Colombo – November 17, 2021: As Sri Lanka’s thriving real estate sector attracts increasing investor interest, the Ceylon Chamber of Commerce (CCC), in partnership with Iconic Galaxy, recently hosted an immersive and comprehensive webinar titled ‘Why Sri Lanka is Becoming the Ideal Real Estate Investment Attraction’, focusing on understanding and exploring real estate investment opportunities in the country.
With reputed industry leaders in the developer, advisory and banking sectors, the webinar served as an insightful conversation that captured a 360-degree overview about whether this was the right time to invest in real estate in Sri Lanka and why.
The expert panel comprised of Iconic Developments Managing Director Rohan Parikh, Jones Lang LaSalle Head of Sri Lanka Jerry Kingsley, National Development Bank (NDB) Vice President – Branch Network Management and Product Development Zeyan Hameed, and was moderated by KPMG – Sri Lanka Senior Manager – Real Estate Advisory Division Gihani Hewavitharana.
Among the main topics discussed were the growth of the real estate sector in Sri Lanka, the benefits for Sri Lankan homeowners and the avenues and opportunities for investment.
The floor opened with Jerry Kingsley on an advisory front as he dove into the specifics of how the priorities of a typical Sri Lankan homebuyer, office space buyer and investor has changed following the COVID-19 pandemic.
“For office buyers, it was noteworthy that health and safety have become a top priority since COVID-19. Another thing that has changed is the flexibility in office spaces. Many are focusing on their office spaces’ co-working aspect and have taken steps to revitalise and ensure optimum workspace is utilised. For the average homebuyer, their home has turned into a workspace, a school or something greater. Therefore, it is important that their homes are bigger, with more amenities and smart home configuration to adjust to the technological increase in the new normal,” said Kingsley.
From an advisor’s noted that investors are looking at multi-asset classes, industrial logistics, healthcare and hotels as a part of their diversification initiative. Another eye-catching difference between developers and investors is the increased focus on sustainability. Most investors are now taking steps to integrate sustainability solutions into all their projects.
Rohan Parikh, Managing Director of Iconic Developments, stated that this post-pandemic era would be the best time to invest in Sri Lanka.
“The main reason for this is because, in Sri Lanka and Colombo, the construction cost is higher than the land price, which is usually the opposite as opposed to countries like India and Malaysia. Therefore, when we make investments in Sri Lanka, it is sure to be a safe investment because it will not be exposed to price fluctuation,” he noted.
He also noted that new concepts for adapting homes to the new realities have already started to emerge. For one, the healthfulness of a building and its shared spaces is now considered a vital amenity. More inventive designs will continue to appear and put the richness of architecture at the heart of change.
Parikh also stated that Sri Lanka is an ideal investment space because of the demand in the local market. With 70% to 80% of buyers being Sri Lankans, 25% being non-residential Sri Lankans and just 5% of condominiums being sold to foreigners, Sri Lanka’s local demand for condominium and luxury spaces has increased.
Jerry Kingsley noted that the super-luxury market might not gather as much velocity as the luxury condominium market due to the high construction costs.
“The current global pandemic has had a significant effect on the construction industry, and the challenges faced are manifold. The most obvious being delays caused to construction companies. Idling workers and escalating interest result in increased costs for the companies. Restarting sites while ensuring social distancing and other safety measures prescribed by the Government, will be time-consuming and costly, leading to an increase in costs and prices,” he said.
Looking at the banking sector, the CCC opened the floor to Zeyan Hameed of NDB. He immediately debunked the myth that people request home loans purely due to their limitation of income.
“We are often under the impression that most people request for home loans due to their lack of income, but many investors and developers are also part of our target audience. As a bank in the post-pandemic era, we are committed to giving the maximum support to consumers. Interestingly, in the past few months, the property search in Sri Lanka has gone up by 79%, which is directly proportional to the number of people who have requested home loans since. Meanwhile, 95% of the investors that we see are Sri Lankans or non-residential Sri Lankans,” he said.
Hameed also noted that the bank could also facilitate that properties are valid; the legal aspects of a purchase are also fully vetted to ensure that the consumer gets as much transparency as possible. He also explained some of the payment schemes that NDB offers to those looking to invest in and purchase home loans for residential purposes.
Overall, this could prove to be an optimal time for smart buyers as developers offer discounted prices to buyers. Those choosing the right project to invest in could see a strong return on their investment in the long run. However, picking the correct developer and project is key.
Finally, the three panelists conversed on how Colombo is a city full of promise. Sri Lanka will expand its borders from the commercial capital, which will reduce any land limitations that developers or investors might face. On an advisory level, with insights from a developer in Sri Lanka and a representative to ensure that the legal aspects of real estate investment are taken care of, the webinar established that investment in Sri Lanka is the right path to go on.
