Sri Lanka Scaling New Heights

Tracking Real Developments Across Real EstateAugust 2014

Sri Lanka - Scaling New Heights

Sri Lanka - Scaling New Heights2

Sri Lanka - Scaling New Heights 3

Strong fundamentals reignite high growth

After a brief slowdown in 2012 due to external uncertainties, the USD 59 billion Sri Lankan economy bounced back during 2013. Supported by increased domestic demand and improved exports and tourism, the GDP growth accelerated to 7.3% in 2013 from 6.3% in 2012. Furthermore, strong economic fundamentals, including a vibrant financial services sector and the ease of doing business in the country, aided the quick recovery. In addition, the high human development index in the country1 will continue to catalyse Sri Lankas economic growth.

To improve productivity in the long term and have stable economic progress, Sri Lanka is proactively investing in various infrastructural projects, from improving transport networks to telecommunications and electricity generation. This has resulted in the construction sector steadily increasing its stake in the Sri Lankan GDP from 7.6% in 2009 to 10.3% in 2013.

Figure 1: GDP by sector, Source: CBSL

2009

8.0%8.2%

7.3%

10000

8000

6000

4000

2000

02010

Services

Industry (excl Const.)

Agriculture

Construction

GDP Growth

2011 2012 2013

GDP

Grow

th

in LK

R Bi

llions

9.0%

8.0%

7.0%

6.0%

5.0%

4.0%

3.0%

2.0%

Sri Lanka GDP by Sector

3.5%

6.3%

10.3%

7.6%7.6%

7.8%9.4%

Note 1 - Sri Lanka ranks as a high human development country, according to the Human Development Report 2013


As part of the Colombo Port expansion project, the south container terminal was

completed in 2013 and the east container Terminal is expected

to be completed in 2014.

Several other projects including the York Street

facelift, the Fort Railway Station modernisation, the Marine Drive

expansion, as well as the mass transit systems such as metro rail and monorail are proposed, thereby

quietly enhancing real estate values within the city.

Phase I of the 29.2 km long Outer Circular Highway

completed in early 2014. This four-lane highway passes through Colombo and Gampaha and has a provision for future expansion to six lanes. Phase II and Phase III are likely to commence

operations in 2016 and 2017, respectively.

The Beira Lake restoration project consists

of diverting the sewerage network around Beira Lake and relocating

unauthorised housing. This project will not only increase the scenic beauty of the

lake, but is also expected to increase the potential benefits to the city in

the areas of water transport, recreation and sports.

The 25.8 km long Colombo-Katunayake Expressway

from the New Kelani Bridge to Katunayake at a project cost of around

USD 292 million.

The Bandaranaike International Airport

expansion project is underway to expand the capacity for arrivals and

departures. By the year 2017, 8 gates, 14 aerobridges, an aircraft parking apron and a taxiway, as well as the modernisation of utilities such as water supply, electricity

and waste water disposal are scheduled to be completed.

Colombo, the largest city and the commercial capital of Sri Lanka, is at the forefront of infrastructure activity in the country. Some of the key infrastructure projects that were completed recently or are under development in and around Colombo include:


Colombo 11

Colombo 02

Colombo 09

Colombo 14

Colombo 13

Colombo 12

Colombo 15

Colombo 10

Colombo 08

Colombo 07Colombo 03

Colombo 05Colombo 04

Colombo 06

Colombo 01

110113

12

14

15

09

1002

07

08

03

0504

06

Peliyagoda

Wattala

Sri Jayawardenepura Kotte

RajagiriyaMalabe

Dehiwala - Mount Lavinia

Nugegoda

Since 2009, improved confidence in the investment market has triggered an escalation in property values. Apart from infrastructure projects, an increased migration towards Colombo2 (both from the rural areas and outside the country) and a desire to own a property in the city are raising real estate values.

The interest in acquiring land within the central and secondary submarkets has increased steadily due to limited availablity of land in the city. In the first half of 2014, Colombo witnessed around 5% increase in land prices on an average, while select locations within the central and secondary submarkets saw faster growth in land prices at around 7-8% since end of 2013.

