Pros & Cons of Giving Your Land for Development in Bangladesh
Deciding to hand over land to a real estate developer is common in Bangladesh. Many landowners with inherited or purchased plots respond to market calls, such as “land wanted for development in Dhaka,” or post ads saying “land wanted in Dhaka,” offering their land to developers in return for built flats, cash, or a combination of both. This article explains when it makes sense to partner with a developer, the usual deal mechanics, and real-world ranges for share ratios, signing money, development time, and plot sizes – based on published examples and industry sources.
Quick primer: how a land for development deal usually works
• The landowner contributes the land (example: 3, 5, or 10 katha).
• The developer constructs a multi-story building and markets the apartments.
• The completed floor area (or the apartments) is split between the landowner and developer according to an agreed ratio (e.g., 50:50).
• Often, the landowner receives an upfront signing money (advance) whose size varies by location and land value.
When you should consider giving your land to a developer
Consider a developer partnership when:
• You want ready-made flats (no construction management on your side).
• You lack capital, time, or construction expertise.
• You prefer the developer to handle approvals (RAJUK/municipal), utilities, and marketing.
• Your land parcel is in or near growth corridors where developers actively seek sites – often advertised as land wanted in Dhaka or land wanted for development in Dhaka by firms.
Market realities: typical share ratios (what owners actually get)
There is no single standard – ratios depend on land location, deed value, expected sale price, road width, allowable FAR, and the signing money offered. However, common observed patterns are:
• 50:50 (landowner: developer) – Frequently cited in sample offers and many JDAs; common where the land value and expected sale price are balanced.
• 55:45 or 60:40 to the landowner – More favorable to the landowner when the land is in a higher-value area or when the owner negotiates higher signing money; sometimes used where the developer’s capital contribution is proportionally smaller.
• 40:60 (landowner: developer) – Appears when the landowner accepts less share because the land is in a lower-value zone, or when the developer bears most development cost and risk (or pays a large signing sum). Concrete deals vary widely and are case-specific.
Takeaway: expect 50:50 as a baseline in many public examples, but be prepared for 40:60 up to 60:40 depending on negotiation, location, and signing money.
Signing money: observed ranges & how it varies by area
Signing money (advance cash to landowner) varies enormously-some public listings and sample offers illustrate the range:
• Prime central Dhaka / Gulshan / Banani / Uttara premium plots: signing money can be very large – often in crores for multi-katha central land (examples in public deal documents show crore-level signing sums for prime commercial JV sites)
• Mid-city or suburban prime plots (e.g., Kalyanpur, Jolshiri, outer Uttara): sample classifieds and listings show tens of lakhs to crores depending on katha and road width
• Non-prime or peripheral plots (e.g., outer Savar, Ashulia, smaller residential pockets): signing money may be several lakhs to a few tens of lakhs for 3–5 katha parcels; exact numbers depend on the developer’s projected selling price per sft.
How to interpret these numbers: signing money is tied to the expected sales value of the completed flats. A higher nearby sale price → higher signing money. Never accept verbal figures – get the exact amount, payment schedule, and conditions in the JDA.
Typical development timeframes
Based on developer guides and market practice, timelines vary by project size and approvals:
• Small residential JV (3–5 katha, mid-rise building): 12–24 months from start of construction to practical completion (handovers can be longer if approvals slow).
• Larger multi-story projects (10+ katha, high-rise): 24–36+ months depending on RAJUK approvals, foundation complexity, and contractor scheduling.
• Regulatory approvals (RAJUK, utility connections) can add months – always factor approval time into the developer’s schedule.
Common plot sizes offered for joint development
Plot sizes commonly seen in JV / land-wanted listings across Dhaka and its suburbs:
• 3 katha (small inner-city plots) – typical for tight urban infill projects.
• 5 katha – a prevalent parcel size for joint development in many residential neighborhoods.
• 10 katha and above – preferred for larger, higher-density projects or commercial towers.
• 15–20 katha – often for gated developments, mixed-use or township-sized projects.
Pros & Cons recap (practical view for a landowner)
Pros:
• No construction management, quicker route to a finished asset (flat).
• Developers handle approvals, utilities, marketing, and sales.
• Potentially higher market value for professionally built units.
• Easier financing for buyers, which supports resale value.
Cons/risks:
• Ownership dilution – one plot becomes multiple owners across many flats.
• Possible lower long-term cash flow if the developer delays or the quality is poor.
• Signing money and ratio may be unfair if you don’t negotiate well.
• Tax, stamp duty, and legal implications must be checked (TDS on signing money, VAT, etc.).
Due diligence checklist before you sign (must-do)
1. Verify developer reputation: completed projects, handover punctuality, buyer reviews. Visit earlier projects in person.
2. Clear title & encumbrance check: khatian, mutation, tax receipts, no disputes.
3. Registered Joint Development Agreement (JDA): clear share formula, floor allocations, signing money schedule, delay penalties, maintenance responsibilities, and dispute resolution.
4. Payment schedule & receipts: exact timing of signing money, subsequent installments, and final unit handover.
5. Scope & quality specs: material standards, finishing level, parking allocation, amenities – fix them in written technical annexures.
6. Tax & legal obligations: clarify who pays registration, VAT, income tax implications on signing money and capital gains. Consider TDS obligations.
7. Avoid open-ended POAs: if a Power of Attorney is required, limit scope and duration; consult a lawyer.
Practical recommendation
• If you lack capital or time and prefer a finished flat or revenue share without construction headaches, partnering with a reputable developer is often sensible.
• If you can finance and manage construction yourself, and prefer full control and direct ownership, building alone may be better.
• Always negotiate: consider asking for a higher share if you can get a higher signing sum; demand clear penalties for delay; require supervised quality checks during construction.