Growing trend in young investors in condominiums

While high rise buildings and condominiums are at the peak of construction in Sri Lanka, especially in Colombo and its suburbs, there is a growing trend among young businessmen and young professionals to invest in this sector.

Mostly it's the young entrepreneurs who are very passionate about investing in new apartments and condos catering to middle sector in expectation of a good return that have taken this concept as a practice. This has become a trend and good business among the young, educated and smart professionals in the country.

The Business Times recently had a discussion with Vivek Jayasuriya, Director for Jaysons Realty, one of the young professionals in Sri Lanka who has been in the real estate trade for quite some time and has studied much about the market variations in different parts of the world. That company constructed Nuwara Eliya's Little England Cottages around two years ago.

He said, "Sri Lanka is today witnessing a massive boom in the real estate segment, not only investments made by local conglomerates but also foreign hotels and property chains that are eying the industry. The days of real estate companies competing within the local market have gone and now the time has begun to compete with world renowned multinational companies."

Looking at the market competition and purchase of apartments in Sri Lanka, most of the investors are the same customers repeatedly buying apartments from different property developers, he added.

Segmenting the local investors, he said that it's the young entrepreneurs who are keen on investing in different apartment complexes. This is practiced by many young professionals in expectation of a good return on investment, noted Mr. Jayasuriya. He also mentioned that there are various groups of people who invest in apartments at different stages of the project. People buy apartments during the marketing campaign, during the ground breaking ceremony, during the construction of the property and after the project is completed. Depending on the risk involved and the stability of the property developer in the country, people invest. A condominium begins construction only after 40-50 per cent of sales are done, added Mr. Jayasuriya.

"Look at countries like the Philippines, Cambodia, Thailand and Indonesia that are very rich in the real estate market, and the industry is booming rapidly." The most common question property investors ask in those countries is that how long it takes to obtain the return on investment and that's how investments happen in those countries. Meanwhile Blue Ocean Group Chairman Thumilan Sivarajah, recently at the ground-breaking of the company's new condo in Layards Road Bambalapitiya, also noted that there is an increasing number of purchases through repeat customers or referrals channelled through existing customers on apartments.