International perspective of the Sri Lankan real estate market
View(s):Aside from noticeable evidence, the growth of the economy, specifically the real estate and tourism sectors in Sri Lanka, have been repeatedly publicised over the post-war period. Yet, how do international investors perceive it?
According to a media release by real estate promoter Lamudi Lanka Ltd, Neluka De Alwis, Head of Sales and Marketing of Shangri-La Hotels Lanka (Private) Ltd said: “Since the end of the civil war in mid-2009, the country’s economy has been on a steady growth by determined rebuilding measures, surging tourism and increased investor confidence.”
The mixed development, One Galle Face by Shangri-La, is to embrace residential towers, commercial spaces and a hotel with all the facilities in one spot. It offers apartments with up to four bedrooms, 16 penthouses, swimming pools, mini theatre, recreational facilities and a parking facility that can accommodate up to 700 vehicles.
As per the statistics from the Board of Investment states that foreign direct investments have been rising over the past couple of years. As of 2014, Sri Lanka reported FDI’s worth around Rs. 1.6 billion.
Lately, the government has focused its attention towards revamping the city of Colombo, not to mention the country. “Major infrastructure development remained in the forefront of the government’s investment drive in the recent years,” she was quoted as saying. Improvements of the roads, incorporation of expressways to major cities such as Galle, Hambantota and currently Kandy and better technological facilities are underway at present.
These infrastructural developments occurring all around the nation enclose the potential to create better investment opportunities in other growing cities such as Gampaha, Kandy and Galle. When asked about the outlook for the local property market in the next couple of years, Ms. De Alwis said: “Low interest rates and moderate levels of inflation will boost trade and industry in the medium term.”
She further added: “With several local and domestic investors looking to capitalise on a promising economic growth environment and improving infrastructure, real estate has witnessed an upward trend in demand and pricing. The recent upswing in the service sector from finance, tourism, and the IT/ITES industry in Colombo, has triggered a healthy demand for residential space in the Greater Colombo real estate market. The development of premium condominium projects is most prominent in the Central Business District; and subdivided developments, row houses and villas in the peripheral suburbs have emerged as the preferred choice for middle-income buyers.”
Though international investors feel confident about the nation’s current growth and it’s near future, few barriers to entry make the destination slightly less desirable. “The restriction of apartment purchase of the fourth floor and above requires consideration on the rationale of how it could be reassessed. Another factor for improvement is the conditional on the money used for purchase as being monitored through strict exchange control regulations.”
However, positives of the market outweigh the negatives where the demand for real estate from locals and expatriates are on the rise. Therefore, the market looks quite positive in the medium term for investors and developers.