Connect with us

Business

Is now a good time to invest in real estate?

Published

on

by Nayana Mawilmada, Sector Head, John Keells Properties

Real estate in central Colombo has been inaccessible to a majority of Sri Lankans for quite some time. But if there was ever a window of opportunity to consider investing, now might be it.

With interest rates in Sri Lanka lower than they have been at any point in recent memory, fixed income options have drastically reduced, while the ever dependable and safe fixed deposit has become considerably less attractive after rates plummeted. So if you want your money to continue growing – or at the very least to preserve its value – real estate may be your best bet.

Investing in real estate, however, is not without risk; and in a crowded marketplace, potential investors should carefully consider their options. An understanding of the dynamics of city evolution may help.

The Future of Colombo

Colombo is a city of approximately 560,000 (within the Colombo Municipal zone), with about half a million more people commuting into the city every day. The traffic is mind-numbing. But why do people choose to spend literally years of their lives sitting through traffic?

Colombo is the epicentre of the country; most high-paying jobs, leading schools, hospitals, and malls among other social infrastructure are concentrated in Colombo. And this will likely remain the case for the next several decades.

Unfortunately, through a combination of limited affordability, lack of innovation in mortgage lending, sky high construction costs, and inadequate policy direction, the dream of home ownership in Colombo has eluded many. And thus, many learn to live with the drudgery of the daily commute.

While revamped public transport and infrastructure could change this picture drastically, that is still quite a way away from becoming a reality. What is almost certain in any eventuality is that Colombo prices will continue to rise – and if you have a bit of money to invest and get started, you can profit from it.

Even in the midst of a pandemic, the fundamental socio economic forces driving people to hover around Colombo will not change that fast. Cities provide economies of scale that make it easier to access (or distribute) resources and services.

 

The Mortgage Solution

Mortgages give people access, choice, and the ability to afford convenience. It is, therefore, vital that the housing finance industry begins to innovate.

At John Keells Properties, we have been focused on mortgages for a while now as a means to complement our offering at TRI-ZEN—the cutting-edge apartment community we are developing on Union Place. Our most recent innovation—the Freedom Mortgage—aims to give homebuyers and investors some breathing space and flexibility.

The Freedom Mortgage plan essentially ensures customers a two-year interest free period on their mortgage, with the customer paying 20% up front and the bank taking up the remaining 80%. Once that initial payment is made customers don’t need to make another payment for a further two years. After two years, interest payments begin, and capital repayments start three years after that. Interest rates are locked in at 8.75% for five years, or nine percent for 10 years with the Commercial Bank. Of course, selling the apartment and capturing gains on the full value still remains an option during this entire period.

 

When investing, location and timing are key

Humanity will survive the pandemic; and so will Colombo. While we may see a temporary slump in rental demand due to the pandemic and an exodus of expats, we will undoubtedly see that bounce back as well.

It’s important to keep an eye out for opportunities. Yes, interest rates are muted and FDs and other fixed income instruments available today will barely keep you above inflation, but at the same time mortgage costs are also low and banks are under pressure to lend, so you can get good deals on housing mortgages.

When property hunting in Colombo, proximity to the core (Colombo-1 and two), combined with the neighbourhood context, would be important in ensuring convenience and rentability. Picking a developer with the track record and strength to survive a downturn is also crucial, particularly if you consider a property that is under construction. Finding the right product match for your wallet and lifestyle is critical too.

Ultimately, if you pick the right real estate product in the right location, and have the discipline to look medium term and ride out the current turmoil, you will likely do very well.



Continue Reading
Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

Business

MN Group becomes the Best Business of the Year at Pinnacals Awards

Published

on

The MN Group won the Best Business of the Year Award at the Pinnacals Sri Lanka award ceremony at the Waters Edge Hotel, Battaramulla. Managing Director of MN Group of Companies (www.mngroup.lk), Roshan Wewage accepted the award on behalf of the organization. MN Group of Companies has previously won many awards including Lanka Business Awards (LBA) and Shramabimani.

Customers can obtain any construction related service from MN Group at a reasonable price. The company is also willing to finish half completed houses and commercial buildings at agreeable terms. MN Group understands that the tough economic circumstances have placed great pressure on the people and the company is committed to understanding their needs and to provide a warm and professional service. Roshan Wewage invited those who need to renovate their buildings to reach out to them.

Continue Reading

Business

Dilmah Adjudged Best Corporate Citizen for the Third Consecutive Year

Published

on

Dilmah was awarded ‘Best Corporate Citizen Sustainability’ in the category of Businesses with Less than Rs. 15 Billion Annual Turnover, for the third consecutive year at the Best Corporate Citizen Sustainability (BCCS) Awards organized by the Ceylon Chamber of Commerce; recognizing that Dilmah has successfully achieved a sustainable balance between social, environmental, and economic performanc, a company news release said.

