The government
has approved a US$ 900 million mixed development project to be developed in
Colombo on six acres of property owned by the Urban Development Authority (UDA).
A top official has made a statement involving an entity Shang Properties Ltd. Minister
for Investment Promotion, Keheliya Rambukwella, said the project would
initially invest US$ 500 million with plans to expand the project to US$ 900
million under the first phase. It will include apartments and office space and
will finish in six years.
"The very
first meeting of the Cabinet held after the establishment of the Government, approved
this project. We are now in negotiations to identify the concessions, and we expect
to start the project as quickly as possible," Minister Rambukwella told the
international media. According to the Board of Investment, the investment first
negotiated in 2017, and a deal was signed the following year.
The agreement approved
with Shang Properties Ltd., a joint venture with Kerry Properties Ltd., listed
in the Philippines', and Hong Kong and Shang Properties Inc., endorsed a
99-year land lease contract with the UDA, which was then under the Colombo 2
land parcel of the Megapolis and Western Development Ministry.
The BOI selected
the company after responding to a tender for the six acres of land near the
Beira Lake in the heart of Colombo from the former government. The company said
to have acquired the site at the time for a consideration of Rs. 12.8 billion
without taxes. The land plot located at Colombo 2 at Sir James Peiris Mawatha.
The company
planned to build on this site, a modern mixed-use development, but the project postponed
after tax and other allowances granted for BOI projects were not allowed as
expected by the company. The new government, which has placed the BOI under
President Gotabaya Rajapaksa, then gave the delayed project the go-ahead.
The company has
full faith in the potential of this project, given the strong demand for
premium property developments at prime locations in Sri Lanka. Taking advantage
of the exceptional quality that Kerry Properties and Shang Properties are continually
bringing to many prestigious areas in Asia, the company looks forward to
creating an ultimate living and business space on the Beira Lake.
Other
investments by the Kuok Group in Sri Lanka include hotels, one of which is the
Shangri-La Hotel, which opened in 2017, as well as luxury apartments and the
One Galle Face (OGF), the high-end shopping mall which opened last year. The
Group also runs a Hambantota Golf Resort.
OSL Take: The
agreement between Sri Lanka’s UDA and Shang Properties Ltd. to commence a
massive mixed development project in Sri Lanka indicates the overall growth
momentum in the island nation.
The move by the
cabinet of ministers to approve this project in Colombo is an indication of the
level of confidence in Sri Lanka’s growth potential where international
businesses are concerned. Other foreign business ventures could also explore
similar investment opportunities in Sri Lanka. Meanwhile, the mixed development
project, once completed, would also create investment opportunities for
potential businesses/investors.
VBS/AT/17022020/Z_TB2
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