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King of the Commercial Hill

  • Published at 12:15 am February 4th, 2020
bproperty issue 16

Halishahar’s average commercial property rent — Tk33 — is one of the lowest per square feet rates in all of Chittagong

From a geographical standpoint, there are only a few places in the world that are better located than Chittagong to function as a commercial hub. The seaport next to the city is the lifeblood by which Chittagong has held its status as one of the most valuable locations in the region. Within the city, it is Agrabad that has long been considered the top location for business — both by locals and outsiders. And why not?

Agrabad is right next to the port from where almost all commercial activities originate. It deserves all the recognition and value people give it. However, commercial real estate is not solely thriving in Agrabad — the city has a few other areas that are playing major roles in bolstering the commercial capabilities of the city.

Shops galore

More often than not, people focus on the presence of industrial and financial properties when trying to determine the commercial value of a particular area. Even though such properties are excellent indicators of commercial activities for an area, shops are also great contributing factors to the area’s overall economic development. However, unless the shops are located in a shopping mall or bazar, their contribution is often overlooked by the general people. Right now, three particular locales in Chittagong are seeing a high availability of shops – Mohara, East Bakalia and Halishahar. Except for Halishahar, the other two areas are already heavily industrialized and all three are located next to the Karnaphuli River.

Mohara, in particular, has seen a great increase in this type of property ever since the anti-encroachment drive began in early 2019. The drive, which saw the removal of over 200 structures, has rejuvenated people’s interest in the area.

For Bakalia, it is not removal or destruction that is attracting people — rather, it is construction. To be more precise, construction of the Bakalia Access Road, which will connect Sirajuddoula Road to the Shah Amanat Bridge, the third one over Karnaphuli River, via Bakalia, is in its final stretch after getting delayed late last year.

Whereas Mohara and Bakalia are industrial locations, Halishahar is almost entirely residential. The area as a whole is quite dynamic. But within it, the 39th ward of South Halishahar is on its way to becoming a hot zone for commercial purposes. In terms of availability of shops, Bproperty currently lists around 28 such properties, most of which are available for sale though.

In contrast, the bulk of the shops available in Mohara and Bakalia are for rent, with 98% of them being in Bakalia. That is certainly interesting, considering the difference between the average square feet price of shops in South Agrabad and South Halishahar is only about 12% with the latter being lower.

Residential to commercial

When Agrabad was first incorporated into Chittagong city after the partition, the idea was to develop the area into a residential zone — which was subsequently done by the Chittagong Development Authority (CDA) in the 1960s. However, that was not for long. When Chittagong’s development properly ensued, port adjacent areas saw an increase in commercial properties, turning residential areas into economic ones. A large section within the Double Mooring ward was a part of that transformation and has led to the creation of the Agrabad Commercial Area.

However, the wave of commercial transformation has not stopped there and is not unique to Chittagong. Dhaka, the country’s other significant hub, is very familiar with this. Gulshan and Banani have become financial centres of the country while in more recent times, Bashundhara Residential area is on the path of rapid commercial development.

Similarly, the number of commercial properties in Khulshi of Chittagong is on the rise. According to the Bproperty database, of all the properties available in Khulshi at the moment, commercial properties account for about 11%. The price and rent of commercial space is also quite high now with the average square feet rent being Tk88.

Similar to Khulshi, Halishahar is also seeing an increase in commercial properties. The area has a lot of things going for it at the moment. Nestled between the Karnaphuli River and the Bay of Bengal, residents and businesses in the area have better access to almost all parts of the port city.

The promising Anandabazar coastal area is seeing the development of the bay terminal on about 1,000 acres of land, which will be a big draw for the area. Halishahar has a good mix of offices and shops available, and the rent is also quite low. In fact, its average commercial property rent — Tk33 — is one of the lowest per square feet rates in the entire city. This, though, is surprising for one reason.

The area is still viewed as “residential” and not commercial. The scope is there, waiting to be utilized, and the demand is also on the rise but yet to achieve a breakthrough. The same can be said of Khulshi. However, unlike Halishahar, Khulshi has been considered a premier location for some time — hence, the higher cost of properties.

Up and comers

Chittagong has been referred to as the “commercial capital” since 1991. While the development of the city has not always kept pace with the sentiment, it has been growing in recent years. A number of localities in the area have been developing their commercial prowess in terms of real estate. As a result, the up and coming entrepreneurs of the city do not have to rely solely on the Agrabad Commercial Area.

One of those areas is the Bagmoniram ward. The commercial landscape there is on the rise, particularly in Bayazid Bostami Road, CDA Avenue and OR Nizam Road. About 18% of the total properties that has recently become available throughout this ward were commercial. This is a promising sign that the Bagmoniram ward is on the verge a commercial boom. The area’s next door neighbour — Muradpur — is also seeing a similar transformation, but at an even higher growth. An unprecedented 25% of the recently available properties in this area are commercial.

Still the king

Even with all the recent progress in different parts of Chittagong, Agrabad, and Double Mooring as a whole, is still quite ahead of the rest of the pack. Most of the major corporations are still vying to be a part of the Agrabad scene. That is why of all the commercial properties available for rent or buy in Double Mooring, about 92% are offices and open floors. A bulk of the offices available is located in Sheikh Mujib Road, Agrabad Access Road and Commerce College Road.

While these three roads are almost next to each other, the average square feet rent of offices is quite apart. According to the Bproperty database, offices in the Commerce College Road cost the most with the average square feet rent being Tk68 — which is even higher than the averages in Dhaka’s Mirpur and Mohammadpur areas. Surprisingly, the area in Double Mooring with the most offices available has the lowest average rent — Tk48.

This is a great opportunity for organizations that are looking to find a place in the Agrabad area, but have a limited budget. For an area that is often compared with Gulshan, such an opportune time to invest in commercial real estate can truly result in great things. And, if the progress of the rest of the area is any indication, Chittagong is on the verge of attaining a new level in commercial and industrial development with Agrabad at its centre.