- $ 500 m investment expected in first stage of Shang Properties venture
- Six-acre site in Colombo 2 under UDA rented on 99-year lease
- Project initially floated in 2017 but delayed; first Cabinet meeting of new Govt. gives approval
By Uditha Jayasinghe
The Government has granted approval for a $ 900 million mixed development project to be built in Colombo on six acres of land held by the Urban Development Authority (UDA), with the involvement of Shang Properties Ltd., a top official has said.
State Minister for Investment Promotion Keheliya Rambukwella said that the project will initially invest $ 500 million under the first stage with plans to expand the project to $ 900 million. It will contain apartments and office space and is expected to be completed in six years.
“The very first Cabinet meeting held after the Government was formed gave approval for this project. We are now in discussions to define the concessions and we expect the project to start as soon as possible,” Minister Rambukwella told the Daily FT.
The investment was initially discussed in 2017, according to the Board of Investment, and an agreement was signed the subsequent year.
The agreement was signed with Shang Properties Ltd., a joint venture of Kerry Properties Ltd. listed in Hong Kong and Shang Properties Inc. of the Philippines, which signed a 99-year land lease agreement with the Urban Development Authority (UDA), which at the time was under the Megapolis and Western Development Ministry for the land parcel in Colombo 2.
The company was selected by the BOI after it responded to a tender call by the former Government for the six acres of land near the Beira Lake at the heart of Colombo. At the time, the company was said to have acquired the site for a consideration of Rs. 12.8 billion excluding taxes. The site is located at Sir James Peiris Mawatha in Colombo 2.
The company planned to build a modern mixed-use development on this site but the project was delayed after tax and other concessions granted for BOI projects and expected by the company failed to materialise. The delayed project was then given the go-ahead by the new administration, which has placed the BOI under President Gotabaya Rajapaksa.
“In view of the keen demand for premium property developments in prime locations in Sri Lanka, the company has full confidence in the potential of this project. Leveraging on the exceptional quality promise that Kerry Properties and Shang Properties constantly bring to many prestigious locations in Asia, the company looks forward to creating an ultimate living and business space in the Beira Lake area,” the company said when it signed the agreement in 2018.
The Kuok Group’s other investments in Sri Lanka include a development comprising the Shangri-La Hotel, which opened in November 2017, as well as luxury apartments, and a high-end shopping mall One Galle Face (OGF) that opened last year. The Group also operates a golf resort in Hambantota.