Real estate needs realistic changes

Anjana Samarasinghe

Local Real Estate industry needs to have a set of rules and standards for a realistic development in the sector, said Executive Director of Ceylinco Land Exchange Limited (CLE) Bhathiya Satharasinghe.

Today there is no control over real estate business in the country. This industry plays a vital role in the economy. In other countries real estate industry is governed through a set of rules and standards which enables them to predict what will be the value of a real estate property within three months time. In Sri Lanka we cannot exactly predict value of a real estate property where it will be after next three months time.

Bhathiya Satharasinghe at the launch Picture by Sumanachandra Ariyawansa

In the real estate business there should be a proper mechanism to calculate the return on investment that any buyer could have before they purchase any real estate property, he said.

In Sri Lanka only 10% to 20% urbanization being carefully monitored and done under proper methods. Though there are laws in the country there should be proper implementation of laws. Government should facilitate the industry with correct rules and standards, he said.

There is no apex body to represent private sector in the industry. Companies in the real estate business need to focus on establishing an association for the development of the industry and working close with the Government, he said.

The global economic crisis has badly impacted on local real estate industry. The current growth rate of the industry has been decline to 7 per cent where it was 20 per cent in last year. The high interest rates and less affordability have negative impacts on the demand, he said.

He also said that there are lack of real estate and valuation professionals in the industry. Only few graduates on this subject pass out every year from the universities and most of them do not have practical knowledge about the industry, he said.

Talking about the land prices of the country Satharasinghe said that land prices vary from place to place. When there is a high urbanisation price escalation of lands will be increased. Today we have noticed land prices are high in areas like Malabe and Kaduwela. Boralesgamuwa and Piliyandala, he said.

CLE has developed and completed more than 55 real estate projects in all parts of the country exceeding the value Rs 3 billion. Company also expects to commence 10 to 12 projects in next year.

CLE is expected to embark on Rs 2 billion township development project next year. Still we are in this process of finalising lands for the project.

Most probably this will locate in North of Colombo. We are planning to invite investors from Dubai and local investors for the project under our profit sharing scheme, he said.

CLE has introduced its latest real estate project “San Rose Park” in Piliyandala town to commemorate its 17th anniversary. Company also expects to introduce another housing project in Makola area.