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Invest in properties in Sri Lanka
“Cities must have iconic buildings and structures; this is key to a city’s uniqueness and character,” says Mohandas Saini, Managing Director and CEO of Shapoorji Pallonji International. Akin to how Manhattan is defined by the Empire State Building, Kuala Lumpur by the Petronas Towers and Dubai by the Burj Khalifa. Saini made these remarks on one of his periodic visits to Colombo to review Altair’s progress, scheduled to complete in end-2019.
S & P CEO Mohandas Saini
Shapoorji Pallonji & Co. Ltd., regarded as one of India’s most valuable private companies with a legacy spanning over 150 years, is no stranger to such iconic construction projects. The company was the main contractor of the tallest residential development in India, the 60-story ‘Imperial Towers’ in Toledo Mumbai, completed in 2010. Other iconic projects by global construction giant include the palace of Sultan Qaboos Bin Said Al Said of Oman, Park Towers Dubai, Taj International Hotel Mumbai and the Hilton Riyadh.
Altair, adjudged the best condo in Asia for architectural design at the 2018 Asia Property Awards, was designed by Moshe Safdie, a pre-eminent architect of our time. Safdie’s works can be found across the globe and have become revered regional and national landmarks, including Yad Vashem Holocaust Museum, Jerusalem; Kauffman Center for the Performing Arts, Kansas City; United States Institute of Peace Headquarters, Washington DC; and Marina Bay Sands Integrated Resort, Singapore.
The unique design of Altair incorporates a 63-story inclined tower connected to the 69-story vertical tower via a strong outrigger at the 39th level. At the height of 240m, the vertical tower is now the tallest residential building in Sri Lanka
The inclined tower utilises structural steel diagonal grids on the exterior of the building giving a permeable surface for expansive floor to ceiling windows as well as acting as a load bearing membrane, minimising the use of interior columns. According to Mohandas Saini, these unique design features led to a particularly complex project from a construction standpoint due to the high degree of precision work required to maintain uniformity that cannot be achieved through traditional fast-tracked methodologies that are commonplace now in high-rise construction in Sri Lanka. Despite the challenges, the superstructure construction work was carried out at a commendable speed with ‘one floor added almost every week’, notes the CEO.
Commenting on the outcome of the superstructure works Saini remarks, “The entire weight distribution was so well engineered, and the workmanship is of such good quality that the level of deviation from original specifications were substantially lower than allowable structural engineering tolerances.”
Structural engineers to this project have been Dubai based Predag Eror of Derby Design, and well known Sri Lankan structural engineer, Deepal Wickremesinghe. Structural elements of the building were independently verified by the University of Moratuwa.
The CEO also says that Shapoorji Pallonji has earned their global reputation not only for their expertise in construction, but for their enduring commitment for the projects they undertake. “We believe in long-term value-added relationships with all stakeholders, often investing our own money in projects we undertake, as we have done so in Altair.” The main shareholder of this $ 250 million project is Kolkata based South City Group, a consortium of firms which has collectively delivered over 150 real estate projects consisting of more than 15 million square feet.
Along with Altair, Shapoorji Pallonji is involved in four other projects in Sri Lanka, including an office building and a water supply project. The CEO remarked that his company is considering engaging in a public-private partnership with the Government with regards to another key project and are open for further investment opportunities in the country.
Speaking of his experience of working in Sri Lanka, Saini says that local engineers have excellent skills and expertise. However, the company had to resort to employing a large foreign workforce due to the shortage of skilled labourers and specialised technicians in the domestic market.
Altair Director Pradeep Moraes was interviewed by Oxford Business Group, in his capacity as the Chairman of the Condominium Developers Association of Sri Lanka on how the real estate market is adapting to market changes.
In what ways do you see the capital gains tax impacting the local real estate market?
Moraes: Seeing as 10% is a modest tax, the impact would be minimal. A number of other markets have much higher levels of taxation and still experience vibrant real estate growth. The tax has been implemented in a clear and open way, the figure has been made public, and now the market can factor it in and go about its business.
