and American segments show stable growth.

Sreelakshmi Menon, director — Marketing & Communications, KONE, commented:”The Indian real-estate sector is an integral part of the economic performance and is expected to be a major beneficiary in the coming economic growth. The country’s growing urban population is equivalent to the total population of certain advanced economies. It is estimated that the size of the real-estate sector may increase fivefold to reach US$700 billion by 2025.”

Newer government initiatives, such as massive plans to set up “Special Economic Zones” and welcoming FDIs and private-equity investments in real estate will only add to the bottom line here and create the boom for the real-estate sector that will push for an increase in allied sectors, like elevators and escalators.

A big factor has been exposure, as the Indian industry, especially information-technology (IT) has opened up. Said B.S. Kumaraswamy, director — Monteferro India Guiderails and Elevator Parts Pvt. Ltd.:

“Today, exposure is much more, so lifestyle demands are higher. Also, there is much more awareness: exhibitions and expos that are being conducted, are also adding to information. Earlier, it was a sellers’ market — we could sell anything — but now, the range of products needs to be bigger; customers ask questions. In the future, there will be real-time technology; brands like Mitsubishi are putting up factories in Bangalore; they will bring [the] best of products, and the market is aware and willing to pay.”

The next big driver is the rapid urbanization in India. Over the last eight to 10 years, approximately 2,700 new cities have been added to the urban areas list, taking the number of cities in India to 7,900. A growing IT; IT enabled services; banking, financial services and insurance; and manufacturing sector based on office complexes together constitute 75% of the total office space available in India, and the demand for elevators is rising with their growth. Future cities and developing economies hold a lot of potential for infrastructure growth; therefore, urbanization is a major driver for the elevator segment in India.

As Sebi Joseph, managing director, Otis India, said:”340 million people, or 30% of the country’s population, currently live in cities. According to a recent McKinsey report, by 2030, it is expected that cities will house 590 million people, or 40% of the population, and that India will have 68 cities with populations of more than 1 million. As urbanization continues and the need for housing grows, India’s elevator industry will continue to grow just as rapidly.”

In addition, as the population of cities grows, demand for malls, shopping areas and hypermarkets is growing, as well. So, at 100 million sq. ft., the retail industry is also a big consumer of elevators.

To ensure a competitive urban infrastructure, metros and international airport projects have also been planned in most tier-I cities, and this has only added glitter to the real-estate boom. At an average cost of INR 300,000 (US$4,798) for buying and installing an elevator, the market is not really extremely price conscious, either.

A small but significant reason for demand is also the aging Indian population, though it is a slow process. Today, India is one of the youngest countries in the world. But, over the next five years, the trend may slow down, with advancements in medical support. While India had approximately 61.1 million people aged 60 plus in 2010, that number is touching 300 million this year. At this rate, this will be a big reason for residential, as well as public, elevator demands. In the next five years, elevators could become a standard fixture for every apartment.

In the Indian industry, every brand’s portfolio has a mix of maintenance packages and new products. Since the market still has a large number of lifts using old technology, the opportunity for technology upgrades is huge. Bigger companies have their own technology modernization departments that will be profit centers by themselves, sometimes with bigger revenues than new sales.

Then, there are the next-generation products that will add value to the market, and there are quite a few new products in the market that will focus on advanced technologies, environmental awareness and higher safety compliances. Most of these brands will also have stronger R&D and training arms, as well, which will add more value to the industry for future growth.

“India is the world’s second-largest elevator market,” explains Antony Parokaran, CEO — Schindler India. He continues:

“Our new supply-chain unit in Pune represents a key platform for our growth strategy and will enable us to continue offering competitive products to our Indian customers with even shorter delivery times. The Schindler factory campus is 200,000 m2, which includes an elevator plant and R&D center with future plans for [an] escalator plant. The elevator plant was certified by Bureau Veritas Quality International for ISO 9001: 2008 quality management system and was awarded the ‘IGBC GOLD’ rating. The new factory is integral to Schindler’s growth strategy in India and makes it more competitive in the market, enabling a higher market share and bringing better service for its [customers].”

