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SRI LANKA REAL ESTATE MARKET OUTLOOK REPORT 2024

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Report Summary

Sri Lanka's GDP, GDP per capita, debt and composition of reserves, policy interest rates, and foreign direct investment are key indicators of the country's economic performance. These factors, along with imports/exports, the real estate sector's contribution, exchange rates, and inflation, provide insight into the country's economic prospects. Population statistics, including population growth, density, and the breakdown between urban and rural populations, are also important to consider when analyzing the country's economic performance and aligning real estate investment strategy.

The supply of residential apartments in Sri Lanka is dynamic, with ongoing developments and construction projects. Factors such as location, configuration, and the number of bedrooms significantly influence supply and demand. Analyzing asking prices for residential apartments across various locations provides insights into current market trends. Additionally, management fees, demand for sales and rentals, and foreign search traffic for these properties are examined.

The rental analysis includes the average rental prices of apartments and the year-on-year rental variance in high-demand areas. Rental yields and regional comparisons are also provided. Government-led residential condominium projects and middle-income and affordable housing initiatives by the UDA are considered. For investor convenience, popular search areas by price for 2024 are also analyzed.

The supply of residential houses in Sri Lanka is continuously evolving, with new constructions and developments taking place regularly. Factors such as location, size, and design significantly impact the supply and demand for houses. Analyzing asking prices for residential houses across different locations offers insights into current market trends. Additionally, the demand for house sales and rentals, as well as foreign search traffic for these properties, are key metrics analyzed.

The rental analysis includes average rental prices for houses and the year-on-year rental variance in sought-after areas. Rental yields and their regional comparisons are also examined. Popular search areas by price for 2024 are also analyzed to assist investors in making informed decisions.

Commercial office spaces play a crucial role in Sri Lanka's real estate market, providing essential infrastructure for business operations. The supply and demand for these spaces are indicative of economic activity, and the impact of the pandemic on office spaces is also discussed. Grade-A office spaces, known for their high quality, are particularly sought after. Information on commercial office space lease rates is provided, helping businesses understand the costs involved in renting office space. These rates vary based on factors such as location, size, and amenities, which are key considerations for businesses seeking to lease office space.

Retail mall spaces are another important segment of Sri Lanka's real estate market. They offer venues forbusinesses and attract shoppers, with supply and demand differing by location. Retail mall space lease rates are detailed, providing businesses with insights into the costs of renting mall space. These rates can vary based on location, size, and available amenities. Additionally, a field survey analyzes retail mall market penetration, shedding light on the saturation levels in Sri Lanka's retail mall market and its potential impact on the demand for mall spaces.

The land market in Sri Lanka varies significantly by region, with the Western Province being a key area due to its dense population and robust economic activity. An analysis of land prices across different locations provides insights into current market trends. The report includes data on annual land price changes in Sri Lanka and highlights the cities in the Western Province with the highest price appreciation.

Graphs illustrate the land value appreciation rate versus land price, covering the past five years, and comparing 2022 to 2023. They also show appreciation rates for the most in-demand cities in the Western Province. Additionally, the report examines land prices along Grade A roads, beachfront properties, and cultivated lands.

The demand for land is also analyzed, including metrics such as search traffic, overseas search traffic, and searches by land type, offering a comprehensive view of market dynamics.

The Urban Development Authority (UDA) in Sri Lanka is essential for urban planning and development, focusing on sustainable and well-planned urban environments. It oversees residential, commercial, and mixed-use projects, ensuring they meet regulatory standards and support national development goals.

Key initiatives include infrastructure development, public space enhancement, and affordable housing projects. The UDA revitalizes urban areas, fosters economic activity, and attracts investments through effective land use planning and zoning.

Collaborating with local authorities, private developers, and international agencies, the UDA implements projects that improve urban living standards. Notable efforts include government residential condominiums and affordable housing schemes, contributing to vibrant and inclusive communities across Sri Lanka.

Port City Sri Lanka is a transformative urban development project in Colombo, aimed at creating a modern, planned city with residential, commercial, and recreational spaces. Designed to attract international investments, it features financial districts, luxury residences, hotels, malls, and entertainment facilities, boosting tourism and economic activity.

Emphasizing sustainability, Port City includes green spaces, efficient transportation, and smart city technologies. This project is a collaboration between the Sri Lankan government and international partners, enhancing Colombo's global business status and improving residents' quality of life. Once completed, it will significantly boost the nation's economy and offer vast opportunities.

Hotels and tourism in Sri Lanka are integral components of the country's economy, driving economic growth and employment. The sector offers a diverse range of accommodations, from luxury resorts to budget-friendly guesthouses, catering to a broad spectrum of travellers.

Sri Lanka's tourism industry highlights the country's rich cultural heritage, scenic landscapes, and biodiversity. The sector is supported by government initiatives to promote sustainable tourism practices and improve infrastructure. Hotels and tourism in Sri Lanka are vital for generating foreign exchange earnings and fostering socio- economic development in local communities. The industry continues to evolve, adapting to global trends and expanding its offerings to meet the diverse needs of travellers worldwide.


Table of Contents

  1. Real gross domestic production

  2. Rates & indicators

  3. Imports and exports

  4. Sri Lanka’s foreign direct investments and debt at a glance

  5. Population & population growth


  1. Supply of condominium units

  2. Search traffic of residential apartments

  3. Residential apartments secondary Market asking price analysis - sales

    1. Price analysis by category

    2. Year on year price comparison

    3. Demanded locations for residential apartments for sale in the Colombo district

    4. Average unit price of residential apartments vs distance from Colombo 01

    5. Demanded areas in Colombo 1-15 and Colombo suburbs

    6. Management fee

  4. Residential apartments secondary market asking price analysis - rentals

    1. Price analysis by category

    2. Demanded areas in Colombo 1-15 and Colombo suburbs

    3. Demanded locations for residential apartments for rent in the Colombo district

    4. Rental yield

    5. Regional comparison

  5. Outlook


  1. Construction cost

  2. Search Traffic of Residential Houses

  3. Residential Houses Secondary Market Asking Price Analysis - Sales

    1. Demanded areas in Colombo 1-15 and Colombo Suburbs

    2. Demanded Locations for Residential Housing in the Western Province

  4. Residential Houses Secondary Market Asking Price Analysis - Rental

    1. Demanded areas in Colombo 1-15 and Colombo Suburbs

    2. Most Demanded Areas for House Rentals in the Western Province

  5. Rental Yield


  1. Major duties and functions of the Urban Development Authority

  2. One Stop Unit (OSU)

  3. Real estate investment

  4. Real estate investment models


  1. LPW land price index

  2. Annual price variation

  3. Search traffic for land

  4. Asking price for lands in the suburbs of Colombo

  5. Most demanded cities in the Western Province

  6. Land price trends along Class A roads in the Western Province

  7. Price per acre for cultivated lands

  8. Agricultural crop yield

  9. Asking price per perch for beachfront lands


  1. Commercial Office Space Supply

    1. Demanded Locations for Commercial Spaces

    2. Lease Rates

  2. Commercial Retail Mall

    1. Lease Rate of Commercial Retail Malls


  1. Economic Contribution of Tourism

  2. Types of Accommodation

  3. Government policies and initiatives affecting tourism development in Sri Lanka


  1. A Gateway to Global Business

  2. Tax Incentives

  3. Sector-Specific Regulations and Investor Confidence

  4. Sri Lanka’s Strategic Geographical Advantage


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