Sri Lanka on the Up
It's been two years since the well-documented Sri Lankan civil war ended. For over two decades the Tamil Tigers were regular fixtures on the world's evening news.
Time travels fast in today's world and I've just returned from a "boots on the ground" visit to the island where I explored the emerging property market.
Truth be known, resort villas have been a fixture on the southern end of Sri Lanka for over 20 years now, coinciding with the emergence of the sector in Bali and Phuket. While the country lacked the critical mass or scale of the Southeast Asian counterparts, it did attract a similar market of upscale early settlers from Hong Kong and Singapore. Owners were typically British long-time expats, who were familiar with the region and often held top positions at multi-national firms or were wealthy entrepreneurs.
There remains an intrinsic link between the three destinations through the influence of legendary designer Geoffrey Bawa on modern-day tropical villas.
Needless to say, dropping Bawa's name in Colombo with a respectful hushed tone always lends credibility through what has become an iconic brand legacy.
The southern coastline has been a long-term tourism and property magnet. Starting with resorts a short distance from the capital city, Negambo and Bentota quickly became key areas to develop. Today these are legacy markets, not unlike Phuket's own Kata and Karon areas. Older hotels define the market-place, which is popular among long-haul European tourists who come and bask in the sun.
Next stop is Hikkaduwa which is famed for its surf and gathers a large contingent of board riders from around the globe, highlighted by Australians who have been coming for years.
Further away, the historic old city of Galle carved out a niche with its historic Portuguese links, similar to Goa, Penang, Malacca and Hoi An. With a scenic harbor, fort and gateway to long stretches of beaches, today the area serves as the hub of resort-based real estate.
Trek down the coast and you find what is termed the "golden mile", in Thalpe, with villas and hotels dotting the beachfront. Traveling the south, much of the terrain and access is similar to Phang Nga's Natai area, where the close proximity between the main road and the ocean allows ideal resort home lots to be constructed utilizing minimum land parcels. It's all about the location here and living on the sea.
Further along are Weligama, Matara, Dickwella and Tangelle. This is the growth area for both hospitality and property in the short to medium term and the main focus of current development. A new toll road which is set to link Colombo and Matara by the end of this year will cut travel time in half and is a lead indicator of growth.
If you think Sri Lanka is about roughing it, think again. There are two Aman resorts, Amangalla and Amanwella, which have helped lure the chain's famed 'Aman junkies' over the past few years.
Rounding out the area is the emerging "second city" of the country, Hambantota. Home to the current president, the region is seeing a massive influx of investment especially from mainland China. A new deep-sea port has been built, while an international airport will cater to overseas markets and provide direct flights debuts in 2013.
Other key developments include a new international convention and exhibition center coming on stream before the end of the year and Hong Kong's Shangri-La group is building a mixed-use resort and golf course.
I often write that 'airlift' remains a key catalyst for a positive forward trend, and the new airport is a leading demand generator.
Luxury estates are just in their infancy in the country. The one I visited in Mirissa named Nisala was designed by Hong Kong architect Jill Cheshire and is a leading example of overseas investors coming in and purchasing ultra villas.
Expect new hospitality-led residence launches by Six Senses through a joint venture and another by a Shanghai-based hospitality firm later this year on the southern coast.
While it is still early days for Sri Lanka and the market lacks many of the perks and benefits of Phuket, it is increasingly appearing on the global property radar. An attractive retirement visa package is offered by the government, which is spurring interest.
Perhaps, after the decades of fighting, there is a new sense of optimism for our Andaman Sea neighbor.