Is there enough purchasing power in Sri Lanka to support further developments in the luxury residential segment?
Moraes: According to global real estate consultancy Knight Frank, Sri Lanka recorded the second-highest growth rate internationally in the ultra-rich community in 2016. In our experience, luxury condominiums continue to be purchased with over 90% equity and without borrowing. Over 90% of such developments are in the relatively affluent Western Province, predominantly in Colombo. Additionally, 99% of luxury and ultra-luxury apartments in completed projects and around 51% of those under construction have been sold, according to investment management company JLL, with over 60% of both sold to resident Sri Lankans. Most of the larger projects have been undertaken by reputable international developers who do not borrow locally and have certainly done their due diligence.
Like many countries, Sri Lanka has a hugely inequitable distribution of wealth. This, combined with the previously relaxed tax regime, has led to a gross underassessment of wealth, some of which is sent overseas. Luxury real estate offers a desirable and commercially sound option for attracting these funds into the local economy. There is certainly enough purchasing power to justify further luxury developments.
How the profile of luxury residential property owners changing?
Moraes: The current profile is 60-65% resident Sri Lankan, 25-30% expatriate Sri Lankan and less than 10% foreign. The low foreigner count is because the purchase of residential property in Sri Lanka is not linked to residency privileges, unlike several countries in the Caribbean, South-east Asia, and the Middle East, as well as certain Mediterranean countries in the EU. However, this is now being remedied with a proposal to grant residency visas connected to investment.
The recently inked comprehensive free trade agreement with Singapore, together with the enhancement of the existing agreement with India and those being negotiated with China and Pakistan are expected to encourage business relocation to Sri Lanka, which should have positive effects on rental markets.
How has the market reacted to calls to restrict lending to the real estate sector?
Moraes: The Central Bank of Sri Lanka has engaged with all stakeholders and is satisfied that the real estate industry is not a cause for concern. It has broadcast this view, going on, in fact, to say that the luxury segment was the least vulnerable.
As with markets everywhere, mindset and speculative concern can and will affect performance, as was seen in Colombo with the six-month slowdown in sales in 2017. Thankfully, this has now corrected, and sales are proceeding satisfactorily once again.
What impact would the introduction of real estate investment trusts (REITs) have on the Sri Lankan market?
Moraes: The benefits of REITs would be phenomenal for both the industry and the economy as a whole. Investments could increase exponentially, as REITs facilitate the entry of small local investors who otherwise lack the means to purchase as an individual. They also reassure foreign investors that their purchase benefits from professional guidance and market knowledge.
The stumbling block to the implementation of REITs is the issue of the 4% stamp duty payable to the provincial councils. REITs by their very nature propagate multiple transactions and it was feared that the business model could not sustain repetitive taxation. However, evaluation undertaken by industry players, the Colombo Stock Exchange and the Securities and Exchange Commission points to the aggregate of capital gains and rentals providing a cumulative return that remains attractive.
Therefore, steps are now being taken to revive the formulation and implementation of REITs, based on this belief in their viability and the scope for their productive participation in the Sri Lankan capital market.
Originally published on Oxford Business Group Website
The latest images of Altair, soon to grace Colombo’s skyline with luxurious living.
National Policies and Economic Affairs State Minister Niroshan Perera (right) answers a question during the Invest Sri Lanka forum held at Sydney’s Shangri-La Hotel yesterday. Others from left: CSE CEO Rajeeva Bandaranaike, Fitch Ratings Lanka MD and CEO Maninda Wickramasinghe, Central Bank Director of Economic Research Dr. (Mrs.) Yuthika Indraratne, CSE Chairman Vajira Kulatilaka and SEC Director General Vajira Wijegunerwardane
• Participants urged to recognise ‘promise and potential’ of new SL
• Capital market policies to improve transparency
• Over 150 Australian citizens and companies, other firms as well as diaspora attend forum
• Sri Lankans in Aussie told their investment crucial for driving country forward
Australia’s most populous city Sydney was told yesterday that it was time to invest in Sri Lanka given the future upside supported by progressive policies in place or planned under a unity Government.
