Liberty Plaza owner mulls major undertaking to expand...

The owner of Sri Lanka’s first and oldest shopping mall, Liberty Plaza, mulls on a major undertaking to expand and upscale the shopping mall to face the growing competition emerging from new and upcoming modern malls in Colombo.

“My attention is also focused on further developing and upscaling Liberty Plaza. The retail sector has been negatively impacted by external circumstances in play coupled with competition from more modern malls. Our intention is to keep Liberty Plaza, which sits in a prime location, relevant,” Colombo Land & Development Company (CLND) PLC and Urban Development Authority (UDA), Chairman, Harshan De Silva told shareholders of the company in its recent annual report.

The occupancy level of the mall last year dropped to 73 percent from 80 percent in 2019 due to the pandemic.

Singaporean businessman Ng Eng Ghee developed the Liberty Plaza making it the first ever-shopping mall of international standards in the country in early 1980’s under the newly established public-private partnership entity CLND.

After three-decades, Liberty Plaza got a facelift increasing the overall retail space area of the mall by 30,000 square feet to over 136,348 square feet with the addition of the Liberty Arcade with an estimated investment of Rs.960 million.

“Going ahead, we will have to look at transforming a large-scale development, which can be linked to an adjacent block and enhanced,” De Silva said.

A similar development project was also placed under consideration in 2013.

Meanwhile, De Silva also revealed plans for a mixed-use development project in a 10-acre land in Pettah owned by the company, in the surroundings of the proposed multi modal hub, with heavy and light rail transit, a bus terminal and car parks.

“Without wasting prime lands owned by CLND for car parks, we aim to build a mixed-use development vertically over the basement car parks. Green lighting this project would first require clearing roadblocks that have thus far prevented the project from progressing further, while exploring how best CLND could fund the project,” he stated.

The particular land parcel is currently occupied by the Central Bus Terminal and other entities.

De Silva insisted on pre-development of surrounding areas of Colombo Port City (Cpc)such as Pettah in order to facilitate necessary infrastructure and logistic support ahead of the deadline for CPC’S opening in 2030, which is expected to elevate the area to become ‘the Manhattan of Colombo’.

“The combination of Heritage City, Port City and the Marina City together will enhance the outlook of Colombo city in tandem with the re-imagined Galle Face Green which will have the elevated highway in front, completely transforming the area into the Manhattan of Colombo,” he elaborated.

With the UDA being tasked with ensuring idling structures are brought to fruition to enhance the skyline and value of surrounding lands, he stressed that the UDA wouldn’t hesitate to acquire any underutilised land parcels in these surrounding areas of CPC to redevelop.

Echoing De Silva’s sentiments, CLND CEO, Vasula Premawardhana remarked that uninterrupted progress in CPC, which is triggering development activities in the surrounding areas, would mark an upward trend for the country, with a positive outlook for the real estate development sector in the medium and long term.

However, the company acknowledged that if the pandemic continues unabated, it would delay potential investment and development activities in the country, making economic recovery a real challenge.

In 2020, CLND’S rental revenue dropped to Rs.354 million from Rs.396 million in 2019.

However, income from car parks increased by 30 percent Year-on-year (YOY) to Rs.83 million. The company also owns 52,262 sq. ft of People’s Car Park Complex in Pettah built in late 1980’s.

During the year under review, the company’s earnings declined by over 82 percent YOY to Rs.59.21 million or 30 cents per share.

Due to increased cost of borrowings and tightened cash flows, the company has been seeking to reschedule original repayment period of the Rs.1.7 billion loan obtained for the revamping project.

At end-2020, Ng Eng Ghee was the largest single shareholder of CLND with 23.71 percent stake followed by 20.21 percent, 17.48 percent and 9.37 percent stakes held by Dilith Jayaweera-controlled Hikkaduwa Beach Resort, UDA and Ceybank Unit Trust respectively.