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| Sunday, 26 October 2003 |
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Business |  |
| News Business Features Editorial
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Race for the tallest building by Pelham Juriansz and Hiran H. Senewiratne
With the Budget just around the corner (November 12), one could be pondering as to where best to invest one's money. Looking for a "Pie in the sky" or rather, a dwelling place which one could term as an "ivory tower" could be a good investment. Is the "sky the limit" in this case? Investing in a house is indeed a complex situation, but as recent surveys show, it is a more viable option than fixed income securities, the stock market, foreign currencies or precious metals. Investing in fixed income securities is playing it safe, but at what price? The stock market offers high risks, but high returns can be expected. The real estate market has come to the fore on the back of a property boom. House prices in general have climbed sharply, while select areas such as the South Coast have done particularly well, fuelled in part by demand from foreign nationals who are looking to buy vacation or retirement homes. For those who do not relish hunting for a suitable house as an investment, the purchasing of apartments either for appreciation in value or for renting has become an attractive alternative. This is all the more feasible given the lack of land and houses in prime residential areas (such as Colombo 3, 4, 5 and 7) for outright purchase. Most of these apartment complexes are located in and around Colombo and cater to different segments of society. According to Managing Director of Lakskman Housing Construction, Pinsiri Fernando, their most recent project is Sun City Apartments at St. Anthony's Mawatha, Kollupitiya, a luxury housing scheme, with each apartment having three bedrooms and full air-conditioning. The complex has a swimming-pool and gymnasium and the price of apartments range from Rs 9-11 million. Other projects of the company were Rosmead Towers, Horton Towers and Horton Regency. "Most of these apartments are occupied by foreigners. Sri Lankan investors in the business community are in the process of buying such apartments for convenience, because most of our apartments are situated in central spots," he said. Global Investment and Property Developers (Pvt) Ltd is another new entry to the apartments sector as "we believe business in that sphere is very profitable and demanding," said Director and General Manager C.W. Pannila. According to Sierra Property Developments Director and General Manager, Chanura Gunathilake, the company is planning to launch a condominium project to construct 2000 apartments throughout the country before the end of this year. He said this project will initially start in Nugegoda (Girton Residencies) followed by Nawala and Narahenpita. Gunathilake said that each apartment has two to three bedrooms catering to the middle and upper middle class. Prices range from Rs 3.5 million to Rs 8 million. He said that the company decided to launch this massive project due to the heavy demand for apartments. Advertising All apartments are advertised in newspapers and magazines while some apartment lobbies have special sales as well. The advertisements provide all the details about the apartment as well as the special features one would enjoy. This is all about "apartment living", where one's house seems to be "up there in the sky". Land Hyde Park Residencies at Hyde Park, Colombo is available to those who can afford Rs 15 million or more. However, the land does not belong to you. This concept began in Colombo about 10 to 15 years ago. Mahogany doors and all that are given at a price. It would be about thrice the price of some of the older apartments like the two Plazas in Kollupitiya. Best apartment Some residents at Lucky Plaza claim that it is the best apartment in Colombo. Having put behind them the horrors of the electricity problem, residents say that this particular Plaza is well designed. The concept of condominiums is still relatively new to the country, having commenced in the early 1990s and witnessed a surge with the first large-scale projects of Crescat Residencies and Royal Park. Market leader The most prominent beneficiary of the growing demand for condominiums is probably Crescat Residencies as these apartments have been the market leaders in price and rentals for the past few years. Crescat's advantage over other condominiums is that it is easily accessible, and is conveniently located. Residents of Crescat have the convenience of shopping at a premium retail mall - the Crescat Boulevard - and access to the five-star hotel next door. Asian Hotels has revived the original vision and hopes to build the residential tower of 160 apartments at a cost of Rs 1.5 billion by the end of 2005. Only the proposed Ceylinco Residencies will probably match Crescat. Despite this, given the limited supply, only about 40 (out of the total of 152) units at Crescat, and less than a combined 20 are available at the 88-unit Hyde Park Residencies and the 58-unit Pacific Pinnacle (under construction). Since Colombo Plaza will be managed by an international hotel chain, Crescat will soon be uniquely positioned to attract long-stay and high-spending business people as tenants. However, condominiums require large amounts of money as prices generally range from Rs 9 to 20 million. The older condominiums were sold for anything between Rs 5 to 7 million. Premier Pacific Pinnacle at Duplication Road, Bambalapitiya is a new concept in shopping in luxury and comfort in a nature-friendly environment which is being created by Premier Pacific International (Pvt) Ltd. Seventy five per cent of the apartments have been sold and the total cost is Rs 850 million. History In 1983, the Bank of Ceylon (BOC) building was being constructed in the Fort. At the time, it was the tallest building in Sri Lanka standing at 33 floors. The race to build the tallest building goes on. Overseas Realty Ceylon Ltd, which owns the 37-storeyed World Trade Centre in Colombo Fort, recently announced that eight floors in the West Tower will be converted to be sold to Bank of Ceylon. Middle Class All these of course seem to cater to the "super-duper" rich folk who can invest in such fanciful luxury apartments. But what about the "middle class"? A perch of land in the heart of Colombo is over one million rupees. Who can afford it? Sincerely, would one consider the options available as regards investing in a condominium as opposed to banking one's money or taking a risk on the stock market? Convenience Most of these condominiums have sold more than 75 per cent of their apartments. Convenience, comfort, security, appreciating value of the apartments due to the non-availability of land in the prime locations of Colombo and most importantly, the prevailing peaceful atmosphere was cited as the main reasons for people to purchase apartments even at high prices. People who live abroad purchase apartments and rent them out so that they can come back to their home country and enjoy their retirement while some purchase apartments and rent them out to earn a profit. Another advantage is the availability of 24-hour maintenance staff to attend to any breakdowns in electricity, problems with water etc. The latest idea of constructors is to build hotel type condominiums where purchaser almost think that they are in a hotel. These are complete with swimming-pool, badminton and squash courts, gymnasium, supermarket, shopping complex, banking facilities with most of the leading banks having Automatic Teller Machine card systems within easy reach. One such place that comes to mind is the JAIC Hilton Tower, which was recently acquired by the Hirdaramani Group. It was constructed nine years ago and was a supreme investment for the Japan Asia Investment Company (JAIC). With 33 floors, the property features 175 well-appointed serviced apartments as well as other facilities. The convenience of community living is another aspect that encourages one to purchase such an apartment. Residents organise parties and get-togethers on a regular basis and have welfare committees that oversee the affairs of the condominium dwellers. The downside of the condominium concept is that it is just a "pie-in-the sky", built on land that really does not belong to you. There may also not be adequate precautions against fires or earthquakes. However, the convenience cannot be over-stressed. The magnificent view that one gets from these apartments will be another plus point. One could see the sea from some of them, and from those that are really high enough, one could survey the whole of Colombo, which especially at night, could be a breathtaking sight indeed. |
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