Colombo Land to sell 36.8 perches of Liberty Arcade for Rs. 640 m

Colombo Land and Development Company PLC is to sell 36.88 perches of Liberty Arcade Property for Rs. 640 million.

The company last week signed an agreement to this effect with Seeview Property Developers Ltd., of Meewella Holdings.

The deal is subject to the fulfillment of the terms and conditions set out in the agreement on or before 31 January 2022. Liberty Arcade Property is adjacent to Liberty Plaza, with three floors plus a rooftop, and offered food and beverage, and shopping experiences. 

Colombo Land, which owns Liberty Plaza, saw a very challenging third quarter due to disruptions that occurred as a result of the pandemic situation prevailing in the country, with over 45 days of lockdowns and direct business interruptions, whilst mall operators faced extended restrictions. As a result of these adverse conditions and restrictions, the company recorded a loss.

Overall, the group recorded a revenue of Rs. 68.52 million (YOY - 43%), a Gross Profit of Rs. 45.75 million (YOY - 48%) and a Loss After Tax of Rs. 40.76 million for the quarter ended 30 September.

First nine months’ revenue was down to Rs. 259 million from Rs. 327 million a year ago and loss was Rs. 60.5 million as against a profit of Rs. 23 million.

During the quarter, special rent waivers and rent reductions were granted to the tenants due to the pandemic situation. Additionally, occupancy dropped to 65% as at the end of the third quarter against 73% recorded in the corresponding quarter. Overall, the rental income for the third quarter dropped by 43% when compared to the corresponding quarter in the previous year. Overall revenue from car parks during the third quarter dropped by 47% when compared to the corresponding quarter of 2020 mainly due to limited operations of the car parks as a result of the pandemic situation.

During the quarter under review, the company successfully restructured its debt with banks and financial institutions of approximately Rs. 1.9 billion at a favourable interest rate.

The increase in the finance cost in the first nine months of the financial year (to Rs. 159 million from Rs. 138 million) is due to the one-off payment made in relation to transferring the liabilities and early settlement charges. “With economic activities returning to normalcy, retail traffic is expected to increase during the upcoming festive season. We will continue to improve the standards of our properties in order to add value to our occupants, customers and the company,” Colombo Land Director and Group CEO Paddy Weerasekera said in his review accompanying the interim results.