John Keells properties: Leading Sri Lanka’s Real Estate Journey
Is now the time to invest in real estate?
With their new properties—Cinnamon Life, TRI-ZEN, Peacock Valley and Sunrise Ridge—John Keells Properties (JKP) is at the forefront of the real estate space in Sri Lanka, explains Nadeem Shums, Assistant Vice President, Head of Sales – Property Group at John Keells Holdings PLC.
Can you give us an overview of the real estate market under the present economic conditions?
The real estate market is currently performing well, mainly due to the low-interest rates. We are seeing investors shifting money from fixed income to other asset classes such as real estate. We are also seeing an increase in the number of mortgages as borrowing rates have now come down as low as 8%. Investors are now looking for safe investment options for the medium- to long-term and investments that will give stable returns. Real estate is a good hedge against inflation.
LESS THAN 10% OF COLOMBO’S OCCUPIED HOUSING ARE APARTMENTS.
Why is real estate an interesting investment option compared to other asset classes such as equity?
For any investor, it is best to diversify your portfolio. The stock market has given investors good returns over the last few months. However, sudden shocks could adversely affect the stock market and have a pendulum effect. These shocks do not have an immediate effect on real estate, especially if you have invested in a project in the right location, backed by a reputed developer. Colombo is still at a very attractive price point in both the luxury and mid-luxury segments and has room for exponential growth. With large infrastructure projects like the Port city, this will put Sri Lanka on the map as an attractive investment destination. This will also lead to an increase in the number of expats driving rental demand in the city.
Can you give us an overview of JKP and some of its hot properties?
We started with The Monarch and The Emperor at Crescat City, two successful projects. We then developed Onthree20, a mid-luxury development on Union Place, and a super luxury development, 7th Sense, on Gregory’s Road. These properties have been very popular for homeowners, investors, and renters. We have now embarked on one of Sri Lanka’s largest mixed development projects—Cinnamon Life. This project will consist of an 800-roomed hotel, luxury apartments, state-of-the-art offices, shopping and entertainment and banqueting and convention spaces to host large MICE (Meetings, Incentives, Conferences and Exhibitions) events in the city. This project will give investors a great value addition because of the integrated nature of the project. We have a mix of two, three, four and five-bedroomed apartments and pricing starts from USD395,000.
TRI-ZEN is our latest metropolitan 53-storey project in Colombo. We wanted to help transform the way people live, so we focused on making the apartments super-efficient and smart-tech-enabled. We priced these one, two, and three-bedroomed apartments competitively at LKR26 million upwards. There is over an acre of community space which includes a 500m jogging track, two swimming pools, a gymnasium, a badminton court and more.
We also recently launched two real estate options at Victoria Golf and Country Resort — Peacock Valley and Sunrise Ridge. The Peacock Valley land plots are exclusive in the middle of the golf course, surrounded by golf views and the reservoir. Sunrise Ridge townhouses are our version of a hassle-free investment for your vacation home. Victoria Golf and Country Resort will manage the two-bedroomed townhouses, and the owners can stay up to 90 days of the year on a point-based system and get a share of the revenue.
With multiple luxury and super luxury projects in the development stage at present, do you envisage an oversupply in the market?
Sri Lanka is still at its infancy in terms of apartment living. Most of the population lives in detached housing. Less than 10% of Colombo’s occupied housing are apartments. Peer cities in the region, like Mumbai, have around 90% of its housing in the city as apartments; and Kuala Lumpur has 60-70%. As the traffic situation worsens, more people prefer to shift to central Colombo as most leading schools and workplaces are still located here. Because of the exorbitant land prices in the city and the periphery, buying land and building a house is not an option anymore. So, we will see this shift from landed housing to apartments once macro factors improve.
What role does location play in positioning these properties as compelling investments?
Location is the key factor for any successful development. This is why both our ongoing projects, Cinnamon Life and TRI-ZEN, are in the best parts of the city. Most of the offices are in the CBD, so you do not have to spend a long time on the road in traffic. You can walk out of your apartment and easily access the best of what Colombo offers. Be it gastronomical experiences, nightlife, a walk in the park, grocery shopping, or even to watch a movie. All this can be just a ten-minute walk from your home.
With lending rates falling to attractive levels, has JKP seen a spike in demand? And what financial partnership solutions does the development offer to an investor or buyer?
We have worked closely with some banks to come up with attractive solutions for our customers. One key solution we introduced is the Freedom Mortgage package for TRI-ZEN customers. With this package, all you need to do is pay 20% down and the bank will lend up to 80% of the purchase price. Once you make the initial 20% payment, you don’t have to make any more payments for two years, as you get a two-year interest free period and the bank will give you a grace on the capital repayments for up to five years. This, along with the low-interest rates, has helped us to improve our sales velocity in the recent months.