Defying the popular misconception of a housing bubble, there is a rapid increase in vertical living spaces in Colombo, and many are selling out quick. Astoria, a project by a Fortune 500 company, has already seen foreigners knocking on its doors and says there is a trend for investments both among Sri Lankans and foreigners alike.
Project Director of Construction & Sales Zhang Bo elaborated on the project and its current status…
Over the last decade, there has been significant growth in vertical living spaces, especially luxury condos. How does Astoria provide a unique experience?
Astoria is located on freehold land, which is different to its competitors, particularly within Colombo. This is a prime location for both residents and businesses. As a project, it’s one of the initial high rises in Colombo. Being a Fortune 500 company, Astoria is not reliant on selling apartments to meet cash flows. The company has already invested in this property even before the buyers has come in, so we are well poised to provide security to investors.
According to the engineers, the project can be given even a 100-year warranty, demonstrating the stability of its building structure. When compared to other projects, this promises a greater lifespan. We use a sheer wall structure, which infers more reinforcements, adding stability, than an external brick wall. The building management system (BMS) monitors all functions, including 24-hour security, password-protected door locks and access control systems.
What are the building’s highlights?
The four towers are independent and designed around a central courtyard. All levels have impressive views, and buyers have the option of selecting a sea view or street view. To achieve natural light and more cross-ventilation, each apartment features a small planter box in the balcony as a mini courtyard. Design-wise, there are 5 units on each floor (2-3 bedrooms) below the 20th floor. Above the 20th, there are 4 units [2 apartments combined into one apartment], with the option of 4 bedrooms. The 20th floor is a transfer floor, a unique construction feature. From the outside, our building is not just a box from top to bottom; it has a unique look.
We also have a high-speed elevator, as well as three lifts for the four units on the higher floors at each tower. The lift speed from top to bottom is around 40 seconds. We have followed set design standards with regards to fire detection and prevention. Even in the living room of an apartment, we have one fire detector and four sprinklers, which covers the whole area. There is a separate garbage lift, which has access on each floor, not a garbage shoot, with a garbage collection point on the ground floor.
What emerging trends do you see in the luxury condo market?
In Sri Lanka, customers have many options for vertical living, but we see a trend for investing in this apartment. There are more people coming into cities, including foreigners who are looking for a place to stay. Previously, they liked houses, but now apartments are easier and more convenient. We have seen greater interest by Chinese people who are already here who are showing willingness to invest. In our study, 70-80% of buyers were buying for investment purposes, and not for living. In Sri Lanka, the renting cost is high, which is attractive for investors who buy and then rent out spaces. Astoria has three categories of buyers: 1) locals with the capacity and intention to purchase, 2) dual-citizens, may be living overseas in countries like Canada and Australia, who want to own an apartment here, and 3) foreigners who do business here or have some connection to Sri Lanka.
[pullquote]We would like to thank our clients for selecting and trusting us, as this is how we have built up our name[/pullquote]
Tell us about the privacy aspect.
In all towers of our buildings, each floor has only four or five units, which something people like, rather than having 20 units on one common corridor. We also have a retail area, supermarket, swimming pool, gym, yoga, a 30,000 sq.ft commercial area with restaurants and a separate office tower. Our complex is also not too close to the Colombo business district, so as to give people space and time away from the city.
What is the investment needed to own an apartment?
Two-bedroom apartments start at $300,000; four bedroom at $1 million and the penthouses at more than $3 million. Tower 1 has 41 floors, tower 2 has 40 floors and tower 4 has 33 floors; tower 3, which is the office tower, has 15 floors. According to the original design, the four towers were to be of equal height, but we reduced the height so people won’t feel congested. Companies can invest in the office tower or even buy some units for living for their employees. Some embassies and foreign companies have already shown an interest in purchasing office space.
With regard to partnerships with banks, how have you assisted people with obtaining loans?
We have provided all documents necessary for banks to approve loans for buyers. However, many customers do not take loans, only about 20%, because we offer payment in installments. This development is under the BOI’s strategic development project.
How does ROI compare with that of other real estate projects, or investment vehicles?
If you invest in a vehicle, after 10 years, the value depreciates. But if you invest in Colombo 03 and a project of this scale, the value goes up every day. In 2014, our apartment value was half the price it is today. Since 2015, the value of units has increased by at least 30%. If someone purchased then, they can sell at a profit today. When it comes to investment, maintenance matters. Usually, after 10 years, there is a hidden cost for the maintenance of the building. Our construction method means that the cost of this will be less. We are not using new, experimental materials. Compared to steel buildings, the maintenance in our type of building will be much less.
Astoria is a Fortune 500 company partnering with a global construction company. What’s the benefit of these global names from an investor’s point of view?
AVIC is anyway famous, not for real estate but for aircraft. AVIC International is an engineering company. In construction, we focus on airports, like the overlay project last year of the runway at the Bandaranaike International Airport. We also have a contractor in China, CSEC, which is no.1 in the country. CSEC is now developing their brand in Sri Lanka. After this project, they will take on other projects in Sri Lanka.
Will AVIC be doing future projects in Colombo?
We have to see this project through first. The company has many years of operations here to its name. We would like to thank our clients for selecting and trusting us, as this is how we have built up our name.
Where do you see the luxury condo market heading in the future?
Urbanization is increasing, with more people coming here including foreigners. The requirement for apartments continues growing because land prices are increasing. We can’t always replace houses with houses, it will be apartments.