With a population of about 21 million, Sri Lanka has traditionally led the region in the most pertinent economic and social indicators. It’s literacy of more than 90% is the highest in the region, and it was the first country in South Asia to introduce economic liberalisation in the late 70s.
After the end of the civil war in 2009, Sri Lanka has managed to retain high growth rates (above 6% of GDP) capitalizing on its highly educated workforce and advantageous geographical location and natural resources. Key public investments in seaports, airports, expressways, urban development schemes have already seen fruition with further investments in the pipeline. The end of the war has seen a remarkable increase in tourists and foreign direct investments in key sectors, especially in the undervalued property market in Colombo.
With clear political stability, the government is making long-term plans in its economic strategy. Key indicators related to the business environment have already begun to shift. The World Bank’s acclaimed Doing Business Report ranked Sri Lanka highest amongst the major South Asian economies.
Colombo is Sri Lanka’s largest city and recognized as the commercial capital of the country. It hosts one of the busiest ports in Asia and is home to all the major international corporate and governmental bodies that operate in the country. Modern and cosmopolitan in nature, the city has a mix of all the different ethnic identities in the country, and as of late, a growing expatriate population.
The property market in the city has witnessed increased activity resulting in a demand over the past few years. Overall demand outlook remains positive over the long term as the country is expected to remain in a high growth trajectory for the foreseeable future. The increase impetus towards service industries in the fields of IT, financial services, hospitality and the resulting growth of those industries with global players coming into the mix would result in significant demand for top grade commercial spaces.
In the residential front, the demand for property internationally is driven by expatriate Sri Lankans living in countries such as the UK, USA, Australia, Canada and high net worth Middle-east investors as well as Sri Lankans. The demand for luxury apartments is now seeing non-Sri Lankan interest by virtue of relaxation in exchange control laws specifically, the repatriation of capital gains.
Foreign investment in Sri Lanka’s real estate industry, including interest in properties, do not require approvals.
Foreign nationals are permitted to purchase above the fourth floor and have no capital gains tax on the sale of property. Capital and capital gains are freely repatriable.
Income tax is only payable on rent at the maximum effective rate of 18%, depending on the total income in Sri Lanka.
Sri Lanka offers a generous climate for foreign investors looking to invest in property in Colombo. Altair offers an unique opportunity to be part of an iconic structure of a country that will forever alter its skyline. Its location is in the midst of the most sought after business and residential districts in Colombo with unmatched views into the beautiful Indian ocean towering over a new Colombo. Backed by the strength of a proven real-estate conglomerate South City Projects and the architectural genius Moshe Safdie, the man behind Singapore’s iconic Marina Bay Sands, Altair will truly be a unique opportunity to invest in.
The existing luxury apartment projects have mostly been sold out and generate high rental yields of 8%-10% whilst capital gains of over 15% per annum is evident in the luxury apartment sector.