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Tuesday February 7th, 2023

Iconic Developments: Creating Real Value in Real Estate

Rohan Parikh Chairperson, Iconic Developments

Iconic Developments Chairperson Rohan Parikh sheds light on the Sri Lankan real estate market and how the company creates unsurpassed value for investors.

Iconic Developments has cemented its reputation as a real estate developer for well-managed, risk-free projects that deliver modern residences with incredible amenities for modern lifestyles, superior value and appreciation potential. The value proposition of Iconic Developments is evident in its innovative developments, the 24-storeyed 110 Parliament Road and the 33-storeyed Iconic Galaxy. Its latest venture, Iconic Skye, will push the boundaries further and redefine the real estate market by introducing duplex apartments to the Sri Lankan market.

Designed to be self-sustained and self-contained like 110 Parliament Road and Iconic Galaxy, Iconic Skye residents will fulfil their shopping, entertainment and recreational needs without leaving the property, which will also have shared workspaces for those working remotely.

It will have everything from a swimming pool to a party area, food court, play area, business centre, mini-movie theatre, laundry point, boutique shops and mini supermarket.

In this interview with Echelon, Iconic Developments Chairperson Rohan Parikh shares insights into Sri Lankan real estate prospects and creating value for investors amidst an unfolding economic crisis.

As the worst economic crisis unfolds in Sri Lanka, what is your outlook for the real estate sector as an investment asset amidst high inflation and rising interest rates?

The short-term outlook for the real estate market is poor. Inflation and interest rates have galloped over 20%, making the sector unfavourable for most short-term investors. However, I believe that once Sri Lanka finalizes the IMF deal, real estate will regain its appeal as investor confidence in the economy improves.

The economy has already started to stabilize. Inflation is easing, and interest rates will likely fall, which I think should happen soon. Real estate has tremendous medium to long-term potential because demand for housing will only grow in Sri Lanka. There is a massive urbanization deficit in Colombo, so there is demand, but the present economic challenges make it difficult to meet that need. On top of this, we had the sudden introduction of VAT and various import restrictions posing further difficulties for housing development.

Home is where most wealth is stored, so if real estate development does not take off in the long term, it could hurt infrastructure development, further constraining the economy. Improving housing infrastructure is key to sustainable economic growth, which is why we hope the government will take the necessary steps to facilitate housing development.

How is Iconic Developments geared to withstand the challenges ahead and unlock growth opportunities?

The real estate market contends with several challenges. Due to inflation, it is arduous to determine the prices and the costs, compelling most developers to adopt dollar-based costing. Because of the exchange rate fluctuations, we’re trying to move as much of our production and purchases domestically and reduce imports. However, with all these issues, we have taken a wait-and-watch approach with future projects as a cautionary measure.

How is Iconic creating real estate investment opportunities for investors at this time?

Often inflation is volatile, but in Sri Lanka, it has climbed steeply in the last six months. Real estate is a proven hedge against inflation. The assets we create for our investors are assets they can buy and hold to generate long-term wealth, as any of our existing investors would confirm. Their investments with Iconic continue to be insulated from inflation while tripling in value due to appreciating property prices over the last few years.

Why should investors consider investing in your projects or apartments? What are the factors that make investing in Iconic a compelling option?

The key reason we continue to generate demand for our projects is that we have a completion rate of 100% compared to many other developers who are struggling to complete their projects on time due to the economic crisis. We have maintained our delivery commitments due to our expertise and financial strength while supplying the market with pioneering solutions like duplex condos at affordable rates. That trust is what makes customers constantly buy from us.

Can you also take us through the Iconic Skye project and why it is a compelling option for investors?

The Iconic Skye project has become more relevant than before. Our goal is to build affordable luxury apartments. Skye will have two-bedroom mid-sized duplex apartments priced between $120-$170 per square foot.

We think the project will provide real value for money, especially among younger age categories or those looking to invest in budget-friendly properties. So I think now, especially with the ongoing crisis, it should be even more relevant because these are affordable units.