Sri Lanka discovers an ‘apartment culture’ with good mid-term prospects

Wednesday, 7 June 2017 00:00 - - {{hitsCtrl.values.hits}}

Land prices have increased tenfold even outside the capital

By Al Gerard de la Cruz

http://www.property-report.com: Sri Lankans have grown increasingly familiar with centrally located vertical developments and are willing to overlook detached homes with gardens.

Around 2,000 apartments have been sold annually in the past several years—a feat for the Sri Lankan market, although it is relatively “a small number” compared with cities like Bangkok and Kuala Lumpur, John Keells Holdings Executive Director Krishan Balendra said at an investment forum mounted last week by the Ceylon Chamber of Commerce.

“It is debatable whether that kind of trend can continue. But over the medium term we are confident that it would even increase,” he said.

“A new apartment living culture is now being created,” he added.

Factors that play into this newfound preference include higher vehicle ownership and worsening traffic congestion. “If we go back 10 years, annually you would have seen in Colombo and the suburbs about 200 apartments being sold annually.”

While much of this growth has skewed towards metropolitan Colombo, significant price hikes have been seen in plots outside Colombo, however.

“Especially in the beach, we have seen in some instance ten-fold increases in some cases,” Balendra said. Minister of Foreign Affairs said Ravi Karunanayake, who was also in attendance at the event, revealed that the Government has not signed any agreements for the Hambantota Port projects but it is gunning for closer cooperation with China.

“Sri Lanka only has two options. One is to let the Hambantota Port continue as a loss-making venture and pay its losses and debt from the Colombo Port profits. The second is to go in for the Debt to Equity Swap option with China.”