“Knowing our market, customers and consumers is very important in any industry, and KONE is no different,” said Menon, continuing:

“Since our inception in India, we have been manufacturing in Chennai. . . . We are also developing a new state-of-the-art facility to cater to this growing demand. Our history of innovation is one of our success factors, and we always believe in being closer to the customer and consumer to innovate better. [This is the] main reason for [us] having our Indian Technology and Engineering Center (ITEC) in Chennai. ITEC has been playing a key role in supporting KONE India’s market development. We have always made systematic and long-term investments into our R&D capabilities to strengthen our innovation leadership in the elevator and escalator industry. This has certainly benefited the industry, and we have [been] featured for the fourth time in the Forbes list of 100 most innovative companies. With stronger R&D, engineering collaboration and an expanded facility here in India, we can serve the growing Indian market with even more innovative People Flow solutions.”

“Otis India is positioned to deliver to this growing segment, with the recently expanded facility in Bengaluru that has tripled in size and doubled in manufacturing capacity. The facility includes a new elevator test tower, standing at a height of 51.2 m with the ability to test up to six elevators at a time. Co-located with the factory is Otis’ R&D center in India that has also significantly expanded its engineering capacity in recent years.”

Sreekumar Nambiar, head of Sales and Marketing for Fujitec India, said:”There are reports that the Chinese market is flattening out; therefore, the Chinese companies will aggressively look towards India. We can expect a slew of [unheard-of] Chinese brands to come to India soon. We think that the market demand will be fulfilled by them in supply. Installation is [a] whole different story, as even with the current demand, companies are not able to complete on time. The only way out will be for elevator companies to establish large training centers to ensure a captive manpower base. There will have to be discussions at the legislative level to include [the] elevator-installation trade in industrial training institutes (ITI) in future.”

Make In India

Modi’s call to “Make in India” seems to have had an impact in the sector, as well. Said Menon:

“The global manufacturing landscape has been evolving at a fast pace. While continuous change in wages, energy costs, productivity and currency rates are shifting the global standings on cost competitiveness, factors other than cost are becoming more and more important for companies to decide the location for sourcing and manufacturing. Total manufacturing cost is central to decide any manufacturing location. If we were to assess India’s performance on the dimension of cost competitiveness, [we would find] India has the second-lowest manufacturing cost when compared on a global level. The elevator and escalator industry, if it were to propel the growth of its component-manufacturing sector, would need to maintain its cost advantage in this environment of fierce competition by keeping a check on the increase in wages and other factor costs. This is the easiest of the tasks in front of us. The tougher task for our industry is to address the competitiveness in the non-cost factor. This is where the government’s role becomes very critical to gain investor confidence, which has been addressed in this union budget with special impetus given to ‘Make in India.’ If we are able to address these non-cost factors successfully, then most component suppliers will [be] able to better support the growing industry.”

However, she added that while cost competitiveness is a critical criterion for any company to decide its manufacturing location, other factors play a key role, too. Factors like infrastructure, operational ease of doing business, political stability and transparency, tax structure, and access to credit also carry substantial weight. While India scores well on cost competitiveness, the country needs to focus more on these other factors. Added Joseph, “The ‘Make in India’ initiative will enable a deeper focus on what the Indian customer and building segment [are] looking for and match that with our continuing ability to offer the best in technology, quality and safety.”

Indeed, the smartest move for component, as well as elevator, manufacturers would be to step into the country, take advantage of the encouraging environment and set up a manufacturing unit. As Kumaraswamy said, “At Monteferro, we are planning to set up a facility in India in the near future to take advantage of ‘Make in India.’ Research is on, on the ways we can position ourselves in India as a manufacturing setup.”

“Make in India” will be the way to go forward, as customers will have the comfort of dealing with Indian companies, rather than Chinese ones, which are highly unpredictable. Nambiar added:

“Our engineering understands the needs of the Indian markets and, therefore, is able to satisfy customers’ unique technical requirements. Having said this, Indian companies will hugely be dependent on Chinese companies for components, as India still has a long way to go in the manufacture of drives and machines. Though there [are some] multinationals that have set up manufacturing in India, that only suffices for a small percentage of the requirements. The large [percentage] is still important. The drawback India has is lack of quality and the fact that government regulations don’t make manufacturing easy; it is far easier to import.”

