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Monday November 29th, 2021

CBH lands: uncovering high -yielding property boom pockets

This real estate developer is uncovering exciting opportunities in emerging areas in the country

CBH Lands styles itself as a boutique property developer and its uncovering exciting opportunities in emerging markets outside the usual property hotspots like Colombo, Galle and other places usually associated with tourism. “At CBH Lands, we specialize in identifying boom pockets which will generate the best real estate ROIs for our clientele,” said Yatila Wijemanne, Chairman of CBH Lands.

Wijemanne discusses the factors driving Sri Lanka’s emerging property hot spots and CBH Lands’ expertise and value proposition to help clients uncover market-beating real estate yields.

Compelling returns

Whatever a person’s social or income status may be, priority is given to owning land assets. Real estate as an asset class in itself has different segments, from owning land to apartments, and shared properties. We specialize in curating high-yielding land assets. Land prices have been growing despite the economic downturn since 2018 and the advent of the COVID-19 pandemic. Equities are unpredictable and the risk is high. Low risk fixed income assets are not doing well either. For instance, fixed deposit rates are as low as 4.5-5.5%. Real estate assets meanwhile yielded 15% on average, while in some pockets, land prices appreciated as much as 20% because of the heavy infrastructure development taking place in those areas.

Infrastructure factor

There is a reason why land valuations are appreciating despite the challenging economic environment we are experiencing right now. Projects such as the Central Expressway which connects Kurunegala to Dambulla, Kurunegala to Kandy and Colombo to Kurunegala will be cutting across the country. Even though they are large scale projects, they will be completed in the next two to three years.

The second phase of the development connecting Mirigama to Kurunegala will be completed by January 2021, according to the available information. There is also an elevated highway that is being constructed to reduce traffic in Colombo. These infrastructure development projects will drive up the value of the real estate in Sri Lanka as accessibility improves. For instance, when the Southern Expressway was completed several years ago, property prices around the expressway shot up from Rs70,000 a perch to as much as Rs400,000. Several investments will materialize such as academic institutions, hospitals and others which also lead to appreciating land prices. For instance, a planned campus in Homagama has already pushed up land prices in the area.

Another important factor impacting land prices is the Central Bank’s initiative to bring down interest rates. People will likely pull out their funds from FDs and invest in real estate expecting higher returns. As I said earlier, real estate is yielding around 15% right now. The Sri Lankan Diaspora is also looking at investing in a holiday or retirement home, which could keep demand high.

Property hot spots

Kurunegala is emerging as a hot spot for real estate because it will have five entry-exit hubs to the major highways, whereas places like Galle and Kalutara have only one. We see a huge migration of industries and services into Kurunegala to access these highways.

There are emerging boom pockets within the district of Kurunegala, which is a vast area. It is the third most populous district. People are already migrating from Anuradhapura, Polonnaruwa, Matale and Kegalle. Hospitals and academic institutions are coming up. Also, people are escaping flood and drought-prone areas and settling in Kurunegala. So, there are opportunities beyond the expressway hubs. I would not say these pockets are hot right now, but they will be once the highways are completed within the next 60 months or so.

CBH Lands, which took its current form in 2015, is a boutique property developer. We have an impressive portfolio of lands in Kurunegala having completed over 50 projects so far. We have a dedicated intelligence unit that looks at property markets and handles all the legal work including the title screening, documentation, and transactions.

We also aim to make land more affordable and accessible and help clients make informed decisions. We provide the development, investment consultation and property management services to clients purchasing land from us. We also maintain properties for clients who do not intend to build immediately.