Real es­tate and con­struc­tion sec­tor as back­bone of SL’S econ­omy

Daily Mirror (Sri Lanka) - - CONSTRUCTION/REAL ESTATE -

As Sri Lanka sails forth to­wards un­prece­dented devel­op­ment, the real es­tate and con­struc­tion sec­tor has be­come sig­nif­i­cant as the back bone of the coun­try’s econ­omy.

As the sec­tor con­tin­ues to show­case phe­nom­e­nal growth, spec­u­la­tions con­cern­ing an un­sta­ble fu­ture have been voiced by some. Sri Lanka’s real es­tate in­dus­try is driven for­ward by a set of ex­pert play­ers that place em­pha­sis on in­no­va­tion, strat­egy and sus­tain­able growth. A quick look at the re­cent stats will prove this as the real-es­tate and con­struc­tion sec­tor have re­gained mo­men­tum with a sub­stan­tial growth of 14.9 per­cent in 2016 from 2.7 per­cent re­duc­tion in 2015. Hence it’s im­por­tant to delve deep and look at the fun­da­men­tals that are driv­ing Sri Lanka’s real es­tate mar­ket be­fore ar­riv­ing at con­clu­sions.

Hav­ing lived through Sri Lanka’s real es­tate boom right from the be­gin­ning, through the war years and the post-war boom, Blue Ocean Group Chair­mans. Thu­mi­lan­shared some of his valu­able in­sights on the fun­da­men­tally sound na­ture of the real es­tate boom in the coun­try: “As a mar­ket leader, we are quite aware of the be­havioural as­pects of the mar­ket. In a re­cent speech, Prime Min­is­ter Ranil Wick­re­mas­inghe men­tioned the scarcity of land in Colombo for real es­tate devel­op­ment. This state­ment alone is quite self­ex­plana­tory. There is a lack of sup­ply, and de­mand has far out­paced sup­ply. The mar­ket is ca­ter­ing to dis­tinct seg­ments based on the lo­ca­tion and liv­ing am­biance. It’s safe to say that there is a sup­ply short­age in all of these cat­e­gories. How­ever, it’s im­por­tant to note that the real es­tate com­pa­nies also need to en­sure their core com­pe­ten­cies to thrive in this en­vi­ron­ment.”

Thu­mi­lan points out that the sup­ply in the lux­ury mar­ket seg­ment needs to be viewed within the con­text of im­por­tant fac­tors such as the con­sis­tent flow of FDIS into the coun­try, thanks to on-go­ing so­cio-eco­nomic sta­bil­ity and eco­nomic growth. While the govern­ment is fo­cused on de­vel­op­ing the Western Prov­ince into a Me­gapo­lis by 2030, many ex­pa­tri­ates who moved out dur­ing the war years are now slowly mov­ing back to live out their re­tire­ment in their own coun­try.

“We can clearly see that the pur­chase of con­do­mini­ums in Sri Lanka by high net-worth ex­pats has seen an ex­po­nen­tial growth. It is a grow­ing trend for cit­i­zens in coun­tries such as China and the oil-rich Mid­dle East and North Africa (MENA) to im­mi­grate to other coun­tries for a health­ier and more con­ve­nient life­style. There­fore, a vast num­ber of ex­pats are look­ing to buy apart­ments for in­vest­ment, hol­i­day homes and ac­com­mo­da­tion pur­poses. Apart­ment pric­ing in Sri Lanka con­tin­ues to be at­trac­tive in com­par­i­son to prop­erty prices in Europe, Hong Kong or China. Also, we can­not for­get the vast po­ten­tial Sri Lanka has to grow as a re­gional med­i­cal and ed­u­ca­tional hub.”

Ac­cord­ing to Thu­mi­lan, the ra­tio of con­do­minium units to the pop­u­la­tion is well be­low the global av­er­age as Sri Lanka’s ur­ban­i­sa­tion rate is grossly lower than the global av­er­age and even than those of its peers. As pub­lished by World Bank in 2016, Sri-lanka’s ur­ban­iza­tion rate stood at 18.0 per­cent against the global ur­ban­iza­tion rate of 50.0 per­cent; a fact that in­di­cates tremen­dous room for growth.

“This is at­tested by the fact that we at Blue Ocean have, in the last three months alone, closed deals worth in ex­cess of eight bil­lion Ru­pees and ex­pect many more deals to be closed within the next six months. We’re a 100 per­cent Sri Lankan owned com­pany and the land on which our de­vel­op­ments are built are all pur­chased by us out­right, prior to com­mence­ment of the devel­op­ment, thus al­low­ing us to en­sure the high­est qual­ity of our end prod­uct,” says Thu­mi­lan.

Blue Ocean Group Chair­man S.thu­mi­lan

Newspapers in English

Newspapers from Sri Lanka

© PressReader. All rights reserved.