June 28, 2006 (LBO) – HDFC Bank, the island’s largest housing bank, plans to expand its core business with moves to get into property development, an equity research firm said Wednesday. Executed through a fully-owned subsidiary HDFC Real Estate Development Ltd the state-run housing bank hopes to pay for the mammoth projects by leveraging its balance sheet and pre-sales of apartments, analysts at Lanka Orix Securities said.
First off the block is a 200 million rupee condominium project in Wellawatte, Colombo 6. Built on 27 perches of land, the price tag of each of the 24 luxury apartments starts at around 12 million rupees.
HDFC has secured Board of Investment (BOI) status for the project, with profits exempted from income tax over a 5-year period.
Another 1.5 billion rupee, 300 apartment blocks will come up down Edmonton Road Colombo 5, later this year.
The bank has acquired a 1.5 acre property on a 32-year lease, which will be built in two stages.
“HDFC has a major competitive advantage in property development over its competitors. Once the provisional condominium plan is approved by the regulatory authorities, the Bank is in a position to mortgage fin