Colombo has strong economic growth, improving infrastructure and an increase in tourist arrivals
Post-war Sri Lanka has created the perfect storm for intrepid property investors with its capital city, Colombo, seen as having the potential to be South Asia’s hub for real estate investment, according to recent reports by JLL and global property portal Lamudi. Still, the threat of market overcrowding looms, and the country’s unpredictable political narrative could also spell trouble.
“Sri Lanka is among the top emerging economies in the world,” says Shiluka Goonewardene, real estate advisory partner at KPMG. “The market for real estate has shown a phenomenal growth since 2009 and shows clear signs as an upcoming real estate investment destination.”
He adds that “ample investment opportunities” have been made available following the country’s dramatic transformation, mainly driven by infrastructure developments and stable economic growth. Recent improvements seen in the tourism, information technology, business process outsourcing, banking, finance and insurance sectors also have a hand in the current healthy demand for real estate.
In a real estate agent survey undertaken by Lamudi last year, it was revealed that 65 percent of the respondents reported feeling positive about the sector’s growth prospects in 2015, while over half forecasted growth of more than 8 percent in the property market.
Most of the agents surveyed also acknowledged that infrastructure improvements – including the creation of the Outer Circle Highway, proposals for a metro rail and monorail, and planned expansions of the city’s port and Bandaranaike International Airport – were the primary reason behind Colombo’s increasing investment appeal, thanks in large part to smart investments from the government after the civil war ended in 2009.
With political troubles now seemingly in the past, international visitor numbers have steadily increased in recent years. The obvious appeal of Sri Lanka’s beautiful beaches and Colombo’s emergence as a retail and casino destination has also boosted overseas interest, which has been cemented by the presence of multiple luxury international hoteliers and esteemed brands, including Shangri-La, Marriott and Hyatt. Although the majority of visitors are from neighbouring India, European, Maldivian and Arab tourists have also had their interests piqued.
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