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December 13, 2016
RIU real estate tips for buyers, investors and developers
As RIU has been requested to provide three tips on the Sri Lanka property market, we have taken a holistic view of the markets to offer the readers some food for thought on short, medium and long-term investments. In addition to residential, we have also considered commercial and other market segments as well as consider the investment interest from consumers, business leaders and large developers.

PICK ONE: Rajagiriya for residential

Once tipped as Roaring Rajagirya by RIU in 2012, this location that sits between the commercial and administrative capital still remains a sound investment that for short, medium or long-term investors. At the time of writing, there will be some travel / commuting delays for the next 14 months due to the ongoing construction of a fly-over along Parliament Road at the Welikada Junction. However, in the medium to long-term, this will only add to the attraction of this area as commuting times to the city will fall very significantly for Rajagiriya / Kotte residents.

Due to the location of the Parliament, Ragagiriya and Kotte will remain well furnished with well serviced infrastructure and connectivity and the Parliament Road will remain the VVIP road of the country due to its daily use by the Parliamentarians. Thus, property prices will feel only upward pressure for many years to come.

In a recent study, the RIU research team surveyed all residential developments that were completed, under-construction or in the pipeline in the Colombo CMC area as well as the surrounding suburbs. In our research, we covered all developments that have over 50 apartment units as well as a few smaller developments that were in the same price range.

Within the Greater Colombo Area (GCA), we can note that the central areas of Colombo 1,2, 3 and 4 tend to fetch the highest prices in the market. These prices are on average around 33% higher that the prices in other parts of the GCA. However, there are also important variations between different suburbs. For example, prices in Rajagiriya and Kotte are up to 20% - 25% higher that prices in non-prime Colombo and other suburbs.

PICK 2: Colombo 10 - Commercial, convenient and connected

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Given the prevailing land prices in this very central area of the city, Colombo 10 offers great investment potential, especially for commercial and mixed developments. Offices located in Colombo 10 will enjoy the highest levels of public transport connectivity as well as good road access. Planned and ongoing infrastructure will further strengthen connectivity in the area.

Currently offers comparatively affordable office rental rates as well as residential rental and sale prices as compared with the immediate neighbourhoods in Colombo 02 and Colombo 01. Colombo 10 is within minutes of the CBD and will further benefit from the ongoing Port City activities.

In a recent study, RIU generated primary research data that covered four main roads in Colombo 10 in order to identify the true character of the location in terms of its land utiliszation between commercial, retail and residential users.

The research findings indicate a growing presence of finance and IT firms in Colombo 10. These two sectors dominate in terms of number of firms located in the area as well as the number of staff working at these organiszations. Already we can note the presence of the Trace City complex that has recently witnessed the entry of the London Stock Exchange and the steady growth of the Orian City that is in close proximity. With the area benefiting from recent city beautification such as the rehabilitation of the Elphinston Theatreer, it will not be long before we see a demand for residential dwellings in this area. Under current plans, we can also expect to see the construction of the mono-rail project that will further add to Colombo 10's appeal as an area that is central and extremely well connected within the heart of the city.

PICK 3: The Port City (Colombo International Finance City): The future of Sri Lanka

Conceived back in 2003, this project is now finally moving forward after having to withstand a period of volatility when the island's political leaderships changed in 2015.

The concept behind the Port City, now re-branded as Colombo International Finance City (CIFC), is way beyond anything that Sri Lanka current has on its shores as far a real estate is concerned. The project vision is to build a place for people to enjoy living, working and conduct their business at optimiszed world-class levels in a "blue and green" environment. In effect, the CIFC is set to become the islands first fully planned Smart City.

The CIFC is currently at the land reclamation stage which will be followed by the commencement of infrastructure works. WhenOnce this work is completed we can expect to witness the start of construction activities by developers who are set to target the residential, commercial, leisure and retail sectors.
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