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The oversupply of apartments built in Colombo will not happen soon but likely to take ten years time should it happen, opines AVIC head in Sri Lanka – Zhong Yuhn.
“When you consider demand projections, the oversupply of apartments in Colombo is not likely to happen in the next ten years,” he added.
“But not now,” he emphasized.
The year of 2015 has been very important for Sri Lanka because of the presidential and
According to Ms. Gagan Singh, Chairperson – Jones Lang LaSalle Sri Lanka high-net-worth individuals in Colombo develop a taste for luxury residences.
“Sri Lanka has a growing number of High-Net-Worth Individuals (HNWIs), most of the developers of luxury residences that we approached claimed local buyers account for more than 60% of their sales, with Non-resident Sri Lankans accounting for the remainder.” “Out of the total size of the luxury market of 2,400 completed units, 98% of these are sold. It clearly emphasises a notable demand for the quality product. It is expected that by 2018 the luxury residential market is set to be double the size of today’s and the demand is expected to grow.”
The market for luxury residences in the current scenario is heading towards consistent noticeable growth. Many developers are planning to finish their projects in the medium-term horizon, and all developments are centred on the Central Business Development area – Colombo 1 with Fort,
Colombo 2 Slave Island, Colombo 3 Colpetty – and Rajagiriya, an upcoming residential location. As the luxury market in Colombo is in its early growth stage, the definition of luxury is hazy and subjective; however, JLL has categorised residences as per the price segments in the following manner:
Segment Price (Rs) Million Per Unit
Lower-Mid Level Under 10
Mid-Level 10 – 25
Premium 25 – 45
Luxury 45 – 60
Ultra Luxury 60 and above
As per the latest data of 2Q15, of the 10 residential projects completed over recent quarters, 95% of units were sold. The 16 projects that are under construction have been witnessing sales traction. Most of the projects have their own unique propositions to offer, but it is worth noting the developments by Shangri-La and Cinnamon Life. These mammoth size projects, which offer more than 400 units, are located in the CBD areas of Colombo.
The other well-known developers are sprawled within the limits of Colombo 3, 4 and 7, and in the fast-developing commercial zones of
Rajagiriya and Nugegoda. Noteworthy developers, such as John Keells Holdings, Fairway and Colombo City Centre, are relying on the advantage of anchoring clients through their trust, long-standing brand name, and working relationships in the local context.
However a research report published by CAL Research in November 2014 that it projects an oversupply of nearly 1,100 apartments in the semi-luxury and above categories by 2020, due to income and urban population growth rates being unable keep up with planned supply of apartments
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