Gelle Force Wins In Sri Lanka

From the ashes of the civil war, a little shaken, a little stirred Sri Lanka is still finding its footing in the real estate industry.

- Al Gerard De La Cruz

Ten years after the civil war ended in Sri Lanka, the island nation still reckons with turmoil: something witnessed in devastating fashion on Easter Sunday when suicide bombers killed hundreds in a series of coordinated attacks on churches.

Those attacks sent shockwaves around the world and added to a sense of crisis in the island nation, which, of late, has been embroiled in political intrigue and mired in economic woes.

In October, Sri Lankan President Maithripala Sirisena ousted Prime Minister Ranil Wickremesinghe in a months-long constitutional crisis that undercut investor confidence, downgraded the country’s credit ratings, and fomented foreign capital outflows.

This year, the country owes almost USD6 billion in foreign debt repayments—record obligations that come immediately on the heels of a year in which the Sri Lankan rupee dropped 16 percent, one of Asia’s worst-performing currencies then.

The property market is suffering amidst the political standoff. Reports by professional services firm KPMG Sri Lanka reveal the depreciation of the rupee raised the dollar-denominated cost of high-end condominiums by around 20 percent toward the end of 2018. Some developers also claimed monthly condo sales sinking to just one to two units on average, down from eight to nine.

Today the prime residential segment grapples with absorption issues while middle and affordable segments are seeing sustained demand, according to Nirmal de Silva, director and CEO of Paramount Realty.