Pravir Samarasinghe, Chief Executive Officer of Colombo’s iconic mixed development property, Havelock City, discusses the allure of real estate as an investment asset during these challenging times, with interest rates falling and equities underperforming amidst a Coronavirus pandemic.
Can you give us an overview of the real estate market under the present economic conditions?
At the onset, the period 2019/20 had many challenges for the property sector in general and the residential market in particular. The senseless Easter Sunday bombing in April 2019, followed by the advent of the COVID-19 pandemic in March 2020, adversely disturbed all economic activities including the real estate market. In addition to this, the uncertain political and economic conditions that prevailed during 2019 resulted in further constraints to the industry.
The retail and residential markets were the most affected asset classes. The dwindling consumer demand, and countrywide lockdowns and restrictions, had a direct impact on retailers and mall operators, with rent abatements still being offered by landlords. On the other hand, with the economic and other challenges that prevailed, the demand for residential properties also slowed down from April 2019 onwards and the lower sales off-take adversely affected some developers including their financial sustainability. Consequently, this too hurt home buyers with developments not being completed.
However, we are pleased to observe that measures taken by the government to remove VAT on residential sales, stabilize the currency, reduce interest rates and the general revival of economic activities and political stability have helped developers and buyers alike. Consequently, we now see increased demand for residential properties and a bright light at the end of the tunnel.
Why is real estate a compelling investment option compared to other asset classes such as equity?
As mentioned earlier, the reducing interest rates have made returns on bank deposits unattractive to many. At the same time, mortgage lending rates have reduced to all-time lows. This is shifting money away from fixed income securities to the higher-yielding property sector, which has both attractive capital gains and rental yields, making condominium investments an inflation-proof investment opportunity.
Likewise, although our stock market is trading at relatively low valuations, falling corporate incomes and market volatility during these uncertain times makes equity a risky investment proposition. Taken as a whole, an investment in an apartment developed by a reputed and reliable developer makes residential properties a safe, secure, and higher-yielding investment opportunity.
Can you give us an overview of Havelock City?
Havelock City is the largest mixed-use development built on 18 acres of prime land in Colombo. The Project comprises of both residential and commercial components.
We built the residential luxury apartment towers in phases; phase one and two are complete and sold out, and phase three was completed in 2019 and has a limited number of ready-to move-in luxury apartments that can be immediately occupied. The fourth and final phase of the residential towers will be completed by February 2021 allowing well discerning buyers the last and final chance to own an apartment at Havelock City.
The commercial development comprising a 50-storey office tower named Mireka Tower and an international standard shopping mall with a fusion of fashion, food and entertainment are planned for opening in September 2021, creating an unmatched level of experience to its residents and visitors.
Can you take us through the features and unique facets that make Havelock City a standout development project in the real estate space in terms of a place to call home and an investment asset?
As a place to call home, Havelock City, Sri Lanka’s largest fully integrated development, is an oasis of exclusivity with world-class standards of luxury; an architectural triumph design to give never-ending space to live, walk and play. A space you can call home.
Havelock City, widely known as a ‘City within a City’ offers a unique lifestyle for its residents. Its clubhouse, the largest of its kind in Sri Lanka, at the heart of the residential towers provides a range of facilities including two gymnasiums, three swimming pools, two squash courts, a mini cinema, a café, salon, launderette, mini-market and banquette halls for private functions. Other additions under construction are open-air badminton and basketball courts to enhance the amenities offered.
The beautifully landscaped garden spanning over seven acres of greenery, lush foliage, open-air exercise corners, walking and jogging paths, a giant outdoor chess set and a mini golf putting green is a haven for nature lovers. Nothing like this can be found anywhere in the hustle and bustle of the city. The upcoming mall and office tower will make Havelock City a true ‘City within a City’ with all the conveniences at your doorstep. As an investment asset, the strong roots of the developer Overseas Realty (Ceylon) PLC, who is the owner, manager and developer the of the iconic World Trade Centre in Colombo, makes Havelock City a safe and secure investment for you and your family.
Apartment owners at Havelock City have enjoyed above average appreciation in capital value as well as healthy rental yields due to its sought-after location, facilities, and amenities. We believe, the upcoming commercial complex and a planned transportation hub adjacent to the development will further enhance investor returns.