Business

Condominium developers see silver lining

Published

4 years ago

2021/11/11

Sahan Weerasooriya

Despite Covid-19

By R P A Perera

Covid-19 has had a drastic impact on Sri Lanka’s economy. That countries around the world are also reeling with the effects of the pandemic is of little consolation. It is interesting though that condominium developers with completed projects or those nearing completion with full inventory are likely to reap large benefits.

The industry which took a major hit with the Easter Sunday bomb attacks in Colombo, in April 2019, began recovering last year. RIU – a multi-sectoral research company with a global presence with offices internationally – in its Annual Real Estate Market Report 2019-2020 states that the market which remained sluggish in 2019 due to a variety of reasons, began to recover in 2020.

Providing a look into the future, CEO and Founding Director of RIU Roshan Madawala said, “We can note that the industry had performed with tenacity and resilience during the past 1 ½ years, despite the extraordinary economic challenges. Within the next 5 years, Sri Lanka could face an under-supply of apartments and other real estate assets due to a combination of variables which would essentially navigate it towards establishing a sellers’ market. This situation would have been somewhat unthinkable even 24-months back.”

“The research and data that we are analysing now suggests that the present time is exceptionally propitious for residential real estate investments,” Madawala continued. “In 2020 and 2021, low-interest rates stimulated the market to enhance the absorption rates of the prevailing stock of apartments in Colombo. Simultaneously combined with the diaspora’s interest levels gathering to an all-time high and with airports slowly reopening, the influx of buyers will be significant. The market is more appealing than ever before to persons earning greenbacks, British pounds and most other currencies, due to the weakening rupee. The amalgam of these variables and the novel reality faced by developers, whose costs have spiked due to the new import restrictions and subsequently the overall currency depreciation effect, indicates that developers will find it impossible to supply the next generation apartment projects at prices that tally with the present market. Therefore, the likelihood of an undersupply is real.”

Dr M A K Sriyalatha, Senior Lecturer, Department of Business Economics, Faculty of Management Studies & Commerce, University of Sri Jayawardenepura commenting on the effect of the import restrictions and currency devaluation on the real estate market said, “Restrictions and devaluation affect the prices of imported raw materials and it automatically affects property development such as real estate residential house prices in the short-term. But LKR priced units have become much cheaper making them more attractive to foreign investors. Real estate players with unsold or built-but-unsold inventory will benefit through the sale at higher prices.”

“What’s more, the interest rates are at a historic low, with the real interest rate being negative recently. This makes real estate investments more attractive in 2 ways, i.e. borrowing to invest is more feasible, and the returns generated are more attractive,” she added.

“Share prices and profitability of pureplay residential real estate companies providing high quality products are likely to improve over the price and profitability of commercial real estate developers, given the working-from-home concept being widely used. The larger the projects and the inventory, the higher the profit. A house of one’s own could not only be an asset but could also provide safety,” Dr. Sriyalatha said.

“We live in a VUCA (volatility, uncertainty, chaos and ambiguity) world driven by rapid technological advances that impact all aspects of human activity and markets,” RIU CEO Madawala continued. “However, real estate has traditionally proven itself as a safe haven during such times and in 2020/21, Sri Lanka’s real estate market has proven its resilience. Commercial and retail real estate will however need to navigate a more fluid and challenging environment in the short-medium term.”

Quality and trust are of paramount importance in the residential real estate sector. Naturally, established players with a good track record are at an advantage. The developers’ brand, stability and financial strength are all critical since real estate developments generally are long-term developments, (i.e., they take a few years to complete from the launch), investors therefore need to be comfortable with the stability of the developer and the ability to complete the project. Even in the current circumstances, the larger players are more likely to be able to withstand the adverse conditions due to their greater financial stability.

Industry players who have large projects which are nearing completion or where the major portion of the construction and the import of materials is already sourced or procured, are likely to enjoy significant profits and these may be reflected in their share prices.