Evaluated by an independent & expert panel of judges, the awards are Sri Lanka’s most prestigious, scrutinizing and recognizing ethical and sustainable businesses. Dilmah was honoured as one of ten ‘Best Corporate Citizens’ of Sri Lanka, won the Award in the Environment Beyond Business Category, and was lauded for continuous commitment to the environment surpassing the realms of business.

“The annual BCCS Awards is the premier corporate citizenship award, highlights sustainability champions in the national corporate arena. The awards promote corporate citizen sustainability ownership and initiatives that deliver social and environmental benefits while pursuing profits. This recognition validates Dilmah’s emphasis on delivering social and environmental impact by sharing earnings through the work of the MJF Charitable Foundation and Dilmah Conservation,” the release said.

“In 1988, Merrill J. Fernando founded Dilmah, a family business, to serve humanity with kindness to people and nature, while sharing his passion for taste and goodness in tea. Over the years Dilmah has delivered over Rs. 7 billion for humanitarian benefit through the work of its charitable arm MJF Foundation and environmental arm Dilmah Conservation.

“Ensuring economic, social, and environmental sustainability exists at the heart of its operations and is integrated to every operational aspect of the business, Dilmah’s purpose is further extended through the work of the Merrill J. Fernando Charitable Foundation (MJF Foundation) and Dilmah Conservation (DC) by driving life-impacting initiatives.

“The MJF Foundation works directly with estate workers and underprivileged communities to uplift lives and empower them to pay-it-forward to their communities. Some of its core initiatives are the countrywide MJF centres, small-medium enterprises with over 2,000 small entrepreneurs, ‘Empower’ Culinary & Hospitality School, and ‘disABILITY’ teletherapy app.

“The sustainable development of people goes hand-in-hand with the planet. Dilmah Tea is a carbon neutral product manufactured at a carbon neutral facility. Further, Dilmah has pledged to achieve zero-emissions for its manufacturing process by 2030 through science-based targets. Dilmah Conservation functions under three main categories: environmental sustainability, biodiversity conservation, and education and awareness. As such, Dilmah Conservation initiatives range from butterfly to elephant conservation, climate research, adaptation and mitigation, rewilding tea gardens, conserving mangrove forests, and promoting nature-based entrepreneurship through seaweed cultivation and empowering agro-entrepreneurs.”

Winning the Best Corporate Citizen Sustainability Award 2022 is considered a top honour in the Sri Lankan corporate field. Each year, submissions are evaluated by an eminent panel of local experts, thought leaders, and academics. Dilmah considers receiving the Best Corporate Citizen Sustainability Award 2022 an important milestone in its journey as a truly sustainable brand with a purpose beyond profit.

Across the shores, Dilmah has been recognized for its attempt to take Ayurvedic wellness and goodness to the world with the help of tea. The Arana Range of Herbal Infusion Teas was voted the Product of the Year 2022 in Australia. Meanwhile, Dilmah on its 7th Consecutive Year was awarded Most Trusted Brand in New Zealand in 2022.

Continue Reading

Business

DSI Tyres bags two awards at SLIM Brand Excellence 2022

Published

on

Sri Lanka’s premium tyre brand, DSI Tyres won two prestigious awards at the SLIM Brand Excellence Awards 2022, held recently in Colombo. DSI Tyres, who has already made a mark in the international markets too, won the Silver Award under the Product Brand of the Year category and the Bronze Award under the Local Brand of the Year category. These mark another important milestone in the company’s journey spanning three decades. DSI Tyres has also remained within the top three brands in Sri Lanka for three consecutive years, a significant achievement in a very competitive arena.

DSI Tyres’ role as a leading local tyre manufacturing company that continues to promote its brand in an eco-friendly manner through the use of state-of-the-art technology and continuous research and development which enables them to identify customer needs in a timely manner is the key reason behind its continuous achievements. DSI Tyres has been able to place its products optimally among the local and international customers using the latest marketing strategies. The company also places great emphasis on sustainability and has been able to expand its local and international market share maintaining continuous customer loyalty even at the most difficult periods. DSI tyres are becoming increasingly popular in the online sphere as well, due to the facilitation of online orders at the convenience of customers as well as the use of attractive digital marketing. “DSI Tyres has a special place in the people’s hearts.

We have won the people’s trust and it is the highest award we can receive. It is a great privilege for us to receive these awards, which a mark of appreciation for the work we do to maintain customer loyalty,” Managing Director of DSI Tyres Kavinda Rajapaksa said. SLIM Brand Excellence Awards is the Sri Lanka’s premier celebration of Sri Lankan brands that rewards the outstanding efforts of marketers. This gala event for this year was held at Grand Monarch Hotel, Colombo. The Chairman of DSI Tyres, Ranatunga Rajapaksa received the two awards on behalf of the company. Previously, DSI Tyres had won SLIM Turnaround Brand of the Year, Product Brand of the Year, Local Brand of the Year and many SLIM DIGIs awards.

Continue Reading

Trending