This message was conveyed at the ‘Invest Sri Lanka’ forum organised by the Colombo Stock Exchange (CSE) in partnership with several stakeholders at the Shangri-La Hotel in Sydney. Over 150 Australian citizens, companies, other firms and representatives based in Sydney as well as Sri Lankans living in Australia attended the forum.
It was the first in a series of investor promotion conferences to be carried out this week in Australia and New Zealand, a key initiative undertaken for the first time in 12 years.
Chief Guest National Policies and Economic Affairs State Minister Niroshan Perera told the Sydney forum that Sri Lanka was set to enter new territory as it was poised for a renewed drive of growth and progress.
He said the country under the unity Government had progressed in recent times as a result of the commitment to economic and social reform. “The present Government envisions a globally competitive, export-led economy driven by revolutionary thinking and bold policies. We expect to drive the nation towards achieving middle income status, while maintaining a strong focus on sustainable economic growth and good governance,” he said.
“The Government has implemented a number of business friendly policies with a view to strengthening our local economic and business environment,” State Minister Perera added.
Noting that ineffective regulation for the longest time had stifled the economic and business climate as well as employment growth, he said the new Government was well in the process of replacing such regulations.
The forum was told that a new set of investment incentives based on Capital Allowances and a low tax regime were introduced through the 2017 Budget aimed at broadening the scope of Lankan businesses and having a significant impact on investment sourced through domestic and international channels. He also said the targeted outcome was to bring Sri Lanka within the top 70 nations of the Ease of Doing Business Index by 2020.
The importance of Sri Lanka as an Indian Ocean hub in the realm of global logistics and commercial activities was also stressed. The State Minister said an increasing number of businesses and investors are once again looking to Sri Lanka as an investment destination. He also referred to projects such as the Western Megapolis Development and the Colombo International Finance Centre to step up foreign investments, harness Sri Lanka’s strategic geographic location and achieve higher economic growth.
Focusing on capital markets, State Minister Perera said the Government was keen on maintaining integrity and quality by setting a policy framework that will lead to the operation of an open, secure and transparent marketplace.
“Through the 2017 Budget, the Government introduced a number of initiatives that, we believe, are likely to develop the capital markets in the coming years,” he said.
The Sydney forum was also told about Government’s announced plans to introduce a number of non-core businesses to the capital markets and these listings are likely to have a positive effect in terms of sparking market interest among investors and boosting market liquidity.
“A key priority of the present Government headed by President Maithripala Sirisena and Prime Minister Ranil Wickremesinghe is to regain the confidence of the international community. We are pleased to see a number of positive developments in this regard,” Perera pointed out, highlighting the impending return of GSP Plus benefits from the European Union and rising tourist arrivals.
The State Minister also sent a strong message to the Sri Lankan Diaspora in Sydney in particular and Australia in general.
“Many Sri Lankans who left our motherland during the conflict are actively looking to improve their association with Sri Lanka. The present construction boom driven by Sri Lankans living abroad is an example of such interest and involvement,” he said.
“Such progress is exactly why forums of this nature are of importance, because they play an important role in assisting the Government to reach out to our large and diverse Sri Lankan community overseas. Your ideas and your support are important to our country as we drive the future of our country forward,” the State Minister told the Sydney forum.
He urged participants to recognise the enormous promise and potential of an “emerging new Sri Lanka” built on the foundation of the Government’s new agenda of administrative and economic reforms and ease of doing business.
In that context Perera promised the Government’s continued commitment to facilitating investments and stimulating the establishment of transparent and well-governed institutions.
The Sydney forum and Thursday’s event in Melbourne are timed in the backdrop of Sri Lanka and Australia celebrating 70 years of diplomatic ties.
Sri Lanka’s High Commissioner in Canberra, Australia S. Skandakumar said Australia and Sri Lanka have long shared strong historical ties, common values and interests with trust which has resulted in multiple forms of economic and social cooperation over the years.