Figure 2: Land Prices, Source: JLL Research, 2014, Note: One perch = 272.25 sq ft, Land prices are subject to various factors including land size, road width etc. Minimum land rate in suburbs submarket can vary and are highly subjective.

SubmarketsLKR Mn per Perch USD per sq ft

Min Max Min MaxCentral - Colombo 1, 2, 3 5.5 12.5 155 353Secondary - Colombo 4,5, 6,7, 8, 9, 10 2.0 9.0 57 254Secondary North - Colombo 11, 12, 13, 14, 15 0.7 10.0 20 283Suburbs - Rajagiriya, Dehiwala, Nugegoda, Moratuwa, Wattala, Peliyagoda, Kiribathgoda and their neighbouring locations - 4.0 - 113

Figure 4: Colombo Map, Source: JLL Research

Floor Area Ratio

Land Extent (sq mt)

Min Road Width (m)

Max. permissible

FAR

150-250 < 12.2 1:2.5

150-250 12.2 1:3.0

250-400 12.2 1:3.5

400-500 12.2 1:4.5

500-700 12.2 1:5.0

500-700 15.0 1:5.5

700-900 15.0 1:6.0

900-1,000 15.0 1:7.0

900-1,000 22.0 1:7.5

1,000-1,500 22.0 1:8.0

1,500-2,000 22.0 1:9.0

1,500-2,000 24.0 1:9.5

2,000-2,500 24.0 1:10.0

2,500-3,000 24.0 1:12.0

3,000 and above 24.0 Unlimited

Figure 3: Floor Area Ratio, Source: City of Colombo Development Plan - 2008, Note 2 - Refer to Figure 14


Colombo residential market - The investors home

Despite an attractive floor area ratio (FAR) regime, increasing construction costs for high-rise buildings and high borrowing costs have led to apartment prices being unaffordable. As a result, the apartment market is largely restricted to only high-income-earning resident Sri Lankans (RSLs), non-RSLs (NRSLs) and foreigners.

Apartment cost in different submarkets in Colombo:

Price Range - LKR/Sq ft (USD/Sq ft)

Sub-Markets

Suburbs

Secondary North

Secondary

Central

16,000-25,000 (123-192)

18,000-28,000 (138-215)

22,000-30,000 (169-230)

26,000-35,000 (200-269)

Upper-Mid

12,000-16,000 (92-123)

12,000-18,000 (92-138)

12,000-22,000 (92-169)

N/A

Lower-Mid

Less than 12,000 (92)

Less than 12,000 (92)

N/A

N/A

Affordable

N/A

N/A

30,000-50,000 (230-384)

35,000-45,000 (269-346)

Luxury

Figure 5: Apartment cost, Source: JLL Research

Figure 6: Interest rate on Housing loans, Source: Annual Report 2013, CBSL and JLL Research

Interest Rates on Lending for housing purpose (%) 2012 2013 1H14

National Savings Bank 14.0-15.5 14.0-15.5 13.5-14.5

State Mortgage and Investment Bank 17.0-19.0 12.7-17.5 13.0-13.5

Benchmark Interest rate 7.5 6.5 6.5


Developers target the NRSL community

High project construction costs limit margin for developers to build affordable housing projects. Therefore, private developers concentrate on high-margin luxury and upper-mid projects within the city. Moreover, as NRSLs and foreigners are investing in the country with an increased interest, the demand for such high-end products is on the rise.

In addition, the preference of foreigners, NRSLs and high-net-worth (HNW) RSLs to stay close to the CBD has supported the demand for luxury residences. Sri Lankans who have been living abroad have started to return since the end of the civil war, and this wealthy section of the population demands luxury/upper-mid segment residences.

It is important to mention that workers remittances from abroad have become a steady and reliable source of income for Sri Lanka. Workers remittance grew by 7.1%, from USD 5.9 billion in 2012 to USD 6.4 billion in 2013. According to the Sri Lanka Bureau of Foreign Employment, more than 4.2 million workers departed for foreign employment between 1990 and 2012. Considering the reverse migration, we estimate that at least 2.5 million Sri Lankans currently work abroad and along with those who have returned to the country, form the prime target for selling residential properties in Colombo.

