Capitalizing on opportunities in Colombo’s middle income housing and Grade-A office space real- estate markets, Sanken Group plans to develop a Grade-A office complex in Baybrooke Place, Colombo 2 with an investment of Rs 7 billion, and a mixed development project in Sri Jayewardenepura – comprising a middle-income apartment and a 2,000-seat convention centre – in a joint venture with Grand Monarch by investing Rs 10 billion, said Rohana Wannigama, Managing Director of Capitol Towers Limited, which is a member of Sanken Group, to Ceylon FT.
According to Wannigama,13 floors of the office complex will be dedicated for office spaces, while the building will also comprise other facilities including a ground-floor bank, basement food court, and eight parking levels, as well as a rooftop dining and entertainment space. The developers have already secured all necessary approvals and are expecting to commence construction by June 2018, with plans to complete the project by end of 2020.
The twin tower mixed development project will have 20 floors in each tower, with 320 apartment units for middle-income earners, which will be adjoined to a 2,000-seater mega convention centre and a large food court.
The mixed development project is located near Sri Jayewardenepura hospital and in close proximity to the Parliament. Sanken Group, along with its joint venture partner, has already secured the land from UDA on a 99-year lease basis; however, Wannigama noted that apartments units will be transferred to buyers on a freehold basis. The investment in the residential space is estimated at Rs 8 billion, while the investment in the convention centre is around Rs 2 billion.
The apartment units will be between 1-3 bedrooms, with combination options up to 5 bedrooms. Sanken Group planned to commence construction of the project by October this year, while aiming for competition by early 2021.
Meanwhile, Ceylon FT learnt that Sanken Group is also planning to build a business class hotel in Galle with a significant investment, while the Group has also submitted a proposal to Airport & Aviation Services (Sri Lanka) Limited (AASL) to establish and operate a star-class Airport Hotel at Bandaranaike International Airport.
Capitol Developers Limited of the Sanken Group is also currently constructing its landmark, high-end, 400-plus apartment twin-tower project, Capitol Twin Peak, with a US$ 180 million investment. The development is located on 24, Staple Street, Colombo 2, which is en route to occupation by end-2020.
According to Capitol Developers Limited officials, the developers have already presold about 45 per cent of units, as of last week. The developers said that there is increased interest in buying apartments these days, as the 15% VAT would come into effect for purchase of residential apartments after 1 April 2018. Hence, the presales rates are set to shoot up during this month.
According to Jones Lang LaSalle Incorporated (JLL) data, Colombo’s Grade-A office space real-estate market is forecasted to have an approximately 3.5 million square meter supply shortage this year, while existing Grade-A office spaces in Colombo have a high occupation level of 95 per cent and some have recorded 100 per cent. A similar supply shortage can also be observed in Colombo’s affordable housing market for middle- and low-income earners.