Unless this scenario changes, Nambiar feels, “Make in India” may not resolve all issues at hand.

Challenges and How They Will Be Met

This growth, while being the revenue driver for the manufacturers, will also come with its own set of challenges, the biggest among them being safety issues, mostly due to badly or hardly maintained equipment; lack of trained manpower; and, in India, the lack of enforceable and stringent regulations. It is common knowledge that elevators in many commercial establishments, as well as residential buildings, are unsafe and becoming more so, largely due to poor or no servicing and maintenance. New machines need maintenance once every two years, which is a dictum not always followed.

Additionally, there are virtually no training institutes for elevator engineering in the country, nor is such training offered as a course. So, the only trained personnel we can expect to have are those with a couple of years of experience, and once this expansion starts, there will be a shortage of trained manpower that may hit the maintenance market hardest.

“The industry needs more manpower; we are not geared up to meet the surge in demand that’s expected, in terms of trained people. We have no education in elevator engineering, and the only way to learn is at work. Elevator sciences comprise of a lot of sciences and technologies in one place, and no proper education in the field is a huge drawback. Engineering colleges need to add elevator engineering as a curriculum with a full-fledged syllabus and government-approved curriculum so we can produce engineers in the field. Or else, it will become a critical issue, and we will not be able to meet a lot of demand for service, even if the supply orders are met.”

As a result of no professional training, operators and maintenance staff are taken on contract and outsourced another level, which means shorter retention periods, low wages and lack of standardized skills.

Fujitec handles the issue internally, said Nambiar:”As far as the installation readiness goes, we have a full-fledged elevator and escalator training center in our factory. Here we pick up ITI trainees who undergo classroom and practical training in our test shafts before being sent out to various sites. We will ensure that our training program produces high-quality technicians.”

So does Schindler, said Parokaran:

“At Schindler, we have proactively invested in training our employees on elevator installation and maintenance. Our three state-of-the-art training centers, one each in Noida, Bangalore and Mumbai, ensure that each of Schindler fitters and service technicians is trained and certified to work on our equipment and our customers know that their elevators are in safe hands.”

“While the sector offers ample opportunities for development across different verticals, there are certain intrinsic challenges that hinder growth of the sector,” said Menon, continuing:

“Factors such as inadequate funding channels, shortage of skilled manpower and technology, slow development of urban infrastructure, land-related issues and [a] prolonged regulatory process for clearances are some of the key challenges facing this sector. Realizing the challenge at hand, several key reforms have been introduced recently, and many more are lined up to improve [the] global inflow of funds and promote growth of the sector.”

Finally, what does this growth mean to India’s leading brands? Menon said that most prefer to give a better direction to their products:

“While most of the elevator manufacturers are on an expansion mode to cater to this growing demand, [the] importance of safety and concern for the environment need to be addressed. At KONE, we constantly develop products and solutions that contribute to sustain urban development by developing energy-efficient solutions that move people smoothly and safely in urban environments.”

“A natural progression for any growing industry is consolidation. Growth also enables investment and technological innovation. Otis looks forward to delivering advanced technologies as an industry leader. For example, the Gen2® Switch is designed to continue running in power outages. The Gen2 Switch features environmentally sustainable design, can be coupled with alternative energy sources like solar panels and can lower energy use by 80%. In a move to strengthen our presence in the country, we have expanded our Bengaluru manufacturing facility by tripling the size of the factory footprint and doubling manufacturing capacity. We have also recently launched the Gen2 Infinity, which is built on Otis’ flagship Gen2 technology platform and caters to the industry’s need for a faster elevator.”

There could be negatives, as well, as Nambiar points out:

“Quality could be the victim when the volume goes up. As the demand goes up, there is a very good possibility of shortcuts being taken in both quality of product and installation. This could be quite dangerous, as elevators can cause fatalities. There needs to be a strong commitment from the companies to ensure that a certain quality level in manufacturing is maintained. We had already foreseen this growth, and, hence, we [built] a factory about three years ago, manufacturing elevators from 1 to 3 mps, which we think will be the most common specifications. We currently suffice our local demands and export to Southeast Asian countries, which talks about our quality. As the volumes [have arisen], we have planned the second phase of our plant, which will double our capacity, ensuring smooth supply to our customers.”