Figure 7: Workers Remittances, Source: CBSL Annual Report

2009

7,000

6,000

5,000

4,000

3,000

2,000

1,000

02010 2011 2012 2013

Workers Remittances (USD Million)

Middle East Europe Rest of Asia Americas Others


Investing in the Sri Lankan residential real estate market

Apart from the NRSL community, foreign individuals and institutions are showing an increased interest in the Sri Lankan real estate market. However, foreigners cannot purchase land in Sri Lanka, but they can purchase an apartment that is on or above the fourth floor. This rule restricts foreigners to gain 100% access to the land.

Figure 8: Investing in Sri Lankan Residential Market, Source: JLL Research

Investment in Residential Real Estate

Individuals / Institutions

Individuals / Institutions can lease Land up to 99 years

Investment in land is prohibited

Investment in Condominium is allowed only in apartments that

are on or above Fourth floor

LeaseholdFreehold

By Foreigners By Citizens

No restriction to invest in Land / Condominiums


Rate of Construction Progress = Sales Velocity rule is universal

Although we foresee the reverse migration trend and investments by NRSLs and foreigners continuing, the market for the luxury and upper-mid segment housing is limited. Hence, we expect not more

Project Name Location Developer Completion Year Total Units Quoted rate (USD/sqft)

Destiny Residency Slave Island Imperial Builder 2017 205 > 231

7th Sense Colombo 07 John Keells 2015 65 > 385

The Elements Rajagiriya Fairway Holdings 2016 132 > 154

Belvedere Kotahena Keppel CT Developments Ltd 2018 260 > 280

Altair Beira Lake South City Projects 2017 224 > 326

110 Parliament Road Rajagiriya Apurva Natvar Parikh group 2014 188 > 180

Project Name Location Developer Completion Year Total Units Quoted rate (USD/sqft)

Waterfront Glennie Street John Keells 2018 231 > 330

Astoria Duplication Road AVIC 2018 350 > 260

Colombo City Centre Beira Lake Silver Needle - Abans 2018 182 TBA

Shangri-La Galle Face Shangri-La 2019 TBA TBA

Some of the prominent projects that are under development in the luxury and upper-mid segments include:

Figure 10: Prominent upcoming residential projects in Colombo, Source: JLL Research

Figure 9: Prominent residential projects in Colombo that are under development, Source: JLL Research

Given the limited market for upper-mid and luxury projects, around 3,300 luxury and upper-mid units have been supplied since 2005. Similar to other emerging markets, Colombo also records higher sales velocity in projects that are close to completion. Of the 3,300 units,

only 1,450 units were completed, and 98% of completed units have been sold; whilst only 57% have been sold in the projects that are under construction. Therefore, developers are required to speed up construction to clear unsold inventories.

than 500 housing units in this segment to be absorbed annually for the next three years, with a high level of absorption in the ready-to-occupy and near-completion projects.

Some of the proposed projects in the luxury and upper-mid segments:


How affordable is Colombo?

High project development costs coupled with the high borrowing costs for housing loans have breached affordable limits and restricted the home buying prospects for Sri Lanka. Based on our understanding from the affordability assessment, only the top-income-earning resident Sri Lankans can buy homes in Colombo. Residents with limited income are forced to opt for properties that are at least 20-25 km away from the city limits. Majority of the apartment projects in the central and secondary submarkets rely only on investments from HNW RSLs, NRSLs and foreigners.

Assumptions and methodology

Affordability is calculated based on the house price to annual income ratio. If the ratio is less than 5:1, then the property is affordable. The income segmentation for urban locations classified by the Income and Expenditure Survey 20122013 is taken as a proxy for Colombos income segment.

