Colombo bourse to create avenues for real estate investors
The Colombo stock market provides many opportunities to investors to buy real estate through Sri Lanka’s capital market.
Panel discussion at the forum; Panellists were Sunil Subramanian of JLL,Thilan Wijesinghe (Chairman, TWCorp), Alex Lovell (Chairman, UB Finance), Ravi Abeysuriya (Group Director, Candor), Christopher Joshua (MD, Access Engineering) and Anand Sundaram (CEO, Colombo City Centre).
Furthermore the Colombo Stock Exchange (CSE) sensing the interest shown by the Sri Lankans in such investments, is currently working on a real estate investment class to facilitate this kind of investment initiatives, improving the infrastructure to accommodate accessibility to the market.
This assurance was given by Rajiv Bandaranaike, CEO-CSE while speaking at the Lanka Property Web Investor Forum 2017 held in Colombo last week.
He said that this year they have seen a complete reverse in foreign investment (compared to earlier years) to the country adding: “We have completely outperformed the major markets and compared with the region – Mumbai, Jakarta, Vietnam, Thailand, etc – we have fared better in terms of market performances. The inflow of foreign investment this year up to now stands at Rs. 28 billion.
He said that there are strong indications that the foreigners are very upbeat on Sri Lanka and the inflows are really rising.
Richard Buultjens, CEO/MD, RB Realtors and Contractors (Pvt) Ltd, one of the organisers of the event, told the Business Times that the real estate industry has been affected by a statement from a high government official who has indicated the risk associated with the investment in the real estate industry.
He said that it is important that they overcome this constraint. “Those remarks are not necessary as they have really messed up the market,” he said, adding that they have had meetings with this particular official and requested him to try and sort things out and the only way to solve the impasse is to say something positive about the industry.
He didn’t mention the name of the official but it was the Central Bank Governor Indrajit Coomaraswamy who had told reporters earlier this year that the banking regulator was studying real estate loans to ascertain whether there is a need to rein excessive credit. The banking regulator also recently informed the International Monetary Fund (IMF) that it was considering prudent measures to limit lending to construction and real estate sectors
Mr. Buultjens said most of the developers are concentrating on the apartment market with the upper segment of the market getting a little saturated. However there is a lot more potential in the real estate market such as building villas by the seaside and in the hill-country. There is also potential for building accommodation for construction workers.
According to him a lot has to be done for the industry such as new legislation, controls and regulations.
He said a lot of things would have to done to bring in foreign investment while urging the government to develop the real estate industry in the same way that the government promotes the tourism industry.
The industry should also focus on low cost housing for the middle and lower income segments, he said while pointing out that they should aim at providing homes for those who come into Colombo from the outskirts of the capital.
There is also potential for housing at the exit points of expressways with the infrastructure development taking place in terms of building schools, hospitals banks, etc.