ECONOMYNEXT – Cinnamon Life, promoted by Sri Lanka’s John Keells Holdings Plc, said cost were up 10 from the original 805 million US dollars and the commercial, hotel and residential development would be completed by 2021.
"The date for project completion now takes into account the staggered opening of some elements of the project and completion of all works including the detailed interior design work," Chairman Krishan Balendra told shareholders.
"Accordingly, the completion dates of the residential and office towers will be March 2020, whilst the operations of the hotel and retail mall are expected to commence in March 2021."
In 2013 the project was expected to finish in 2018.
The 805 million US dollar estimated was without taxes and interest costs he said.
In 2013, the firm said the cost is estimated at 820 million US dollars.
At the time the rupee was at 131 to the US dollar. Since then the central bank has busted the rupee to 176 to the US dollar, through a combination of policy errors and deliberate real effective exchange rate targeting.
The central bank with its unstable soft-pegged exchange rate is perhaps the biggest economic challenge to the people, analysts have said now that a 30 – year civil war has ended.
John Keells said its apartments priced in dollars was seeing weaker demand after a recent rupee collapse.
The pre-sales of the Residential Towers; "The Suites of Cinnamon Life" and "The Residencies at Cinnamon Life" was 65 percent of total floor area, despite the general slowdown in the residential market.
"Given the steep depreciation of the Rupee and the political disruption in the country during the last quarter of 2018, the traction on the apartment and office sales has been subdued," Balenda said. "The momentum is expected to improve as completion draws nearer.
The total revenue from the sales of the residential apartments and 10 floors of the commercial office space of the "Cinnamon Life" project is estimated to be 250 million US dollars.
The dollar sale price however hedges the US dollar borrowings. The repayments of a 395 million US dollar loan has been had also been delayed to match the delay, he said. (Colombo/May26/2019)