Iconic Developments Managing Director Rohan Parikh shares his thoughts about Colombo’s evolving property market, factors influencing its future and how the Iconic Group is redefining apartment living in the country. He discusses why efficient designs, strong solid structures, unparalleled amenities, and luxury at affordable prices make Iconic apartments an inflation-proof investment option with attractive ROIs.
Iconic Developments’ first two projects in the luxury apartments market – the 24-storeyed 110 Parliament Road and the 33-storeyed Iconic Galaxy, both at Rajagiriya – were highly successful and established the company’s reputation. Now, Iconic Developments is looking to repeat these successes with its latest venture, affordable luxury duplexes with Iconic Skye.
Excerpts of the interview are as follows:
Can you take us through the property sector since the outbreak of Covid?
In Colombo, the property sector since the Covid outbreak has been surprisingly resilient following a very uncertain period in 2019 due to the Easter attacks. The realities of the pandemic forced people to rethink their lifestyle choices, where they live, how they work and how they invest. As a result, we have seen a surge in property transactions post-pandemic globally. There are two factors.
One, the demand spike is not from new buyers alone. Many homeowners are also looking at a change in dwellings for different reasons: it may be for convenience, or some are looking at a smaller house, or others want more space, and there are those living with family members yearning for a home of their own.
The second factor is that the pandemic has changed people’s expectations and needs. Being cooped up indoors for months and working from home, people pay more attention to the amenities, and their entire perception about the ideal home has changed. These are the two main factors contributing towards a buoyant real estate market here and globally.
How do you see the Sri Lankan property sector shaping up in the year ahead, particularly in the luxury segment?
Ultimately and fundamentally, in Colombo, there is a shortage of housing. Colombo is one of the least urbanized among South Asia’s major cities, and the commute times are also among the longest. So, there is a crying need for affordable to semi-luxury housing in a convenient location. Demand will only grow, and it is a question of can developers respond to that demand at the right price points for different income segments in the market.
I am not sure if Colombo is ideal for ultra-luxury apartments. I am not bullish on that segment and never have been. There are several development projects in Colombo positioned as ultra-luxury, and I doubt there are enough buyers who can afford apartments at those prices.
However, there is more demand for apartments below the Rs50-60 million threshold. That is why we have positioned ourselves in the affordable luxury segment, and our latest project is opening with pricing around Rs37-40 million.
We have been remarkably successful in this segment since we launched our first project in 2009 with 110 Parliament Road, a 24-storeyed modern luxury apartment project at Rajagiriya. We followed that up with the 33-storeyed Iconic Galaxy also at Rajagiriya. Both projects had phenomenal with customers. They offered homes with superior quality finishing, modern amenities and conveniences at an affordable price. We sold out all the apartments before the construction of either building was completed. Investors were delighted with our apartments. That is the only thing that matters to us, and that was how we cemented our flawless, pristine reputation in the affordable luxury apartment market in the country. We are excited about our next venture, Iconic Skye, a 165-unit luxury duplex apartment complex at Rajagiriya.
What is the value proposition of Iconic Skye?
We have a simple value proposition for all Iconic apartments: affordable prices coupled with superior benefits to anything else in the market.
For instance, if you consider the value of our apartments in terms of price per square foot and add all the luxury finishings, modern amenities, and location, you will discover that we offer more value for money than any other comparable property in this segment. With Iconic Skye, we are pushing the envelope further.
The duplexes offer more space and privacy – and a little more comfort and luxury than a conventional apartment – which people are increasingly looking for in a home. Crammed with modern amenities, our residents need not look outside property to fulfil their shopping, entertainment and recreational needs. Iconic Skye has everything from a swimming pool to a party area, food court, play area, business centre, movie theatre, mini-movie theatre, laundry point, boutique shops and a mini-supermarket: all of that in one building. We designed Iconic Skye to be a self-sustaining, self-contained ecosystem. You can spend four months in the building and never go outside. And that is what makes Iconic Skye unique.
What is the project life cycle?
We plan to deliver completed apartments within two and half years from now. Iconic Galaxy was a much larger, taller construction. And it was scheduled for three and a half years, but we encountered uncontrollable delays due to the unfavourable market conditions in the wake of the 2019 Easter terror attacks. Iconic Galaxy is six months behind schedule, but that is comparably commendable to what has been happening to the rest of the market in the last two years.
What makes buying a home with the Iconic Group, particularly in Iconic Skye, a compelling investment?
Given Colombo’s long term trend towards urbanization and growing demand for affordable luxury dwellings, now is the opportune moment to invest in an apartment. Rapid urbanization means more and more developments, and the value of apartments will continue to go up. The second thing is that in Sri Lanka, unlike in places where real estate is expensive, the majority of the cost of the apartment is in construction, not the land. As a result, construction costs are unlikely to change massively over time, so apartment prices will not depreciate but will continue to appreciate. Real estate is also a good buffer against inflation, unlike other asset classes available to investors in this market.
Iconic Skye, as with all our properties, including Iconic Galaxy, is meticulously designed to be an efficient building, allowing us to offer affordable luxury and value for money like no one else can. And that makes an Iconic apartment a viable investment with a great ROI potential. For instance, some of our customers have seen their apartment values appreciate by 60-80% in recent years, a testament to our sound value proposition.
How are you planning to unleash opportunities for the parent company and investors looking at property opportunities in the year ahead and beyond?
I am confident Iconic Skye will unlock exciting opportunities for the group and prospective investors and homebuyers. We are exploring the potential to acquire land in and around Colombo, so we can continue to do what we do best, aptly demonstrated by 110 Parliament Road, Iconic Galaxy and now Iconic Skye. Even as rapid urbanization alters and transforms the city, we are setting trends in modern, affordable luxury living and creating unsurpassed long term value in the process.
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