 Parokaran stated:”Schindler will continue to grow at a rate faster than the market and maintain the highest standards of safety and reliability. To achieve this level, Schindler continues to develop new products based on market needs, which are energy efficient and provide green mobility. With its full-fledged factory in India and the upcoming R&D test tower, Schindler demonstrates high focus on development and sustainability.”

The Indian elevator industry is poised for take-off. Cost effectiveness and safety innovators, along with green technologies, are the focal points of this growth. The market is hugely unorganized, and only the top 5% is served by known global brands. These, however, are setting the standards of product innovations — Otis and KONE are installing elevators that operate at a speed of 6-7 mps. Also, the trend toward machine-room-less elevators is on the rise, and fitting the traction machine at the top of the shaft, thereby saving space and building construction cost, is becoming more and more popular. The next step is smart elevators with environmentally friendly technologies that will also help cut the carbon footprint.

Covered By : Mohammed Azrael

Bangladesh’s strict laws construction laws will encourage more high rises : By Kanika Goswami

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A fast growing country with regulations that encourage high rises, Bangladesh could just be the next hot destination for elevator brands in the sub-continent.

Alamgir Shamsul  Alamin, President, Real Estate & Housing Association of Bangladesh (REHAB) and Director, Shamsul Alamin Group, one of the leading builders of Dhaka.

Kanika Goswami – Please share some insights into what the real estate scene as in the country for the last couple of decades?

Alamgir Shamsul Alamin – Bangladesh is a developing country. The population of this country is around 160 Million and is increasing rapidly. We witnessed a huge demand for apartments during the period 1995 to 2011, but from 2012 onwards the real estate sector has been going through a tough time. There are several factors involved here, but most important factor is the inadequate supply of Gas and Electricity. The present Government rules prohibited new gas connections, which has hampered the development in the real estate sector of our country.

Kanika Goswami – Over the last decade or so, how has the real estate trend changed in Bangladesh?  Could you share or refer to some statistics on the same?

Alamgir Shamsul Alamin – If we consider the last decade only we will see that the demand and price of both the land and apartment have increased significantly. For example: In 2001 Price Per Square Feet of an apartment in Gulshan Area in Dhaka would have cost between 1,800TK to 2,200 TK Only, but now in 2014 the present price would be between 15,000TK to 20,000TK. So, the growth is very significant. As mentioned earlier, the population of Dhaka city is increasing at a very rapid pace. As a result, since 2000 the demand for real estate has been increasing accordingly.

Kanika Goswami – What are the government policies for high rise buildings in the country? Have you seen any changes in the regulations over the last few years?

Alamgir Shamsul Alamin – The Government of Bangladesh is very strict regarding the rules and regulation. Previously there were no rules as such that the real estate developer has to maintain a certain amount of open space while constructing the building. But at present the rules have changed and   developers are required to keep 40% open area while going for any construction. Thus the Government has encouraged vertical expansion rather than horizontal expansion and the developers have to maintain all the rules and regulation of urbanization and take approval from department of environment, clearance from civil aviation, fire service and local government.

Kanika Goswami – Traditionally the style and materials for construction have been of a certain origin in the sub continent. How has it been in Bangladesh? Is it changing now?

Alamgir Shamsul Alamin – The customers in Bangladesh are very sensitive and they always look for improvement and up gradation. To meet the demand of the customer we are also changing our materials. Previously we used European products but now since India, China, Korea improved their product quality so our customers are also accepting their products as well.

Kanika Goswami – Since when is the elevator industry gaining ground in the country? What would be the estimated ratio of area wise floors to elevators in most of the buildings? Is there any regulation around that?

Alamgir Shamsul Alamin – Elevator industry in Bangladesh started gaining ground after 1990’s. The trend of Bangladesh is (G+9) floor construction, and average residential property has at least one lift.

