Demand rising for commercial office spaces in Sri Lanka
As business opportunities are growing day by day, the need for commercial office spaces in Sri Lanka was highlighted at a news event held recently.
“For any company wanting to set up in Sri Lanka, they would look at basic infrastructure facilities including office space options. It is well known that that office spaces/environments help attract and retain talent which is very important for any investor,” Paramount Realty CEO Nirmal De Silva told Mirror Business.
When it comes to current availability levels of commercial spaces in Colombo, he said that currently Sri Lanka has a very low vacancy level in Colombo and the suburbs. “In fact the demand is much higher than the supply. All the premier ‘A’ grade buildings are running at full occupancy. This trend is evident even in ‘B’ grade and ‘C’ grade type of buildings. In my opinion the demand for commercial/ office space over the next three to five years would be around two to three million square-feet,” he said.
A report done by JLL, an international property firm, in 2016alsohas revealed that there is an expanding gap between available space and demand in Colombo, with a shortage of grade ‘A’ office stock inputs.
Talking about from which sectors the demand will come from, he said: “The sectors that will primarily demand for office space would be the ITES sector, financial services sector, SMES and professionals. Also with possibilities of increase in foreign direct investment (FDI) to the country the demand for quality office space will continue to grow,” he said.
He further said that the demand for ‘A’ grade buildings will always be there especially for large organisations and MNCS. However, based on the demand drivers, there would be a increased focus on ‘B’ grade buildings in emerging suburbs and tier-one locations. This is mainly due to cost considerations. Therefore, he said that from a property developer’s perspective, this is definitely the area to focus on.
Meanwhile, sharing some of the trends that are seen in the commercial real estate space, he said that there is an increasing trend towards flexible workspaces. Companies are now pro-actively looking at serviced offices and co-working spaces due to its flexibility. Additionally due to the traffic congestion and the cost of commuting most companies are looking for office spaces in locations that are convenient for their employees to commute, he said.
This was shared on the side lines of a media briefing held to announce Asia property awards, as Sri Lanka will be the latest country to host this event. Last year the event took place in Singapore.
The reason cited to choose Sri Lanka to host this event was the size of the market and the rapidly growing real estate sector. In last year’s event nine Sri Lankan developers had taken part and in this year they expect the number to be 25.
From 13 competition categories in 2017, the new edition of the awards will present more than 20 residential, commercial, design and developer awards, including in Colombo, South Sri Lanka and North East Sri Lanka.
The event’s gold sponsor will be JLL Sri Lanka, the country’s leading professional real estate service firm.
The Propertyguru Asia Property Awards is a leading industry awards programme rewarding only the region’s finest real estate.
Celebrating its 13th year, the series now covers 17 markets across Asia.