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Although developed countries in the world have succeeded with urbanisation, South Asian countries have struggled to make the most of the opportunity urbanisation provides them to transform their economies to join the ranks of richer nations in both prosperity and liveability
By Real-estate Intelligence Unit (RIU), Sri Lanka
Sri Lanka has the proud heritage of being a developed nation since ancient times. It is believed that even before recorded history of 2,500 years, there existed developed cities with proper infrastructure such as Anuradhapura and Polonnaruwa with many aspects of urban development.These cities sustained their existence over a period of 14 centuries.
However, urban development in the post-independence era has been less impressive, typically stretching out along the main truck routes into the capital in the form of low-rise vertical developments that are an eyesore at best.Moreover, lack of town planning and vision is currently leading to externalities such as rising levels of traffic congestion, a poor public transport system, a scarcity of public open spaces and air pollution. According to a report released by an international research agency in 2011, Colombo was listed amongst one of the worst cities to live in.
Urbanisation is a well-known term in the world, relating to the fact that a considerable percentage of the population lives in metropolitan areas. Higher education, work opportunities, recreational facilities and access to better health care are major drivers of this trend. As the global population continues to grow at a steady pace, more and more people are moving to cities every single day. Since the days of the industrial revolution, cities have been the engines of economic growth.
Although developed countries in the world have succeeded with urbanisation, South Asian countries have struggled to make the most of the opportunity urbanisation provides them to transform their economies to join the ranks of richer nations in both prosperity and liveability. SriLanka is also currently facing the same dispute in cities like Colombo, Kandy, Gampaha, Galle, etc. Difficulty in dealing with the pressures that urban populations put on infrastructure, basic services, land, housing and the environment are the major issues faced by SriLankan cities.
Bringing smart to the market
When considering the SriLankan context the public seeking for a better lifestyle move to the Colombo city since it’s the capital city of SriLanka. The city offers more employment opportunities, higher education, recreational facilities and more sophisticated life style. Due to the higher amount of migration from rural areas to the city, the authorities are unable to provide necessary services to them. Another visible consequence is the rising traffic congestion increases within the city that has its own economic cost due to the callable amount of time wastage on roads.
As a remedy for the above mentioned issues, countries in the world context have identified different models and concepts. A smart city is one of the concepts which is gaining in popularity in most countries presently, but not all, including Sri Lanka have managed to practically implement the concept.
There is no unique definition for the smart city. The interpretations and definitions used by different interest groups, stakeholders and regions vary. Indeed, if we Googlethe term “smart city”, we can find more and more results about: city sustainable initiatives, institution road-maps to enhance green growth and quality of life, the usefulness of ICT infrastructures, the involvement of citizens in public life, the need to reduce digital divide, and so on. However, constructing a comprehensive definition of a smart city is yet to be achieved. A major hurdle in identifying such definition is the ambiguity of meanings attributed to the word “smart” and to the label “smart city”.
“A smart city is a city well performing built on the ‘smart’ combination of endowments and activities of self-decisive, independent and aware citizens” (Giffinger, 2011)
Enter the Megapolis
The Western Province Megapolis plans of the Government have identified a major projects that will serve towards developing a smart nation. The services and facilities to be provided through the city infrastructure development project entitled smart nation is outlined in two categories.
1. Smart citizen services
2. Smart government
German engineering giant Siemens has already signed a MoU with the Megapolis Ministry to develop smart city solutions for Sri Lanka.The Ministry is in charge of discovering solutions to address challenges related to garbage, housing of shanty dwellers and drawing new traffic plans to avoid traffic jams in busy towns. The Ministry also plans to develop new cities in Bandaragama, Kadawatha, Kottawa and Kerawalapitiya that will be soon under construction as a part of the Megapolis development plan.
Navigating the unknown
Following a good year for the real estate industry in 2015, this year has witnessed the entry ofmore developments in the market that have served to further strengthen the underlying positive sentiments that are associated with this asset class.Luxury apartments have continued to mushroom in all parts of Colombo city as well as in the suburbs and have been met with good demand at the upper-mid range levels whilst the alternative business model offered by Commercial property development has also lured many investors into this market segment.
However, the long-term success of the industry will depend on how well Sri Lanka moves towards a nation of smart cities.Exciting times await with the Port City set to get into gear whilst the Government’s long-term objectives envisioned in the Megapolis plan has also started to unravel.As such, Sri Lanka remains to be on course for steady growth in all real estate market segments with some geographic areas benefiting greatly from new transport infrastructure projects.
Whilst location remains the perennial primary factor for any new project, a sensible assessment of the market in terms of price, identification of target groups and demand growth corridor along with a risk assessment is now more important than ever given the dynamic infrastructure development setting and rising competition in the industry.
(Since 2003, RIU has been monitoring the real estate market in Sri Lanka.With the RIU regional office based in Colombo for the past 14 years, it is the first company in the island to specialise in producing reports and consulting that leverages our local and international expertise on real-estate market commentary and forecasting.The RIU annual Sri Lanka Market Report 2016, now into the 11th edition, continues to closely monitor the Sri Lankan market by using a wide range of research tools to capture primary data and market intelligence.For more information:[email protected] www.riunit.lk.)