Kanika Goswami – As far as escalators and elevators are concerned, please tell us about the kind of construction quality they focus on?

Alamgir Shamsul Alamin – Escalators and elevators come in a variety of designs and quality. We must live up to our customer’s expectation so that they always feel that they got the real value for their money. There are certain standards that we have to maintain while choosing escalators or elevators for our projects. And as far as construction quality is concerned there is absolutely no compromising with the quality.

Kanika Goswami – What are the major elevator & escalator brands that the builder industry players in the country prefer? Which are preferred more- more about Chinese or European products?

Alamgir Shamsul Alamin – The major brand of elevators are Sigma, Otis, Fuji, LG used by the real estate companies in our country. Some developers prefer Chinese and European products, because these products are readily available and also give the benefit of choice from a vast array of design and quality.
Kanika Goswami – Are REHAB members working with more organized sector players or unorganized sector.

Alamgir Shamsul Alamin – Yes, REHAB members are working with a more organized sector players, there are approximately 200 nos. of organization directly or indirectly linked with this industry.

Kanika Goswami – Currently, what are the technology trends that one can clearly see in this industry in the country? Is technology innovation being adopted readily or there are hurdles in terms of costs, regulations etc?

Alamgir Shamsul Alamin – We are a developing country and our main strength is our population. We do have cheap labor compared to other countries. So I think adopting new technology would increase the price of the apartments since it would require a high capital investment. But, at the same time, we lack skilled workforce who would get accustomed to the new technology. However, I would say we are accepting those technologies which would be cost effective. We must keep in mind that when our cost increases, the price of our apartment increases accordingly, and thus a lot of customers would be deprived of from having an apartment of their own.

Kanika Goswami – Could you please share some technology aspects that builders in Bangladesh look for in elevators in terms of speed etc?

Alamgir Shamsul Alamin – Normally the high speed elevators are expensive, from builders point of view they prefer medium speed elevators at the same time we are also cautious about power consumption.

Kanika Goswami – As one of the leading builders in the country, do you see a future trend of tall buildings?  How do you see the elevator industry growing in the country?

Alamgir Shamsul Alamin – Present rules and regulations set by the Government of Bangladesh encourage Vertical expansion and restrict horizontal expansion. Due to the fact that the developers are required to keep 40% area as open space so there is no alternative way other than going for Vertical expansion. So, it is quite obvious that the demand for elevator will increase in the future.

Covered By : Mohammed Azrael

Real Estate Sector Of Bangladesh : A REALISTIC OVERVIEW : By Kanika Goswami

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Bangladesh being one of the most densely populated countries in the world, faces numerous problems in mitigating the basic needs of its population. Housing being one of the foremost basic needs, this density poses a severe inadequacy for the minimal affordability-segments who are mostly middle or lower income groups.

After the independence in 1971, the major influx of population had happened towards its major cities like Dhaka and Chittagong and it is continuously happening, even till today. The unemployment in the rural and sub urban towns has compelled such huge migration and finally overburdening its two major cities.

Dhaka being the capital city had become the focus of such influx and nowadays is considered to be the most densely populated cities in the whole world. There are other factors that pulled Bangladesh’s rural population towards its cities, one of them being the huge and rapid growth in the garment sector since early 80s. Until recent years there were more than 5000 Garments factories only in and around Dhaka, being a metropolis of 1528 sq. km1, employing more than 3 million workers and inadvertently invited more migrants accompanying and supporting this huge bulk of population. Further to this, the boom in the building Industry since early 90s as well allured the lower income group of the rural areas to migrate to these major cities, particularly focusing Dhaka.

There are other pull factors too which ultimately caused the city population to grow unprecedentedly. The above influx scenario clearly indicates that the majority of the population in the major two cities falls under the low income group, with a minor portion belonging to the upper or higher income group who can really afford to think of having a shelter of their own. On the other hand it is indicated that

Providing housing for Dhaka City dwellers is very significant for ensuring sustainable urban development as it is one of the largest growing mega cities in the world. High growth of population in Dhaka city is creating extra pressure on land and making an adverse impact on house rent. The high rental price of housing in Dhaka city makes it impossible for the people, especially middle income group to afford housing. It reveals that the rent paid for housing varies with income and expenditure of the tenants in different locations. The research observes that access of the middle income group people to housing is constrained by high house rent compared to their income. This observation concludes that some measures should be taken to make the housing affordable for middle income group so that they can live in Dhaka city with standard living condition.’ 2

The above excerpt though emphasizes the middle income group,  but the preamble of this article makes it explicit that considering the total population of Dhaka,  the lower income group occupies the majority in a huge magnitude whereas only a paltry 12 percent of population falls under the upper or rich segment.

