Is Kurunegala the next investment hub in Sri Lanka?

While the capital city of Sri Lanka experiences drastic development, investment opportunities are turning out to be stagnant, especially for individuals. CBH Lands Chairman Yatila Wijemanne has been driving real estate investment in Kurunegala, which he strongly believes is the next investment hub that everyone should look out for. Here he shares his views on why real estate and how it will give potential investors an advantage:

Q: Why is this the best time to invest in real estate?

A common practice in Sri Lanka is to invest liquid assets in savings or fixed deposits. However, at present, in this prevailing low-interest-rate environment, funds held in banks provide negative returns, as they offer only 4% per annum, while the actual inflation is around 6.7%. Thus, one receives a negative return of about 2.7% minimum per annum by holding funds in the bank. Therefore, it is very important that you invest cleverly, and real estate, if selected carefully, offers the best returns. 

The key is to identify where one should invest in real estate, and choose an opportunity that will provide the highest amount of return as a percentage. Furthermore, the climate is conducive for real estate investment because home and land loans offer low-interest rates in the short and long run.

Q:  What are the advantages that real estate would give you, in comparison to any other investment avenues?

 Throughout generations in Sri Lanka, land ownership has been held in high regard. It has given self-esteem and empowerment to the owners and created a sense of power. Capitalising on land is the best investment, no matter where you are in the world. It is a strong hedge against exchange rate fluctuations, inflations and negative returns.

The local banking system recognises real estate as the most secure collateral to lend money as well. Land gives the owner the ability to utilise it for a variety of requirements; residential, construction, leasing, agriculture or even as a tool to raise funds from banks. Therefore, real estate gives the best return for one’s investment, which surpasses inequities. 

Q:  How has the general perception of investment changed since the onset of the pandemic?

 Prior to the pandemic break out, towards the latter part of 2019 and early 2020, the general perception towards investment witnessed a shift. This was influenced by the reduction in interest rates and the lowering of taxes. This prompted farsighted investors to move towards real estate and equities. 

At the onset of COVID-19 and the ensuring first lockdown, there was a gradual reduction in investments, due to obvious reasons such as volatility in the market. However, as society eased into the new normal, investment began to increase substantially. Real estate has enjoyed strong growth in investment despite the intermittent lockdowns and travel restrictions.  This only shows that investors have approached the pandemic situation in an aggressive drive. 

Q:  What does CBH Lands have to offer to potential investors, and what would make that investment different from competitors? 

Unlike any other land developer, we have invested strongly in creating a proper database that equips us to provide the best land plots to our clientele. CBH Lands operates based on a strategic formula that we use for land selection. This is built by our dedicated research-based intelligence unit. We operate within the Kurunegala District, which gives our team an added edge of specialisation within the geographic area. As they are trained extensively on Kurunegala, our clients meet some of the best in the business, who can consult and guide them on their investment. 

For CBH Lands, a sale is not a mere land sale. We focus on providing land which will give you a solid return, and thus can be compared to any financial tool of investment, such as a fixed deposit or equity. The potential for re-sale is highly important to us as we understand the different objectives of clients who invest in real estate.

There are instances where CBH Lands handles the re-sale of our own clients, or when we invest back in a property from a client. Pricing for us is about transparency and what we can genuinely provide our clients; you will get a fair price and not a high price. This is mostly maintained because the CBH team gets personally involved in the selection of land plots for each of our clients. 

We take a 360-degree approach to servicing our clients beginning with land selection. Each step of the investment from legal clearance, development of the land, obtaining all necessary approvals, providing financial advice until the sale, followed even towards re-sale, is handled with equal care and attention to our clients’ needs. We strictly adhere to proper processes, and our hands-on approach based on well-informed and well-researched formula enable us to provide the best for our clientele.

Q:  Your land portfolio is highly concentrated in the Kurunegala District. What strategic value does this bring for a potential investor?

 Kurunegala is a central hub when it comes to investment. One of the most important developments is the Central Expressway, which is currently under construction. Kurunegala is the only district in the entire island that will have access to five entry/exit points to this expressway. This brings an invaluable advantage for those who invest in Kurunegala since the opportunities for logistics and industry is growing fast. 

In addition, Kurunegala is the only district where a real estate developer requires a license to operate, ensuring high quality control and the need to be thorough with the land and the operation of the business, which we at CBH Lands possess. Therefore, the highest percentage return on investment in real estate will be brought through our developments in Kurunegala.

Q:  In your opinion, why have your clients chosen CBH Lands throughout the last five years?

 As mentioned before, we invest a substantial amount in our research, so that we get our data right. We spend a large amount of our resources on our intelligence unit, and the knowledge we obtain on the real estate market through this, from demography to geography, gives us an edge from which our clients in turn benefit. We are geared to provide insightful information in comparison to many other developers. 

Further, we hold transparency and integrity with the utmost regard and this has ensured that we maintain a very loyal clientele, as well as obtaining leads through referrals. Our expert team continuously analyses numerous financial tools and models that we feel will benefit the market. This added knowledge also brings an advantage when we consult potential buyers. 

Q:  What individual projects are available through CBH Lands at present?

 All CBH projects are located within the grid in close proximity to expressway entry and exit points. The current projects are located in Kurunegala, Narammala and Malsiripura, all of which are key areas on the Central Expressway entry and exit points. Therefore, the customer has been empowered with a very unique selection process. 

Q:  What are some of the potential future expectations for the real estate industry that you see at present?

 Based on the current growth and the forecasted growth, land prices in Sri Lanka will only continue to increase substantially. Further growth as a percentage of investment will be prominent in selected boom pockets, of which the Kurunegala District will play an essential role.

With the development that is taking place, especially around the expressways, Sri Lanka is experiencing demographic shifts and more and more people are prone to look for affordable and accessible investment opportunities, together with stability, which only real estate can provide. The long-term sustainability in real estate investment and the value additions that can be created around it make it the best decision one can make for the future.