Why Bangladesh?
In our view, Bangladesh presents the greatest investment opportunities in all of Asia. The country has experienced one of the highest growth rates in Asia by almost every measure, the pandemic notwithstanding. There is an educated, young, English-speaking workforce, low labor costs, and large domestic consumer base and yet country is woefully underserved in all real estate and infrastructure services. Demand is high for housing, office space, retail centers and hotels, but supply is low. Similar to India thirty years ago, we see Bangladesh in the next two decades evolving into a center for export manufacturing beyond the garment industry with a robust internal market as well.
Impact Investing
Our commitment to sustainability also means a commitment to positive impact investing, whether in the addition of subsidized worker housing, better factory workspace, and reduced carbon footprint as components of new development projects.
Our commitment to sustainability is not just the right approach ethically—it is also good business. In a world where sustainability has become an important aspect of international investment in real estate and infrastructure, the components of sustainability become an important selling point:
Investor Demand: There is increased investor demand on a global basis for real estate subject to ESG standards (Environmental, Social and Governance). Capital will follow this demand.
Tenant, Operator and End-User Demand: There is an increase, especially among tenants from the G07 countries, of the need for health and social equity. Tenants are driving innovation in energy consumption. Tenants use about 40% to 60% of total energy consumption in buildings and have a vested interest in expense reduction. Tenants are also focused on waste reduction and reduced water consumption.
Sustainability Benefits
In much of the developing world, sustainability is regarded as a luxury that increases project cost without additional benefits. At Stone Road Capital, we are committed to sustainability as a strategic benefit in raising capital, and that will enhance project appeal and capital availability for our clients and investors.
There is research that the building sector contributes approximately 40 percent of carbon emissions globally and 70 percent of emissions in cities. Certainly, the situation in Dhaka, and throughout cities is south Asia is dire.