Are Apartment Developers Moving to the Suburbs?
With Colombo city turning into a business hub more than a residential area, recent studies of LankaPropertyWeb (LPW) show that apartment developers are now exploring the suburbs to cater to the growing interest for vertical living amongst the locals. The numerous developments taking place in the main city resulting in diminishing space amongst houses for rent in Colombo and reducing demand for houses for sale in Colombo has in fact contributed to this interest largely.
The rising population in the country and the changing lifestyles of people has also further influenced the number of apartments for rent and condominium construction taking place in the city. However, over the years such constructions taking place within the inner city of Colombo (i.e. Colombo 1-15), has continued to decrease in number.
Condominium projects from 2014 – 2019
According to the data gathered by the Condominium Management Authority (CMA), from 2014 to 2016 there is an increase in condominiums in Colombo. But from 2017 onwards an obvious reduction is seen. Apartment constructions in the other districts are following a downward slope as well. However, in the greater Colombo areas like Sri Jayawardena Pura Kotte, Mount Lavinia, Rajagiriya, etc. that exclude Colombo 1-15, a continuous rise in complex constructions has been witnessed.
Commenting on this Daham Gunaratna, Managing Director of LankaPropertyWeb says “The main reason developers are moving out of Colombo could be the cost of construction in Colombo (mainly driven by high land value) and thus the price of apartments going up.”
The opening of Sethsiripaya in Battaramulla by the former President Mahinda Rajapaksha in 2012, brought about plans to shift government offices into the administrative hub of Sri Jayawardenapura Kotte while leaving Colombo city for business affairs. As a result, now the 13 story building houses the Ministry of Transport and Civil Aviation, Ministry of Housing, Construction and Cultural Affairs, Ministry of Higher Education and Highways, etc. This has brought numerous improvements in terms of administration and service to the public.
Many development projects have also been directed towards uplifting the standard and infrastructure in the greater Colombo areas and the Western region on the whole. Introduction of the Western Region Master Plan 2030 that includes the construction of the Light Rail Transit system from Malabe to Fort with 16 stations, the Tech City Development Project directed in Malabe, Athurugiriya, Kaduwela and Homagama areas, creation of the Airport Business City, the BIA Gateway Project are some constructions expected to take place within the next ten years.
The Kottawa – Makumbura Multi-Modal Transport Hub which was opened in April of this year to the public, is one other development project that was taken up to improve the transport system in the greater Colombo areas.
Price changes in land in the greater Colombo areas 2018 – 2019
Based on the data of CMA on land price changes, over the quarters of the past year and this year, the changes in land prices are higher in the greater Colombo areas of Nawala, Kalubowila, Dehiwala, and Rajagiriya. Meanwhile, there is an evident hike in land for sale in Colombo 3, given the many developments taking place. However, the prices of the other areas of Colombo aren’t rising as high as the greater Colombo areas.
Comparing this rise in land prices in greater Colombo with the increasing condominium constructions in these areas, the interest of condominium developers is justified quite obviously.
Floor area in condominiums from 2014 -2019
A reducing floor area space amongst apartments in Colombo and an increase of it in the greater Colombo areas shows that the latter are turning out to be more spacious than those in the main city.
Many established and recognized private universities are also increasing in number in the greater Colombo areas. This has created an access to education in these areas equally if not more available in quality and standard as the main city of Colombo.
Improvements in infrastructure, transport facilities, education and many more taking place in the greater Colombo areas, has developers now realizing the opportunities available for them. As a result, an increase in condominium construction in the greater Colombo areas is speculated within the near future!