SRI LANKA REAL ESTATE MARKET OUTLOOK REPORT 2023

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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 constantly changing, with new developments and constructions taking place. Factors such as the location, configuration and the number of bedrooms can affect the supply and demand. The asking price analysis for residential apartments provides an overview of average prices of apartments in different locations, giving an idea of current market trends. The management fee of residential apartments, demand for residential apartment sales and rentals, and foreign search traffic for residential apartment sales and rentals are also analysed. The rental analysis of residential apartments including the average rental price of apartments and year-on-year rental variance of apartments in demanded areas is also provided. The rental yield of residential apartments and their regional comparison is also provided. The government residential condominium projects, middle-income and affordable housing projects by UDA are also considered. Popular search areas by price for 2022 are also analysed for the investors’convenience.

The land market in Sri Lanka varies by region, with the Western province being a key area due to its high population and economic activity. The land price analysis provides an overview of average prices for land in different locations, giving an idea of the current market trends. The annual land price change in Sri Lanka and top price-appreciated cities in the western province are provided in the report. The land value appreciation rate vs land price, including the land value appreciation in the last five years, land value appreciation in 2021 vs 2022, and land value appreciation for most demanded cities in the Western province are also graphed. The prices of lands along Grade A roads and beachfront and cultivated lands are also analysed. The demand for land is also analysed, including search traffic, overseas search traffic and searches by land type.

The land market in Sri Lanka varies by region, with the Western province being a key area due to its high population and economic activity. The land price analysis provides an overview of average prices for land in different locations, giving an idea of the current market trends. The annual land price change in Sri Lanka and top price-appreciated cities in the western province are provided in the report. The land value appreciation rate vs land price, including the land value appreciation in the last five years, land value appreciation in 2021 vs 2022, and land value appreciation for most demanded cities in the Western province are also graphed. The prices of lands along Grade A roads and beachfront and cultivated lands are also analysed. The demand for land is also analysed, including search traffic, overseas search traffic and searches by land type.

Commercial office spaces are an important aspect of the real estate market in Sri Lanka. They are essential for businesses to operate and their supply and demand can indicate economic activity. The impact of the pandemic on office spaces is also discussed. Grade-A office spaces, considered to be of the highest quality, are in high demand. The commercial office space lease rates are provided to help businesses understand the costs associated with renting an office space. The lease rates vary based on factors such as the location, size, and amenities. These rates are an important consideration for businesses when looking to rent office space.

Retail mall spaces are a significant aspect of Sri Lanka's real estate market. They provide a place for businesses to operate and are a popular destination for shoppers. The supply and demand of retail mall spaces vary by location. Retail mall space lease rates are provided to help businesses understand the costs associated with renting a mall space. The lease rates can vary depending on factors such as the location, size, and amenities. Based on a field survey, retail mall market penetration is analysed, to provide an insight into the saturation of the retail mall market in Sri Lanka and how it may affect the demand for mall spaces.