Mr. Brahmanage Premalal, Group Chairman Prime Lands (Pvt) Ltd, commenting on the demand for condominiums said, “The demand for real estate in Sri Lanka, especially residential condominiums continued to surge throughout the year, as investors were seen rushing to take advantage of the reduction in policy interest rates announced by the CBSL as part of its monetary policy easing measures in the wake of the pandemic induced economic slowdown. Similarly, the ban on vehicle imports and the ongoing devaluation of the Rupee also appeared to be fueling the interest in real estate, which I believe, were a few of the other contributory factors that worked in favour of driving up the demand for condominiums. Further as it is with the import controls & increase of prices in raw materials the actual benefit is for the buyers as they get much higher returns. We see this phenomenon all over the world as the real investment against the inflation & high money supply is investment in real estate”.

Some industry players are also hopeful that the project developments within the Port City which are expected to commence soon will bring in a higher demand specially for the developments in Colombo and the suburbs, since the expatriates will require accommodation to overlook construction and development.

A handout prepared by the government directed at potential investors outlines various development initiatives supporting the theme, Sri Lanka is the Rising Star of Asia. Among them is the development of beachfront luxury villas at the Port City Colombo. A significant feature is that foreign investors are permitted 100% ownership of the real estate investment. Access to sites and temporary utility facilities (water and electricity) are already available while permanent utility connections are to be provided by June 2022. END.

The author is an independent writer and could be contacted on rukshicap@gmail.com for more information.

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Business

Beira Lake restoration, ‘a crucial urban environmental intervention’

Published

5 hours ago

2026/01/21

Thilina Walpola

The Beira Lake; in for a clean-up

Sri Lanka’s decision to invest Rs. 2.5 billion in restoring the heavily polluted Beira Lake marks one of the most significant urban environmental interventions in recent years, underscoring a growing recognition that ecological rehabilitation is also an economic imperative.

The multi-pronged project—covering the closure of illegal sewage discharge points, large-scale dredging, and the installation of aeration systems—is expected to not only revive aquatic life but also unlock commercial, tourism and real estate value in the heart of Colombo.

Officials say the initiative is designed to transform Beira Lake from a long-neglected liability into a productive urban asset.

A senior official from the Ministry of Environment told The Island Financial Review that untreated wastewater and illegal sewer connections had been the primary contributors to the lake’s degradation for decades. “Closing these illegal sewage points is the most critical intervention. Without that, any dredging or aeration would only offer temporary relief, the official said, adding that enforcement will be carried out in coordination with the Colombo Municipal Council (CMC) and other regulatory agencies.

From a business perspective, the clean-up is being viewed as a catalyst for urban regeneration. Urban Development Authority (UDA) sources noted that a healthier Beira Lake would significantly enhance the attractiveness of surrounding commercial developments, hospitality projects and public spaces. “Environmental remediation directly impacts land values and investor confidence. A clean, living lake changes the entire economic profile of the area, an UDA official said.

The dredging component of the project is aimed at removing decades of accumulated sludge, which has reduced water depth and contributed to foul odours and fish die-offs. According to officials involved in project planning, the dredged material will be disposed of following environmental guidelines to avoid secondary pollution risks—an issue that has undermined similar efforts in the past.

Meanwhile, the installation of modern aerators is expected to improve dissolved oxygen levels, a key requirement for sustaining fish and other aquatic organisms. “Restoring aquatic life is not just about biodiversity; it is about creating a water body that can safely support recreational activities and public engagement, a senior CMC engineer explained.

Economists point out that the Rs. 2.5 billion allocation, while substantial, should be seen against the long-term cost savings and revenue potential. Reduced public health risks, lower water treatment costs downstream, increased tourism activity and higher commercial footfall could deliver returns that far exceed the initial outlay.

By Ifham Nizam

Business

Expectation of positive Q3 corporate results jerks bourse to life

Published

5 hours ago

2026/01/21

Thilina Walpola

CSE activities kicked off on a negative note initially but later experienced some recovery yesterday because most investors were anticipating positive third quarter result shortly, market analysts said.

Amid those developments, the market indicated mixed reactions. The All Share Price Index went down by 4.13 points, while the S and P SL20 rose by 14.02 points. Turnover stood at Rs 5.17 billion with 11 crossings.

