Scope for luxury projects outside Colombo

For investors, or home-buyers, looking for luxury properties in Sri Lanka, the immediately choice would be Colombo, as the construction of a great deal of luxury projects, such as Altair, Clearpoint Residencies and Avic Astoria, are under way in the city centre.

There is no doubt that mid-range housing projects are in high demand in the suburban areas, specifically in Malabe, Wattala, Ja-Ela, Panadura and Moratuwa. However, not many luxury houses condominiums have been constructed in the suburban areas yet.

The demand for such projects has not been officially established yet. However, there are buyers who wish to have a second home, expats who hope to buy luxurious homes in their hometown and investors who wish to rent out apartments to foreign tourists and locals on a short-term basis. This is a niche market, which has not been harvested so far.

A luxury condominium in Colombo would cost more than Rs. 30 million due to increased land prices and demand within the city. Building the same condominium in the suburbs or much less developed cities such as Kandy, Jaffna or Polonnaruwa would cost much less. This would consequently lead to a much cheaper selling price. Buyers who hope to purchase a home in a city outside of Colombo would be interested in purchasing a lavish condominium at a slightly higher price than a mid-range home.

On the other hand, tourism and expat arrivals have increased quite extensively over the years. With much lower expenses compared to other nations, Sri Lanka can be considered a long-term-stay travel destination. Expats and tourists, who visit the pearl of the Indian Ocean, as Sri Lanka was once called, visit the wilderness and historical sites. This creates an opportunity for homeowners to rent out their luxury homes to obtain a second source of income.

Expats who left the country for better work opportunities and the diaspora anticipate coming back to Sri Lanka one day. These expats may not be interested in purchasing a luxurious home which is expensive and away from their hometown.

Managing Director, Lamudi Sri Lanka, Hugh van der Kolff said, "Luxury projects in such areas could provide a better return on investment in the near future because of several infrastructure development plans by the government such as the expressway to Kandy and Kurunegala, Monorail and circular ring road in Malabe and making Polonnaruwa a metro city. These developments could raise the value of luxury projects in the long run."