Business
Assessing the impact of the current crisis on Sri Lanka’s condominium sector
By Rohan Parikh
Sri Lanka is currently going through what appears to be a ‘once in a generation’ crisis, both economically and politically. How would this impact the country’s real estate market, particularly the market for residential condominiums?
Firstly, it’s important to understand that unlike, say, manufacturing or services, the impact on condominiums will be complex and mixed. This is because the current situation has both positive and negative implications and will impact both demand and supply.
Positive implications
First, exploring the positives, real estate and residential condominiums provide investors a buffer to protect their wealth from unpredictable and rampant inflation – which has been one of the most prominent outcomes of the current crisis in Sri Lanka. Inflation is at record levels already and by all indications will remain high in the immediate term.
Since real estate is a long-term asset class, nominal values of properties generally rise to match inflation, ensuring that the investor gains in real terms. Hence, real estate assets like residential condominiums represent a safe and long-term store of value, which can offset the impact of inflation and can be sold profitably, once normalcy returns.
This is in sharp contrast especially with financial assets classes such as stocks and bonds that carry high levels of risk and can be very volatile during a macro economic crisis like the one we are experiencing currently. Hence, real estate can perform far better in protecting your wealth, compared with typical alternatives like cash or savings accounts, that could lose value substantially and rapidly due to inflation.
Overall, real estate represents a tangible and solid asset that can provide security and stability to investors at a time when the value of items and the stability of companies and industries are in flux.
Negative implications
However, the current crisis can also negatively impact the real estate market.
There is a strong likelihood of a shortage of apartments in the medium term as new projects are cancelled or postponed due to the uncertainty regarding the cost of inputs and availability of necessary imports. Buyers could rush to purchase the existing condominiums available in the market, reducing the availability for other buyers.
Such shortages may also result in prices of condominiums increasing rapidly – which is however likely to benefit buyers who get in early. Funding such new investments could however be challenging, given especially the rapid increase in interest rates.
Real estate developers and companies will also face significant constraints and challenges due to the inability to start new projects, as they would be uncertain of the prices of inputs. Hence, it will be difficult for developers to price apartments accurately. As projects are put on hold, employees in the sector could either face job losses or companies will have to contend with high overheads.
Need for additional caution
Low-quality developers who have invested in projects with low feasibility and who have heavy levels of borrowings are likely to be impacted far more than prudent, high-quality developers, given the above situation. Hence, buyers of residential condominiums need to take extra care to assess the feasibility of their developer, ensuring that they select only reputed developers with a strong track record.
The quality of future construction projects could also be compromised as imports will remain restricted in the medium term, leading to difficulty in procuring key components like kitchens, appliances, etc.
There could also be a dampening impact on land prices (discounting inflationary pressure) as land purchases by developers slowdown. This can be also perceived as a positive, especially for buyers but will negatively impact sellers.
Weighing the positives and negatives, overall, real estate and residential condominiums are likely to remain an attractive investment class in Sri Lanka. Long-term fundamentals remain relevant, especially considering that Sri Lanka has low levels of urbanisation and that vertical living clearly provides the only viable solution. Projects with sound business fundamentals, formulated by high-quality developers and which are aligned closely with market needs, will continue to be attractive investments.
(The writer is the Chairperson of Iconic Developments and an alumnus of the Wharton School of Business and INSEAD.)
Gigalingua Lanka, a premier German language institute, officially launched in Colombo with a ribbon-cutting ceremony attended by distinguished guests, including Dr. Felix Neumann, German ambassador to Sri Lanka. This marks a significant milestone for Sri Lankan professionals, especially nurses, looking to expand their careers in Germany’s thriving healthcare sector.
In collaboration with its strategic partner Global Care Solutions (Pvt) Ltd – a renowned company in the foreign recruitment industry – Gigalingua Lanka offers a unique pathway for Sri Lankan nurses and apprentices to master the German language and pursue rewarding career opportunities in Germany.