Table of Contents

1.1 Macro-Economic Environment

1.1.1 Gross Domestic Production (GDP)

1.1.2 per Capita

1.1.3 Sri Lanka’s Debt and Composition of Reserves

1.1.4 Policy Interest Rates (CBSL)

1.1.5 Treasury Bill Rates

1.1.6 Commercial Banks’ Interest rates

1.1.7 Home Loan Interest Rates

1.1.8 Exchange Rates

1.1.9 Inflation Rate – CCPI

1.1.10 Imports and Exports

1.1.11 Real Estate Sector Contribution to the National Economy

1.2 Foreign Direct Investments (FDI)

1.2.1 FDIs to BOI Companies

1.2.2 Top 10 Foreign Direct Investors in Sri Lanka

1.2.2.1 Sectors invested FDIs and Economic Sectors

1.3 Population Stats

1.3.1 Population Growth

1.3.2 Population Density

1.3.3 Population (City Vs Urban)


2.1 House Construction Cost

2.2 Residential Housing Market Supply and Demand – Sales

2.2.1 Search Traffic in 2022

2.2.2 Most Searched Locations in Colombo for Residential Houses for Sale in 2022

2.2.3 Foreign Search Traffic for Residential House – Sales

2.2.4 Demand for Residential House for Sale by House Size

2.2.5 Demand for Residential Houses for Sale by Price

2.2.6 Locations Searched for Residential House for sale

2.3 Residential House Asking Price Analysis

2.3.1 Residential House Snapshot

2.4 Residential House Rental Market Supply and Demand – Rentals

2.4.1 Search Traffic in 2022

2.4.2 Foreign Search Traffic for Residential House–Rentals

2.4.3 Demand for Residential House for Rent by House Size

2.4.4 Demand for Residential Houses for Rent by Price

2.4.5 Locations Searched for Residential House for Rent in 2022

2.5 Residential House Rental Analysis

2.6 Rental Yield

2.7 Comparison of Residential Apartment Vs. Residential Houses


3.1 Residential Apartment Supply

3.1.1 Current Residential Apartment Supply by 2022

3.1.2 Overall Residential Apartment Distribution by 2025

3.1.3 Residential Apartment Supply by Location

3.1.4 Residential Apartment Bedroom Configuration

3.2. Residential Apartments Asking Price Analysis

3.2.1 Residential Apartments Regional Comparison

3.2.2 Year-on-Year Price Variance of 3-Bedroom Residential Apartments

3.2.3 Apartments Price Vs Aging

3.2.4 Average Unit Price of Residential Apartments Vs Distance from Colombo 01

3.2.5 Year-on-Year Price Variance of 3-Bedroom Residential Apartments in Demanded Areas

3.2.6 Residential Apartment Management Fee

3.3 Demand for Residential Apartments – Sales

3.3.1 Search Traffic Analysis for Residential Apartments – Sales

3.3.2 Foreign Search Traffic for Residential Apartments – Sales

3.3.3 Demand for Residential Apartments by Bedroom Category

3.3.4 Demand for Residential Apartments by Price

3.3.5 Locations Searched for Residential Apartments for sale

3.3.6 Demand for Residential Apartments by Apartment Size (Sqft)

3.4 Residential Apartment Rental Price Analysis

3.4.1 Average Rental Price of 3-Bedroom Apartment

3.4.2 Year-on-Year Rental Variance of 3-Bedroom

3.4.3 Residential Apartments in Demanded Areas

3.4.4 Demand for Residential Apartments – Rentals

3.4.5 Search Traffic Analysis of Residential Apartments – Rentals

3.4.6 Foreign Search Traffic of Residential Apartments in 2022 – Rentals

3.4.7 Demand for Residential Apartments by Bedroom Category

3.4.8 Locations Searched of Residential Apartments to Rent in 2022

3.5 Residential Apartment Rental Yield

3.6 Residential Apartments Rental Yield Regional Comparison

3.7 Government Residential Condominium Projects

3.7.1 The Residential Condominium Requirement and the Government Support

3.7.2 Completed Middle-income Housing Projects by UDA

3.7.3 Ongoing Middle-income Housing Projects by UDA – Colombo

3.7.4 Proposed Housing Projects for the professionals

3.7.5 Ongoing Affordable Housing Projects

3.8 Popular Search Areas by Price – 2022


4.1 Sri Lanka Land Distribution

4.1.1 Land – Western Province

4.2 Land Price Analysis

4.2.1 Annual Land Value Change in Sri Lanka

4.2.2 Top Value-Appreciated Cities in the Western Province

4.2.3 Land Value Appreciation Rate Vs. Land Price

4.2.4 Land Value in Colombo

4.2.5 Land Value Appreciation in the Last Five Years

4.2.6 Land Value Appreciation – 2021 Vs 2022

4.2.7 Land Value Appreciation for Most Demanded Cities in Western Province

4.2.8 Annual Land Value Change in Colombo District for the Last 5 Years

4.3 Grade A Roads and Land Values

4.3.1 A1 (Kandy Road) Land Value Movement

4.3.2 A2 (Galle Road) Land Value Movement

4.3.3 A4 (High-level Road) Land Value Movement

4.3.4 A8 Road Land Value Movement

4.4 Prices of Beachfront Lands and Cultivated Lands

4.4.1 Per Perch Prices of Beachfront Lands in 2022

4.4.2 Per Acre Price of Cultivated Lands in 2022

4.5 Analysis of Demand

4.5.1 Search Traffic for Lands

4.5.2 Foreign Search Traffic for Lands

4.5.3 Searches by Land Type

4.6 Government Lands Owned by UDA

4.6.1 UDA Lands to be Released for Investment Opportunities

4.6.2 Under-utilized Govt. Lands to be Released for Investment Opportunities


5.1 Commercial Office Spaces

5.1.1 Overview and Supply

5.1.2Supply of Commercial Office Space

5.1.3 Pandemic and Office Space

5.1.3.1 Requirements of the Grade-A Office Space

5.1.4 Commercial Office Space Lease Rates

5.2 Retail Mall Spaces

5.2.1 Overview & Supply

5.2.2 Retail Mall Space Supply by Location

5.2.3 Retail Mall Space Lease Rates

5.2.4 Retail Malls – Market Penetration