Real estate market witnesses upward trend

The growth of the economy, specifically the real estate and tourism sectors in Sri Lanka, have been repeatedly publicised over the post-war period.

Head of Sales and Marketing, Shangri-La Hotels Lanka (Pvt) Limited, Neluka de Alwis said, "Since the end of the civil war in mid-2009, the country's economy has been on a steady growth path by determined rebuilding measures, surging tourism and increased investor confidence."

The mixed development project, One Galle Face by Shangri-La, will have residential towers, commercial spaces and a hotel with all facilities in one spot. It offers apartments with up to four bedrooms, 16 penthouses, swimming pools, mini theatre, recreational facilities and a parking facility that can accommodate up to 700 vehicles. According to Board of Investments statistics, foreign direct investments began rising only over the past couple of years. As of 2014, Sri Lanka received FDI's worth around Rs. 1.6 billion.

"Low interest rates and moderate levels of inflation will boost trade and industry in the medium term. With several local and domestic investors hoping to capitalise on the economic growth environment and improving infrastructure, the real estate market has witnessed an upward trend in demand and pricing," de Alwis said.

"The recent upswing in the service sector from finance, tourism, and the IT and ITES industry in Colombo, has triggered a healthy demand for residential space in the Greater Colombo real estate market," she added.

"The development of premium condominium projects is most prominent in the central business district; and subdivided development, row houses and villas in the suburbs have emerged as the preferred choice for middle-income buyers," Alwis said.

Though international investors feel confident about the nation's current growth, a few barriers to entry make the destination slightly less desirable.

"The restriction of apartment purchase of the fourth floor and above needs consideration on the rationale of how it could be reassessed. Another factor for improvement is the money for purchasing apartments being monitored through strict exchange control regulations," she said. However, positives of the market outweigh the negatives where the demand for real estate from locals and expatriates is on the rise. Therefore, the market looks positive in the medium term for investors and developers.