Skandakumar said economic and social progress in Sri Lanka seen in recent times has been complemented by a renewed confidence in the country among the international community, especially in Australia. The High Commissioner invited members of the audience to visit Sri Lanka to experience first-hand, the benefits of playing a part in a resilient growth story.
CSE Chairman Vajira Kulatilaka and SEC Director General Vajira Wijegunerwardane in their presentations were also emphatic that the time was opportune to invest in Sri Lanka.
Central Bank Director of Economic Research Dr. (Mrs.) Yuthika Indraratne offered insight into the economic policy direction of the country while Fitch Ratings Lanka MD and CEO Maninda Wickramasinghe presented a macroeconomic overview.
The Sydney forum also featured several leading real estate developments in Sri Lanka contributing in the capacity of event sponsors, including the Colombo Port City (Platinum Sponsor) One Galle Face by Shangri-La Hotels & Resorts (Platinum Sponsor) and the luxury apartment development by Altair (Corporate Sponsor).
The main presentations will be followed by a panel discussion moderated by CSE CEO Rajeeva Bandaranaike and a question and answer session with the audience.
The initiative is being held in association with several organisations including the Securities and Exchange Commission (SEC), the Sri Lanka High Commission in Canberra, Australia, Consul General in Sydney Lal Wickremetunga and Melbourne Prasanna Gamage, the Sri Lanka and Australia Chamber of Commerce and the Sri Lankan New Zealand Business Council.
The last CSE-led investor promotion was held in Australia in 2005. Post-war, the CSE has conducted road shows in New York, London, Singapore, Dubai and Mumbai.
On Wednesday two events will be held in Melbourne at the International Chamber House Melbourne and at the Novotel Melbourne Glen Waverley while another will be staged at the Fickling Convention Centre in Auckland, New Zealand on Saturday.
For the full article visit FT.lk
The latest images of Altair, soon to grace Colombo’s skyline with luxurious living. Scheduled to open in 2018.
Colombo’s skyline-defining high-rise development Altair has generated strong interest in Canada following a series of events and meetings in Toronto recently, promoter Indocean Developers reports.
The company was a sponsor of the 25th anniversary celebrations of the Canadian Tamils’ Chamber of Commerce and participated in a day-long forum and a gala dinner organised as part of the celebrations. This was the first occasion that a Sri Lankan company had participated in an event of the chamber. Representatives of Altair also had a lengthy meeting with the Sri Lankan High
Commissioner and Consul General in Canada and attended a meeting that the Tamil business community had with the High Commissioner. “The response of the Sri Lankan community in Canada to the project was extremely positive, and we were delighted to be part of a dialogue that focussed on the potential for investment in Sri Lanka,” Altair Director Pradeep Moraes said.
“It was evident that there is renewed interest in developments in the country, which a project such as Altair is particularly well-positioned to tap in to.”
Altair was also featured in interviews on two television stations, TET and ATN and Moraes was invited to be a member of a high-powered panel that discussed investment opportunities in Sri Lanka.
Read the full Article on the Daily Mirror
A modern-day architectural marvel is taking physical shape before Colombo’s eyes, as Altair’s iconic twin towers rises into the city sky at remarkable speed, a press release stated.
It added that promoter Indocean Developers reports that the building gained six floors in August 2016 — a benchmark given the intricacies of its structural design — and had reached its 32 level by the third week of September”.
“Designed by the celebrated global architectural genius Moshe Safdie, Altair will on completion in 2017 comprise of a 63-storey ‘leaning’ tower and a taller 68-storey vertical tower. It will have 400 luxury apartments that offer spectacular views of the Beira Lake, the Indian Ocean and the city of Colombo”, the release added.
“We are making excellent progress and are on schedule,” said SWA Project Manager and Altair’s Project Management Consultant, J. Domingo.
“Casting six floors in a month while ensuring International Specification Requirements pertaining to quality and safety is a new benchmark in the Sri Lankan construction industry”, he added.
“Altair’s local structural engineer Deepal Wickramasinghe commended the project’s contractor Shapoorji Pallonji Lanka Limited for the feat of building six floors in a month, despite the inherent structural complexities and composite nature of the construction that requires involvement of multiple trades” it added.