Top seven crossings were reported in Renuka Holdings where eight million shares crossed to the tune of Rs 324 million; its shares traded at Rs 40.50, Tokyo Cement one million shares crossed to the tune of Rs 113 million; its shares traded at Rs 113, Distilleries 1.85 million shares crossed for Rs 111 million; its shares traded at Rs 60, ACL Cables 500,000 shares crossed for Rs 51.5 million, its shares sold at Rs 103 Chevron Lubricants 250,000 shares crossed for Rs 47.5 million; its shares traded at Rs 190, Ambeon Capital 738600 shares crossed at Rs 40.50 each and Melstacope 150,000 shares crossed for Rs 27 million; its shares traded at Rs 180.

In the retail market top seven companies that mainly contributed to the turnover were; Colombo Dockyard Rs 1.26 billion (12 million shares traded), ACL Cables Rs 348 million (3.3 million shares traded), HNB (Non-Voting) Rs 152 million (425,000 shares traded), Hayleys Rs 109 million (507,000 shares traded), Tokyo Cement (Non-Voting) Rs 94 million (989,000 shares traded) Lanka Realty Investments Rs 80 million (1.6 million shares traded) and Sampath Bank Rs 77 million (498,000 shares traded). During the day 135 million share volumes changed hands in 38398 transactions.

It is said that manufacturing sector counters, especially Tokyo Cement and ACL Cables, performed well. Further, Colombo Dockyard became the most preferred share for investors. The Banking sector also performed well.

Browns Beach Hotels said that the company will delist from the CSE, having made arrangements with majority shareholders Melstacope and Aitken Spence Hotel Holdings to buy back shares from minority shareholders at an exit offer price of Rs 30.

Yesterday the rupee was quoted at Rs 309.75/85 to the US dollar in the spot market, from Rs 309.72/77 the previous day, having depreciated in recent weeks, dealers said, while bond yields were down.

A bond maturing on 15.05.2026 was quoted at 8.25/35 percent.

A bond maturing on 15.02.2028 was quoted at 9.00/10 percent, down from 9.05/10 percent.

A bond maturing on 15.12.2029 was quoted at 9.65/70 percent, up from 9.65/69 percent.

A bond maturing on 01.03.2030 was quoted at 9.72/75 percent, from 9.70/76 percent.

A bond maturing on 15.03.2031 was quoted at 9.95/10.00 percent, down from 10.00/10 percent.

A bond maturing on 01.10.2032 was quoted at 10.30/50 percent.

A bond maturing on 01.06.2033 was quoted at 10.72/75 percent, down from 10.70/80 percent.

A bond maturing on 15.06.2035 closed at 11.05/10 percent, down from 11.07/11 percent.

The telegraphic transfer rates for the American dollar were 306.2500 buying, 313.2500 selling; the British pound was 409.9898 buying, and 421.3080 selling, and the euro was 354.1773 buying, 365.5655 selling.

By Hiran H Senewiratne

Business

Ceylon Theatres and British Council present National Theatre Live’s ‘Hamlet’

Published

5 hours ago

2026/01/21

Thilina Walpola

Ceylon Theatres Limited, in partnership with British Council, is proud to present the first ever screening of National Theatre (NT) Live’s Hamlet starring Hiran Abeysekara in Asia. The first screening will happen at Regal Cinema in Dematagoda (Colombo 9) at 5:30 pm on Sunday, 25 January. Sri Lankan actor Hiran Abeysekera stars in the title role—the first Asian actor to play Hamlet in a National Theatre production.

For Sri Lankan audiences, this screening is both a celebration and a homecoming. It reflects the British Council’s long-standing commitment to nurturing creative talent, widening access to world-class culture, and building deep, people-to-people connections between Sri Lanka and the United Kingdom through theatre and the creative arts. To celebrate the inaugural screening, the British Council is inviting winners and runners-up of the All-Island Inter-School Shakespeare Drama Competition, alongside drama teachers and university actors, to attend the premiere.

Further details on screening dates, venues, and ticketing can be found at: https://ceylontheatres.com/ and on the British Council Instagram page https://www.instagram.com/britishcouncilsrilanka/ or call: 0766192370