This has come to light with the depreciation of the Sri Lankan rupee and many expatriates are looking for apartments that are already built by a reputed company in Sri Lanka, Iconic Developments Pvt Ltd officials said.
A recent report by KPMG said about 18 per cent buying apartments are Sri Lankan expatriates and 4 per cent are institutional investors.
“This figure has increased substantially with the rupee depreciation,” Rohan Parikh, Managing Director of Iconic Developments Pvt Ltd said.
The average year-on-year depreciation of the rupee from 1st January 2015 to 21st September 2018 was 9.2 per cent per year.
“This has positioned aspiring expat condo owners in a significantly better position to purchase apartments, Parikh explained.
In the short span of 14 months since its launch, Iconic galaxy has captured the hearts and minds of investors and residents with more than half of its residences sold.
Galaxy builds on Iconic’s success at 110 Parliament Road, with over 172 residences sold in 2 years, on time delivery and double-digit returns.
Parikh added that their landmark residences, set in the heart of rapidly growing Rajagiriya, overlooking the Royal Colombo Golf Club, offered a lifestyle and amenities of a caliber never seen before – including an entire 2 floors dedicated to entertainment and fitness, with facilities such as a gymnasium, swimming pool, spa, crèche, sports areas and more.
“It’s mostly what those residing abroad have already experienced.”
Rohan Parikh noted with Iconic Galaxy now poised to become a fitting sequel to the 110 Parliament Road story – one that will set a new standard in Rajagiriya.
“It’s now a good time that expat Sri Lankans should ideally purchase apartments in Colombo” expressed Parikh.
The KPMG report says 61 per cent of the buyers of luxury condominiums are local investors, while 17 per cent are local end-users.
“During the past few months we noticed there was a major hike in the queries from locals residing abroad,” Rohan Parikh, Managing Director Iconic noted.
It also says the moderation in inflation in the first quarter of 2018 and the favorable inflation outlook as well as the continued negative output gap, compelled the Central Bank to end its policy tightening bias and reduce the SLFR by 25 basis points on 4 April 2017.
As witnessed by this report, Sri Lanka’s core economic statistics stand favourable towards aspiring expat apartment buyers.
“The GDP has grown marginally in 2017 and is now at Rs. 13.3 trillion while in 2016 it was Rs. 11.9 trillion.
The country’s Growth rate is now 4.5 per cent,” he said adding that with this backdrop, the country’s housing requirement is high.
“Around 100,000 housing units per year are needed to fill the housing gap,” Parikh revealed, noting that in this light the demand for apartments is increasing.
He said the Government infra-structure drive – the light rail transit system from Kottawa, the expressways, highways and new roads – all combine to make an investment in an apartment attractive.
Investments in condominiums have generated historical returns at 17 per cent return on interest,” he said.
Apartment rentals yield – 5 per cent to 9 per cent annually.
“There is stable economic growth. GDP per capita in 2017 was US$ 4,065.
The government targets a GDP per capita of US$ 5,075 by 2020, propelling the country’s status to an upper middle income economy,” Rohan Parikh said explaining the statistics adding that Colombo Megapolis Development Plan will boost the country’s economy further.
“The Port City will be a game-changer with improvement in internal and external connectivity Sri Lanka’s urbanization growth will amplify from 0.3 per cent to 3-4 per cent in the next 15 years, to reach an urbanization rate of 30 per cent by 2030.” Parikh said.
He stated that Port City Development Project is a key focal point in the real estate landscape of the region.
“Regionally, Sri Lanka remains attractive as an emerging market, when considering the return on interest on real estate.
The positive outlook for the global economy is an encouraging sign that the rewards will continue for some time to come.”
The country’s population is also expected to increase to 24 million from 21.4 million in 2017.
“This is also expected to drive the population density in the Colombo District from 3,495 people per square kilometre to 5,722 per square kilometre, by 2030.”
Sri Lanka’s housing requirement is also expected to rise to six million from the current five million, due to population growth, urbanization and income growth that is currently happening, he said.
“We also predict that 6,827 apartment units will be added to the Sri Lankan real estate market by 2020.”
He added that Sri Lankan government has a target of attracting more than four million tourists annually by 2020.
“As such, commercial properties focused on tourism as well as short-term residential properties offered for rent can expect a significant demand in the next few years.”
According to the Real Estate Report published by KPMG in Sri Lanka, the country’s ultra-luxury apartments are currently valued around $400-550 per square foot, while the luxury apartments are priced at $200-399 per square foot.
The luxury apartments in the suburban areas are valued between $120 and $199 per square foot. In this backdrop, buying an apartment is essentially a sound investment decision.
“Now our apartments are more valuable than ever,” Parikh summed up.
Photo caption
1.) Rohan Parikh, Managing Director of Iconic Developments Pvt Ltd
2.) Graphical representation of the birds eye view of Iconic Galaxy
