Demand for Sri Lanka office space, apartments strong: RIU
ECONOMYNEXT – Demand for office space and apartments will remain strong in Sri Lanka, despite a rapid increase in supply in recent years, given an anticipated influx of expatriates and diaspora returnees, a property consultancy said.
Research Intelligence Unit (RIU) said the Chinese-funded Colombo Port City reclamation project itself will generate a lot of demand for real estate.
“The market will certainly benefit from the foreign and expat community who are likely to play a more significant role in the coming years ahead with the Cabinet approving new visa regulation changes for visitors and expats early this year,” RIU said in its annual report.
“Already, the number of dual-citizenship that have been given to the diaspora community has increased significantly according to our sources.”
According to the newly released report the Chinese Port City will function as a catalyst for future development and investment.
“The development process itself, which may last for up to another 25 years, will serve to increase demand for residential, commercial and hotel real estate within the prime Colombo area,” RIU said.
The Port City project is expected to create more than 83,000 jobs.
“If we consider that 10 percent of these will be at the senior management and consultant levels, then we are looking at new demand from around 8,300 professionals who will be working on this project,” RIU said.
The report said that Sri Lanka has enjoyed a sustained growth in the supply of high-end luxury apartments.
In 2009, the semi-luxury and luxury housing stock stood at just 783 units with the number increasing beyond 4,000 units by 2016.
When the number of developments that have been approved or are currently under construction is calculated, the number of units will top 14,000 by 2020, the 2018 Research Intelligence Unit (RIU) annual report said
Growth in service sectors like wholesale and retail trade, hotels and restaurants, transport and communication and banking, insurance and real estate will continue to drive demand for Grade A or B office space.
Demand for retail space will be driven by a growing middle class and rising incomes which will increase consumption and demand for international brands.
According to RIU’s market intelligence, this sector has many shortcomings which in turn can be made into opportunities by the developers.
“In the current context Sri Lanka is still driven by the traditional shopping experience. In fact the local consumer has not really experienced the real international shopping mall experience,” the report said.
(COLOMBO, 20 August, 2018)