Sri Lankan Gold Coast Next Asian Boom Market
Sri Lanka’s resort real estate sector is set to be Asia’s next success story according to market research conducted by leading international property consulting firm C9 Hotelworks.
Leading the surge is a new wave of foreign investment into resort property along the southern coastline of the country. Multi-million dollar hotel managed pool villas are a developing storyline which has seen other regional leisure destinations including Bali, Phuket and Koh Samui attract high net worth buyers from around the globe.
C9’s Managing Director Bill Barnett said “Tourism is a leading catalyst for resort grade property as it links to sustainable demand.
One benchmark project our radar is the Six Senses Ahungalla Resort which will launch fourteen oceanfront luxury villas for sale by the fourth quarter of this year. Pricing points are expected to set a new standard for resort grade real estate in the country.” An increasing number of hotel chains are lending their brands to developers who view mixed-use projects as attractive ways to minimize long term debt and equity positions and enhance project returns.
A prime example of the chain loyalty connection is at Six Senses managed Soneva Fushi in the Maldives where last month a French–based buyer purchased a USD7 million beachfront villa after staying at the property a number of times.
While private holiday homes and villas have dotted the resort areas for a number of decades, with Galle being the epicenter, development is set to march further south. Mr. Barnett points out “ultimately access and infrastructure improvements are creating new catchment areas. The new toll road between Colombo and Matara will expedite travel time to ninety minutes.
Looking beyond Galle there is a noticeable uplift in projects from Talpe’s Golden Mile, down to Weligama and Mirissa Bay. The later highlights activity with the soon to complete six villa luxury estate Nisala, built by a Hong Kong group who currently has one property remaining pried at USD2.45 million.”
Conclusions in C9’s research indicates the Tangalle area looks set to see major resort and property development in the short to medium term. The new Hambantota International Airport will see airlift capacity take off when it opens in 2012. Another developing story has been service for upscale tourists by Maldivian Air Taxi and national carrier Sri Lankan who are ramping up flights on the coastal route.
A mega project by Hong Kong’s Shangri-La group includes a 300 rooms and villas, golf course and will be selling residential and investment property. With the new deep sea port and international convention centre, the area has a critical undersupply of hotel rooms. The close proximity of Tangalle with its white sand beaches and natural resort attributes make it an attractive target for international hotel chains. It’s inevitable the luxury Amanwella which opened a few years ago will sell branded villas once the market cycle moves up a notch.
Closing out the report Barnett says “the southern Sri Lankan Gold Coast has strong fundamentals to sustain cyclical growth and graduate from a developing market into maturation. Airlift is increasing which for us is everything, as you can’t stay in a hotel or buy property in a destination, if you can’t get there.
In our opinion the prospects for resort property will see a quantum leap both in product and pricing as a result of the entry of a critical mass of international brands and hospitality led residential projects.”