The severity of the situation of such a big urban population affects every walk of city life, but it becomes a massive issue when we speak about housing.

The classifications of income group people in Bangladesh are mainly three types – higher, middle and lower income group. The sub groups are defined as low-income Taka 5,000 or less, lower middle-income Taka 5,000 – 10,000, middle income Taka 10, 000 – 25, 000, upper middle-income Taka 25, 000 – 50, 000 and high-income Taka 50, 000 or more.3

As a whole, Housing includes not only the dwelling itself but also engulfs lot of other amenities and infrastructures in its fold. A formal affordable housing is crucial for the healthy growth of a livable city otherwise the informal (so called Real Estate) sector would come up in increasing manner and would obliterate the city in longer version.  Considering the Dhaka case, it is the reality that this weight is finally taking the whole city to point of no return.

The unbearable urban population in reverse proportion with regard to the costs of Housing establishments, lack of Government initiative and incentives, scarcity of land along with unprecedented land price hike etc. makes respectable dwellings in Dhaka   a fantasy for the citizens of the middle and lower income strata. Though the government has made a few attempts at housing initiatives since independence, those were mostly for the benefit of the Government employees not for the general citizens.

Until recently, Government agencies had taken initiatives only to allot lands to the general citizens, which were again meant for the upper income segment of the city dwellers. However, the Government in its very recent endeavor has decided to construct 30,000 apartments in Uttara area and sell them in at affordable price. Though ‘affordable’ sounds compatible for the middle and lower income strata but in reality if we look into the above monthly income classification then easily can understand the fate of the intention.

Apart from the government initiatives, the boom of real estate sector had been brought by   private developers in the country. It started primarily in Dhaka city and now has been spreading sporadically over the all major districts of Bangladesh. It had begun in pre-liberation period by a local housing company, ‘Islam Group’. They had started with selling land and then making Duplex Houses in Pallabi area, then an outskirt district of Dhaka. The owner of Islam Group, Mr. Jahurul Islam is considered to be the visionary in this sector who pioneered and inspired several others after independence,  especially in the mid 80s to come up with such initiatives and helping the Dhaka citizens to have a piece of land to construct their own houses.

Apart from Land Developers there are more than a few thousand real estate companies, some   giants and some   small scale, who are now operating in Dhaka city to construct Apartments. Some of them have also extended their operations in other major cities. But the irony of fate is that again the dilemma between the costs versus target group remains same. Seldom are the efforts able to trickle down to the lower segments even the middle income group in true sense. It’s not because of their intentions of drifting bigger markups but due to the scarcity of land and its premium prices, cost of construction materials and virtually no incentives from government. As a matter of fact it is no more a hypothesis that the government must come forward to mitigate the huge dwelling demands prevailing in the city – either by themselves constructing dwellings or by providing subsidies to the private developers.

The boom in the real estate sector has given birth to several service sectors, industries relating to building industry in Bangladesh. Such humongous growth in the private real estate sector also called for international companies operating their offices locally that include the Electrical, Mechanical equipments like Substations, Generators, Elevators providers etc.

Though not formally calculated, a huge amount of financial movement is apparent in this sector which in turn playing a pivotal role in the economic development of the country and also generating a bulk of employments for the professionals and laborers.

In a nutshell the real estate sector, though not complimenting the Housing notion, being a standalone solutions are imparting the foundation of a brighter future which one day in Bangladesh surely shall be boosted by the government support.

Ar. Mustapha Khalid Palash, FIAB I Principal Architect I Vistaara Architects (Pvt.) Limited

Covered By : Mohammed Azrael