“Achieving completion of six floors a month in a masterpiece of its kind, while overcoming the logistic challenges and managing the cultural change involving various stakeholders is indeed a hard task,” Shapoorji Pallonji Lanka Limited, Project Director Baiju Ramakrishnan added. “Our commitment, dedication, hard work and international expertise in high rise construction are the factors that have made this possible”.
“Designed to be a game changer in contemporary living in Sri Lanka, Altair will bring a new dimension in aesthetics to Colombo’s skyline. It is intended to be a one-of-its-kind development in South Asia in terms of architectural design, structural engineering, and living experience. The development’s 1.5 million square feet of high-end eco-friendly living space will be supported by 40,000 square feet of supportive up-market retail space”, the release added.
“Breaking new ground in the local property development market, Altair has installed a 24-hour live stream from its construction site, enabling anyone to monitor progress. The live feed can be accessed via the Altair website www.altair.lk from anywhere in the world. It provides a real-time view of construction work from five different angles, with the views switching every 12 seconds’ it further added.
Extracted from Ceylon Today
Otis has been selected to provide high-speed elevators to the prestigious Altair project in Colombo, Sri Lanka, which when complete will be the tallest residential building in Sri Lanka and will have the country’s fastest elevators. Otis, the world’s largest manufacturer and maintainer of people-moving products, is a unit of United Technologies Corp. (NYSE: UTX). Elevators Private Limited, a JV entity between Otis and Aitken Spence, will install the elevators.
Altair will reach 240 meters — 68 floors — consisting of two towers with one tower leaning against the other. Indocean Developers (P) Limited, a venture of South City projects (Kolkata) Limited, chose Otis to supply a total of 19 elevators, including Sri Lanka’s fastest elevators with a travel speed of 5 meters per second.
“Altair is a unique project with requirements that stretch beyond the ordinary – it is exclusive. Otis’ technical know-how and credentials gave us the confidence that would be the right fit” said Pradeep Sureka, Director, Indocean Developers (P) Limited.
“Otis’ worldwide experience in delivering vertical transport solutions in tall buildings, coupled with their strong local presence, made them the right choice to provide us with elevators for Altair,” said K. M. Sathian, Director (Projects), Indocean Developers (P) Limited.
Extracted from Times of Oman
A large number of Omanis are turning to Sri Lanka to invest in property, infrastructure development and the farming sector, officials said.
Speaking to Times of Oman, Anselm Perera, CEO of Business Process Outsourcing Services LLC (BPOS) Oman, who coordinated one such delegation, claimed Sri Lanka became a good place for investors after the civil war ended on May 18, 2009.
“Since then, we have seen a surge in investors from around the globe,” he noted.
The team coordinated by Perera was led by Saeed Saleh Saeed Al Kiyumi, chairman of Oman Chamber of Commerce & Industry.
Besides investing in farming, Omanis are also buying residential properties in Sri Lanka. “The Omani delegation which visited Sri Lanka also held discussions with reputed high-rise residential development agency Altair about buying some apartments,” he added.
“People are investing as they can expect rental yields of 8 to 10 per cent and capital gains of more than 10-12 per cent in the luxury apartment sector in Sri Lanka,” Perera said. Further, investors receive capital gains on the resale of apartments, which in some cases are tax free for foreign nationals.
Designed by architect Moshe Safdie, Altair is offering 400 apartments with 1.5 million square feet of living space supported by 40,000 square feet of retail space. The building is scheduled for completion in 2017.
Interestingly, tourist arrivals in Sri Lanka from Oman have also been increasing in recent years. “Besides business travel, we are expecting around 20,000 tourist arrivals from Oman in 2016,” said Deepal Pallegangoda, Country Manager Oman, Mihin Lanka, said.
In 2015, 14,216 tourists from Oman visited Sri Lanka. “Because of the economic crisis, many people are shunning holidays in Europe and looking for cheaper options, like Sri Lanka, where they can get greater value for their money,” travel agents stated.