Having honed his skills as an accountant specialising in real estate investing in the City of London, Hisham (Hardy) Jamaldeen returned home to Sri Lanka, believing post-war growth would generate high returns from real estate investments.
He has a knack for uncovering hidden real estate gems, spotting unnoticed, hitherto undeveloped property and giving them the cut and polish that yields their actual value, for his investors and himself.
Jamaldeen, who hails from a family involved in gems and jewellery with roots in Kahawatte (close to Ratnapura, the gem capital), brought more professionalism into Sri Lanka’s real estate market.
He felt it was still in its infancy when he entered, undeterred by the high rate of property fraud, relying on stringent internal processes and hiring the best lawyers for title searches as part of a very rigorous investment selection and execution procedure prior to acquisition. Changes to the land alienation law allowing free movement of capital into firms listed on the Colombo Stock Exchange enabled Lanka Realty Investments to be an ideal vehicle for overseas investors in property.
“What we managed to do is something totally out of the box,” is how Jamaldeen explains the Rs 5.6 billion share swap by Lanka Realty Investments to buy six privately-held firms with exposure to commercial property, affordable housing and tourism sectors.
The largest acquisition share swap on the CSE at the time, the deal catapulted Lanka Realty Investments to 83rd place in net asset value—of Rs 7.54 billion—from a rank of 196 and a net asset base of Rs1.65 billion before the swap. It’s market cap shot up to Rs8.2 billion and 60th place, from Rs1.23 billion, ranked 180th earlier. The deal was “really transformational,” says Jamaldeen. “We streamlined the process for our foreign investors.”
“The big idea for us is unlocking capital tied up in land and building for the private sector. We want to help them unlock that value.”
After the deal, the group held 8.4 acres of freehold land in Colombo with planning permission for 1,649 apartments, an office building in Colombo 10 with around 100,000 sq. ft. and three boutique hotels and villas in Colombo, Weligama and Ahangama with 44 rooms.
It also has two firms in construction materials—one making concrete blocks and paving stones and a still-dormant quarry, with the former, Amtrad Limited—to be streamlined and repositioned to capitalise on major construction projects. It was a good start to Jamaldeen’s ambition of being the CSE’s largest asset-backed in-come-generating real estate holding firm. A prudent approach to spending money had Jamaldeen enhancing his focus on catering to the middle-to-lower-income apartment market, and making calculated investments on assets in the leisure sector.
The aim was to meet pent-up demand at the time for middle-class or affordable housing and cater to tourists who are mostly not the high-end travellers but at the middle and lower end. The latter included plans for a 30-room tented safari lodge near the Yala wildlife park, with an initial investment of Rs500 million and a 53-room property in Ambalangoda costing a billion rupees. At the group’s freehold beach property in northern Pooneryn, farming has commenced, with the waterfront earmarked for a leisure project and the rear for renewable energy, the site being ideal for wind and solar power. With low levels of debt, the firm was well-positioned to borrow and build or sell stakes in subsidiaries to raise capital. It drew an initial foreign investment of about Rs7.2 billion—some from big names in the hedge fund world, in it for the long term.
“Most of my investors look at the aligned interest of a manager/developer versus shareholders,” says Jamaldeen. “We’ve given our investors the comfort of investing our money alongside theirs. We believe that aligning management interest of ownership with shareholders is the best performance-enhancing mechanism.” The ‘Port City’, a massive reclamation project off Colombo constructed by the Chinese who aim to build a properly planned city, was also in Jamaldeen’s sights along with corporate land banks.
“The big idea for us is unlocking capital tied up in land and building for the private sector. We want to help them unlock that value. The private sector can then deploy this capital to better use. This could well be the capital that fuels their next phase of growth.” Jamaldeen also believed there was an urgent need for modern, professionally-run industrial estates which Lanka Realty Investments could provide, given the capital and skills it had. The idea was to offer a more conducive environment for manufacturing businesses looking to move into a protected industrial zone, to operate undisturbed.
“Our focus is on real estate. We want other players to come in, to be focused on what they’re doing,” he says. “Income-producing assets is what we’re about, and we do want to do it well.” Jamaldeen is a fellow of the Association of Certified Chartered Accountants, UK and also has a degree in engineering and business from the University of Warwick, U.K.
At Steradian Capital Investments, he handles financing, acquisitions and development and what’s known as ‘corporate structuring’: designing complex transactions to satisfy clients’ special needs. In 2014 he was appointed an independent non-executive director to the board of the Hayleys conglomerate, where he is a director of group companies like Singer (Sri Lanka), Haycarb, and Talawakelle Tea Estates.