The real estate market is unpredictable, but sometimes blessings come in a disguise. And opportunities often lie in where the shortage is. Commercial property in Colombo is in short supply lately due to the fact that not all property for rent meets the higher international standards required by housing authorities. In addition, factors such as new government incentives, issues such as traffic congestion and public transportation, and other factors, are moving the Sri Lanka real estate market into a better state due to the continued demand for commercial office space and renting opportunities.
The demand for office space property will continue to increase in the Sri Lankan market, as more shop premises, office premises, and catering premises are needed to drive the local market. In addition, property owners are enjoying a high level of financial return due to the demand being higher than the supply in the market right now.
It is predicted that the future looks good for Sri Lankans real estate investors, despite the shortage, as Sri Lankans work to improve real estate in the area by way of the following initiatives:
-There are plans to move Sri Lanka’s Colombo into a “garden city” that is going to attract tourism in ways it has never done before. This will help the business sector and will encourage more and faster growth in the area.
-Port expansion for Colombo is planned and is supported by the local government. Private investors will help with this expansion regarding both imports and exports and this will create an increased demand in commercial office space.
-There are plans to develop some of the under-developed areas in Colombo which will allow early movers to benefit from an increase in real estate prices, which will help investors, and boost the local real estate market.
-Surrounding areas such as Kandy and Hambantota plan to increase their office space offerings, which will draw in more opportunities for real estate investing.
OUTLOOK LOOKS GOOD
Sometimes good news comes in the form of bad news. The shortage of office spaces for rent is not a good thing in and of itself. But a closer look reveals that this shortage and the high demand for such properties will drive the market into a bullish state, which will inevitably help the real estate industry in Colombo and Sri Lanka. Based on recent land sales since 2009, this trend will only increase, resulting in an estimated growth of as much as 30% per year.
FACTORS THAT WILL AFFECT THE GROWTH TRENDS
The following factors are expected to affect the real estate growth trends in Colombo and Sri Lanka over the next few years:
-Strong demand in luxury properties and leisure areas
-Government incentives which are planned for commercial property which will increase development.
-Traffic issues addressed
-Improvements in the public transportation system planned
-The loss of public sector office space will free up more land.
REAL ESTATE OPPORTUNITIES
The best real estate opportunities in the Colombo area and Sri Lanka will continue to be in the commercial office space area and more business people move into the area and we see a continued demand for more space. The quality of the real estate properties should also improve as the government puts higher standards on property owners and renters demand higher quality for their investment as well.
Investors will find more properties starting to open up as these issues are address and as expansion continues into the next few years. And, while it seems there is a shortage of such needed properties, with many public sector office spaces moving out of Colombo and the area, there will be new development opportunities in the near future.
HOTEL EXPANSIONS PREDICTED
In addition to the predicted commercial office space boom, there is an estimated increase in hotel expansions providing even more opportunities for real estate developers and investors to increase their holdings in Colombo.
The beautification programs which are currently planned for the Colombo area will go a long way toward increasing the real estate market opportunities. As more tourists come to the area and people move in, there will be not only an increased need for housing and apartments, but also an increased demand for office space for commercial vendors in the area.
ECONOMICS AT WORK
The essence of the real estate issue in Colombo right now is that the demand is far exceeding the supply, providing a problem for renters which developers and real estate investors can solve for them. Using the opportunities the current events are offering for improvements in the city, as well as the natural turn of events occurring now in the area, there has never been a better time to invest in the development of new commercial business areas in the Colombo area.
BUILD IT AND THEY WILL COME
The truth is that if you build it, they will come, especially when they are demanding for it to be built in the first place. And that is what is happening right now in Colombo and Sri Lanka. There is a greater demand than the supply can currently meet, creating the ideal situation for real estate development. New developers will no doubt sprout up over the next few years, and we should continue to see an upward trend in real estate opportunities as these new events are put into place regarding beautification of the city and transportation issues.
THE NEW GOLD RUSH
It could be said of the Colombo commercial office space market that it’s like a new gold rush. In the early days of a gold rush, there is always very little gold, but plenty of people who want it. That is what is happening right now in Colombo. There are many people who need a place to rent for their business and who would like to move in to the area. But without available spaces, they won’t do it. So someone has to build those spaces for them and then there will be true growth in the area as more people move in to set up businesses. So if you want a great real estate opportunity, look to where the shortage is and fill the need.