Dr. Felix Neumann, the Chief Guest at the event, expressed his support for the initiative, emphasizing the importance of language education as a bridge to global career prospects. In his speech, Dr. Neumann noted, “German language is not only a means of communication, it is a gateway to global career opportunities.” He commended Gigalingua Lanka for providing valuable opportunities for Sri Lankans and addressing the critical demand for skilled workers, especially in the nursing sector in Germany.
Gigalingua Lanka is the first private institute in Sri Lanka to offer comprehensive German language training up to the B2 level, and conduct TELC exam. The institution also provides language training for apprentices, allowing them to undertake the Apprenticeship Program and contribute to the growing labor market in Germany. The collaboration between Gigalingua Lanka and Global Care Solutions is designed to meet Germany’s growing need for skilled workers, particularly in the healthcare sector.
The event was attended by a number of prominent figures, including Dr. Felix Neumann , Arthur Senanayake (chairman of IWS Holdings), Eran Wickramaratne – former MP, Chandra Schaffter – ( Founder of Janashakthi Insurance ), Dhammika Attygalle (Director Upali Group of Companies and President Automobile Association of Ceylon) Former Wing Commander Buwaneka Abeysuriya (Ex- chairman Janatha Estates Development Board).
Chairman of Global Care Solutions, Thomas Michael Kriwat, who is also chairman of the Mercmarine Group of Companies in Germany, highlighted the significance of the new training center. He said, “We are bringing world-class German occupational language training to Colombo, offering a structured, career-focused pathway for Sri Lankan professionals. By introducing TELC (The European Language Certificates) as an officially certified German language test authority, we are increasing accessibility for students seeking internationally recognized qualifications.”
At the thanksgiving speech, Dr. Rajan Sara, Managing Director of Global Care Solutions and Director of Gigalingua Lanka, outlined the critical need for foreign nurses in Germany. “Germany is facing a significant shortage of nurses, estimated to need an additional 150,000 by 2025. This is exacerbated by an aging population and increasing healthcare demands. Over 47,000 vacancies in the healthcare sector remain unfilled, making it an ideal time for Sri Lankan nurses to seize this opportunity,” Dr. Sara explained. (Gigalingua Lanka)
In keeping with its vision to consistently evolve and address accelerated business growth needs, Brown & Company PLC recently unveiled its new state-of-the-art manufacturing and warehouse facility in Katunayake. Strategically located within minutes of the Bandaranaike International Airport and the nation’s rapidly evolving highway network, the space is positioned to significantly enhance Browns’ logistical capabilities. The hub will enable seamless access to key markets across the island, further solidifying the Company’s principal role in a cross-section of industries.
The inaugural event of the Browns Group Industrial Park was attended by Ishara Nanayakkara, Chairman, Brown & Company PLC and Deputy Chairman, LOLC Holdings PLC and Kapila Jayawardene, Group Managing Director/CEO, LOLC Holdings PLC along with key officials from the Browns and LOLC Group.
Dialog Axiata PLC, Sri Lanka’s #1 connectivity provider, has successfully launched the highly anticipated vivo V50 smartphone, marking a significant milestone in its commitment to bringing 5G technology and pro-level mobile experiences to Sri Lankan customers, with the first customer handover taking place on 27th March 2025.
The vivo V50, designed in collaboration with ZEISS, combines advanced features such as a 50MP ZEISS OIS Main Camera, a powerful Snapdragon® 7 Gen 3 processor, and a stunning 6,000mAh battery, all housed in a sleek, ultra-slim design. Available at an attractive price, the vivo V50 delivers unmatched mobile performance for work, play, and creativity, offering features such as AI-enhanced photography, 4K video recording, and lightning-fast 90W FlashCharge technology. The vivo V50 also boasts a 41° golden curvature for a comfortable grip and a premium, cinematic mobile experience.
Dialog’s partnership with vivo underscores its commitment to bringing the latest in 5G innovation to Sri Lanka, providing customers with access to next-generation mobile experiences and empowering them to capture, create, and connect like never before. The vivo V50 is now available for purchase at Dialog’s Experience Centers and via https://www.dialog.lk/phones/vivo-v50-5g-12gb.
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