Nov 12, 2015 (LBO) – Sri Lanka’s real estate market’s full potential needs to be tapped through big investments funds which can pave the way for the island to join its regional counterparts, a property developer said.
“The big real estate investment funds and investors have not come to Sri Lanka yet and some of them haven’t even heard of us yet,” Kishore Reddy, managing director, Platinum1said.
“They are yet to tap our market, but when this happens only then will Sri Lanka’s real potential in the sector will be seen.
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This is why Sri Lanka’s real estate market has not seen the boom that other regional markets have seen in the recent past, he said. “We need to create new marketing tools to attract the big investors and the funds.”
Sri Lanka is only catering to a small market, Reddy says adding he sees a lot of room for the market to grow.
“With tourism picking up this is another market that can be tapped.”
Colombo’s real estate market still mainly focuses on residential properties in the upper-income and premium sectors as the country is heading towards upper middle income status which is backed by low mortgage rates, better pay and bonuses, and optimism about the islands economic future.
Data estimates that upto 80 percent of real estate sector investments are by large firms and are concentrated around high-end apartment developments. Buyers are typically Sri Lankan returnees living overseas, retirees, individual investors and Sri Lankan expatriates.
Analysts say that however there are is a new market space opening up around this core to serve institutional investors, real estate firms and Real Estate Investment Trusts (REITs).
Reddy adds that Sri Lanka is one of the best countries to live in compared to other South Asian countries as our pollution levels are very low and Gross Domestic Product and per capita income is also higher than most countries in the region.
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He also said that when comparing market prices in the region’s main cities, Sri Lanka is cheaper and that there is potential to grow further.
Especially if people start buying apartments he said then we will see the local market growing.
“With the long war over there is no reason why there would be no demand for apartments in the future.”
Reddy's firm Platinum1 is a real estate venture by Platinum Realty Investments, a BOI registered Sri Lankan company with more than 30 million US dollar of capital investment from Sri Lankan investors and Foreign Direct Investments from Paharpur Mauritius Ltd, a fully owned subsidiary of the Paharpur Cooling Towers and Pragnya Fund, a Mauritius Based Equity Fund.
The apartments are a 20 storey complex located at Colombo 03, comprising 66 apartments plus 4 penthouses with facilities such as a swimming pool, gym, spa and restaurant.
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But who would buy apartments on top of an old delapitated building.