Opinion: Are apartment developers moving to suburbs?
LankaPropertyWeb’s (LPW)
With
Colombo city turning into a business hub more than a
residential area, recent studies of LankaPropertyWeb (LPW) show that apartment
developers are now exploring the suburbs to cater to the growing interest for
vertical living amongst the locals. The numerous developments taking place in
the main city resulting in diminishing space amongst houses for rent in Colombo and reducing demand
for houses for sale in Colombo has in fact
contributed to this interest largely.
The
rising population in the country and the changing lifestyles of people has also
further influenced the number of apartments for rent and condominium
construction taking place in the city. However, over the years such
constructions taking place within the inner city of Colombo (i.e. Colombo
1-15), has continued to decrease in number.
Condominium projects from
2014 – 2019
According to the data
gathered by the Condominium Management Authority (CMA), from
2014 to 2016 there is an increase in condominiums in Colombo. But from 2017
onwards an obvious reduction is seen. Apartment constructions in the other
districts are following a downward slope as well. However, in the greater
Colombo areas like Sri Jayawardena Pura Kotte, Mount Lavinia, Rajagiriya, etc.
that exclude Colombo 1-15, a continuous rise in complex constructions has been
witnessed.
Commenting
on this Daham Gunaratna, Managing Director of LankaPropertyWeb says “The
main reason developers are moving out of Colombo could be the cost of
construction in Colombo (mainly driven by high land value) and thus the price
of apartments going up.”
The
opening of Sethsiripaya in Battaramulla by the former President Mahinda
Rajapaksha in 2012, brought about plans to shift government offices into the
administrative hub of Sri Jayawardenapura Kotte while leaving Colombo city for
business affairs. As a result, now the 13 story building houses the Ministry of
Transport and Civil Aviation, Ministry of Housing, Construction and Cultural Affairs,
Ministry of Higher Education and Highways, etc. This has brought numerous
improvements in terms of administration and service to the public.
Many
development projects have also been directed towards uplifting the standard and
infrastructure in the greater Colombo areas and the Western region on the
whole. Introduction of the Western Region Master Plan 2030 that includes the
construction of the Light Rail Transit system from Malabe to Fort with 16
stations, the Tech City Development Project directed in Malabe, Athurugiriya,
Kaduwela and Homagama areas, creation of the Airport Business City, the BIA
Gateway Project are some constructions expected to take place within the next
ten years.
The
Kottawa – Makumbura Multi-Modal Transport Hub which was opened in April of this
year to the public, is one other development project that was taken up to
improve the transport system in the greater Colombo areas.
Price changes in land in the
greater Colombo areas 2018 – 2019
Based on the data of CMA on land price changes, over the quarters of the past year and this year, the changes in land prices are higher in the greater Colombo areas of Nawala, Kalubowila, Dehiwala, and Rajagiriya. Meanwhile, there is an evident hike in land for sale in Colombo 3, given the many developments taking place. However, the prices of the other areas of Colombo aren’t rising as high as the greater Colombo areas.
Comparing
this rise in land prices in greater Colombo with the increasing condominium
constructions in these areas, the interest of condominium developers is
justified quite obviously.
Floor area in condominiums from 2014 -2019
