Empower your business in Sri Lanka and internationally with Prifinance expert corporate and financial services. Streamline company formation and investment opportunities with our tailored advice and solutions.

Sri Lanka’s ‘Megapolis’ plan will help boost land prices in outskirts: Report  

Wolvert-Apartments

Dec 22, 2015 (LBO) – Sri Lanka’s Western Province ‘Megapolis’ plan will boost land prices in the suburbs and beyond in the long term, a research report said. “With the change in political power in 2015, we can now note that there is a further discussion about planning beyond Colombo to cover a Western Province ‘Megapolis’ under a dedicated Ministry,” the real-estate quarterly report – 2015 produced by the Research Intelligence Unit (RIU) said. “Therefore, in the long term, land prices in the suburbs and beyond will receive a boost from receiving the benefits of better planning in a similar way to the impact of recent city ‘beautification’ on Colombo central land prices.” the report said. According to RIU’s baseline property prices from 2012, the highest annual land price growth rates were experienced in Colombo 03 and 04 whilst Colombo 01 has remained the most expensive. Real-estate-graph “In our forecast for the next three years, RIU expects the land prices in Colombo to continue along the same trend in an environment of land scarcity amidst rapid (vertical) development,” the report said. “In the land sales market, there will be no significant difference between the price of lands used for residential and commercial purposes.” Meanwhile, the report also said that Sri Lanka’s price data on land sale registrations and advertised rates reflect several driving factors. “A defining characteristic of central Colombo (1,2,3,4,5 and 7) is the scarcity of private land sale registrations. This reflects the widespread level of state presence in this area as well as the high number of illegal dwellings.” According to the report the few private property transactions that were recorded at the land registry, the per-perch prices show tremendous variation from as low as one million rupees up to 14 million rupees. “This is due not only to the socio-economic factors but also as a consequence of various legal and regulatory issues that impact prices; for example, building permits are only granted to lands of over six perches and as a result smaller plots are much cheaper,” Perceptions also impact prices, the report said. Traditionally, lands closer to Galle Road are more expensive than lands closer to the beach due to the perception of higher crime rates along the railway line that runs parallel to the beach. However, with the ongoing initiatives led by the Urban Development Authority (UDA) to beautify Colombo, these patterns area changing, the report said. Apart from making Colombo more attractive, the UDA’s policy is to give out state owned lands to investors, both foreign and local on long leases.  
Subscribe
Notify of
guest
7 Comments
Oldest
Newest Most Voted
Inline Feedbacks
View all comments
LBR LBO
8 years ago

i will moderate this n upload

kanchana
kanchana
8 years ago

Megapolis plan is never going to be a reality…

Nirmalan Dhas
Nirmalan Dhas
8 years ago

The rise in land prices in the Western Megapolis reflects the overall strategic value of the islands geo physical location. That having been said it is important to point out that this
value is a part of the national wealth and its realization will play an important role in determining the kind of future that the islands inhabitants are able to build for themselves.

The most important requirement for the realization of this value is for property owners to become aware of the value of their properties. One of the subterfuges being employed by developers is to buy up properties well below the market price. Several landowners in
Colombo 3 have been inveigled into parting with their properties at prices ranging from 6.5 to 8 million a perch which is around half what the property is worth. The lost value becomes part of the profit of the developer and this profit is often repatriated to the country of domicile of the developer. This impoverishes the nation.

There must be a legal requirement that developers declare the nature and extent of their proposed development before engaging in attempts to purchase the land that they require from property owners.

In the absence of such legislation, developers are free to “get their foot in the door” by commencing construction on a small plot and then causing sufficient inconvenience to
property owners in the neighborhood and then approaching them through agents to buy out their properties at very low prices. I have seen how the construction of a twenty four (24) story complex is allegedly proceeding on the basis of a permit issued for a five (5) construction on an approved plan for a five (5) story car park. This modus operandi appears to be widely practiced and appears to enjoy the blessing of the authorities in charge of enforcement. We must keep in mind that it is not just the loss of the property owners that results but the impoverishment of the nation as a whole which can have significant long
term impacts such as the depreciation of currency value that we are seeing.

The acquisition of land for development projects – of which the Minister of Megapolis and Western Development has promised to unveil a hundred on the 5th of January 2016 – is not always a straightforward market transaction. Often large numbers of landowners have to simultaneously sell their properties in order to enable a developer to secure the land required for a given project. Many, if not all, of these landowners may have had no plan or intention to sell their properties. Selling an important asset like land requires much planning and care must be taken to ensure that no value is lost and the capital realized carefully invested. Landowners may need advice and guidance in managing this process.

When landowners are compelled to sell their land to benefit a developer they also lose their social capital and opportunity cost unless adequately compensated. Moreover they are much weaker in bargaining power than the developer since the developer is implementing
government development policy and hence enjoys the confidence of the government, which usually deploys the weight of the state to facilitate its policy implementation and hence the work of the developer.

This is therefore a very complex and serious situation that has to be mediated by the state through legislation setting out a clear cult formula for the compensation of landowners whose lands are required for development projects. This matter has been brought to the notice of the president, the prime minister, the minister of finance and the minister of megapolis and western development. An appeal has been made to them to suspend all development permits issued until such time as such a formula can be legislatively enacted to
protect landowners from capital loss. It remains to be seen how this complex problem with far reaching implications is resolved. Failure to address this issue can lead to disaffection towards the government and may lead to social unrest. I hope the government is willing to ensure that this problem is addressed immediately before it increases in its scope and impact as the development of the western megalopolis progresses.

expat
expat
8 years ago

too true, it is difficult to figure out if the stated price is for a perch or a square meter or what?

anyways do these people think that exorbitant land prices are good for the economy?? rubbish, it drives away the locals and brings in foreigners with hard currencies that have a better exchange rate like $$ or Euros or Pounds.

the biggest problem now in colombo is that there is no clear demarcation of business and residential areas. most areas that were residential when i was schooling are now unrecognizable commercial areas clogged with haphazard parking and whatnot.

noone seems to care as long as the palms are oiled with the required efforts. what does it matter to powers that be if a house owner’s gate is blocked by a parked car of someone visiting the shop nearby !!!

Tilak
Tilak
8 years ago
Reply to  expat

We have the Road Development Authority (RDA) in a house halfway down Manthri Place in Col-5 that is a “Private Road” – it’s rumored that house owner is or a nominee of Sajin Vaas. The road has been damaged by the RDA’s vehicles and they say they cannot repair it as it’s “a Private Road”…

Tilak
Tilak
8 years ago

Thanks for the efficient solution. Using top technology to tackle spam seems to be the best.

expat
expat
8 years ago

think ur predicament is a result of this site allowing users to comment using different social media (fb, gmail, etc.) there may not be a system to check username availability. so for example a tilak in fb and a tilak in gmail may both be able to comment and no one knowing who is who? LOL

Top
7
0
Would love your thoughts, please comment.x
()
x