Real estate plays major role in Sri Lanka’s growth - JLL report

The real estate sector is playing a major role in Sri Lanka’s growth.

There is increased demand for residential property from wealthy and middle classes and there is also a high demand for class A commercial office space resulting in increased activity in the real estate sector, a report on real estate in Sri Lanka by global real estate consulting firm, Jones Lang Lasalle (JLL) said. JLL announced the publication of a comprehensive report titled ‘Lanka - Land of Real Estate Opportunities’. The publication addresses a strong demand for accessible, in-depth analysis into the domestic property sector.

Sri Lanka is poised to achieve UN millennium goals including eradicating poverty, raising primary education and reducing child mortality.

The country is moving from the peace dividend boom to GDP stability and economic consolidation.

There is also increased demand as a tourist destination, the report said. The tourism/hospitality sector is also poised for growth. In the residential sector, there are concerns over top-end over-supply, but the middle sector and low cost housing prospects are buoyant. There are eight malls under construction and private sector participation and infrastructure improvements are the engines for real estate growth in general, it said.

Sri Lanka debut ranking is 69 on the JLL’s Global Real Estate Transparency Index. The population of 21 million transitioning from lower middle income to higher middle income category on South Asia index makes a growing demand on the real estate sector.

“The launch of our report coincides with Sri Lanka’s first wave of high-end real estate development projects in the residential and commercial segments,” JLL Lanka (Pvt) Ltd. Managing Director, Steven Mayes said.

“This marks a significant milestone for the domestic market, which we believe holds the potential to become one of the South Asian region’s most promising success stories.

“There are challenges that need to be addressed, Sri Lanka is prone to limited but notable risks, largely arising out of the currently subdued levels of Foreign Direct Investment and a high fiscal deficit.

“Nevertheless, we see strong demand for Grade A commercial office spaces. Coupled with the major growth potential over the medium-long term catalyzed by major infrastructure development projects such as the Colombo International Financial City and the Western Region Megapolis, we believe that the overall outlook for the Sri Lankan real estate sector is strong,” he said.

Based on comprehensive in-house market analysis, surveys and related data and trend analyses compiled over the past five years, JLL anticipates strong, broad-based, double-digit growth spanning all sectors of the domestic real estate sector.

The Firm expects this growth to be driven by the surging demand for residential and retail spaces over the coming years. The report further notes that Sri Lanka continues to outperform neighbouring markets in terms of the ease of approvals to obtain building permits and register real estate projects. This is indicative of an ongoing concerted effort to improve the country’s platform to begin truly competing on the international stage. - SJ

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