Figure 12: Affordability Heat map, Source: JLL Research

Segmentation of households based on Income in deciles

Central

L UM L UM UMUM LM LMLM A A

Secondary Secondary - North Suburbs

Bottom 70% with monthly income less

than LKR 63,334

Third top 10% Households with a mean montly

income of LKR 71,490

Second top 10% Households with a mean montly income

of LKR 100,302

Top 10% households with an mean monthly

income of LKR 285,803

3BHK+

3BHK+

3BHK+

3BHK+

2BHK

2BHK

2BHK

2BHK

Legend: Affordable Not Affordable A - Affordable L - Luxury UM - Upper-Mid LM - Lower-Mid

1BHK

1BHK

1BHK

1BHK

Inference from the affordability assessment

Only the top 20% of income-earning households, i.e., 17.1% of the resident population in Colombo, can afford to buy their dream homes in Colombo or its suburbs.

Only the top 10% income-earning households, i.e., 8.7% of the resident population in Colombo, can buy a two-bedroom or three-bedroom apartment in Colombo.

Even the top 10% of households with a mean monthly income of around LKR 0.3 million can only afford a two-bedroom lower-mid property in secondary locations.

Being relatively affordable, the secondary north submarket offers the top 10% income-earning households the option to buy an affordable three-bedroom apartment.

Even in suburban locations, the top 10% of income-earning households may not be able to purchase a two-bedroom upper-mid apartment.

Therefore, apartments in the Central submarket and upper-mid and luxury projects in the secondary submarket rely only on NRSLs, foreigners or HNW RSLs in Colombo.

Figure 11: Methodology, Source: JLL Research

Mean Monthly Income based on the income deciles (from

Income and Expenditure Survey 2012-13) (A)

Ticket sizes of the different type of apartments across segments and sub-

markets (B)

B/(A*12) - Affordability ratio - If the ratio is less than five, then the house in that particular sub-market and segment is affordable for a particular income group, if the ratio is greater than five then the house is not

affordable for that particular income group


Housing the masses - The government takes charge

The socioeconomic condition of the lower-income segment of the

country has been improving with various poverty alleviation pro-

grammes. The latest Household Income and Expenditure Survey

reveals that the household income per month in Sri Lanka has been

growing at a compounded annual growth rate (CAGR) of 6.1%, from

LKR 36,451 per month in 2009-2010 to LKR 46,207 in 2012-2013.

More importantly, rapid economic expansion has trickled down sig-

nificantly, and the poverty headcount ratio has declined rapidly during

the past decade. With the emergence of the IT/ITES and tourism sec-

tors, job opportunities in Colombo are increasing. As a result, we are

witnessing heavy migration towards Colombo, which requires proper

housing facilities. The government has taken on the duty to provide

housing and a healthy lifestyle to every citizen. Subsequently, while

the private players concentrate on the demand for housing by NRSLs

and foreigners, the government has been focusing on the affordable

and lower-mid segments.

UDA partners with private developers

To boost the affordable housing sector and elevate the living

standards of people residing in slums or in unhygienic conditions,

the Urban Development Authority (UDA) introduced the Urban

Regeneration Project (URP). The UDA plans to eradicate slums

and other dilapidated housing from the city by resettling the families

to new housing colonies of internationally recognised standards.

Consequently, the UDA has started its mission to construct around

30,000 low-cost housing units in Phase I of the URP. In addition, once

Phase I is completed, the UDA plans to construct another 40,000

housing units.

Meanwhile, through the URP, the government has already built

around 4,000 apartments. In addition, another 3,000 apartments

are under development for the low-income segment of Colombo.

Moreover, with the UDA partnering with Tata Housing from India to

speed up the construction of affordable residences, we foresee similar

arrangements with other private players to achieve the targeted

completion of 70,000 housing units in the next five years.

Figure 14: Population growth, Source: Income and Expenditure Survey, 2012-2013

Population (Mn) 2009 2012 % Change

Sri Lanka 19.7 20.2 3%

Urban 2.8 3.6 29%

Rural 15.8 15.7 -1%

Estate 1.1 0.9 -18%

Figure 13: Household Income and Poverty ratio, Source: Income and Expenditure Survey, 2012-2013

12,803

20,048

22.7

15.2

19.0

8.9

6.7

50,000

40,000

30,000

20,000

10,000

020052002

Mean household income per month Poverty Head count ratio

2006-07 2009-10 2012-13

Hous

ehold

inco

me/ m

onth

(LKR

)

Pove

rty H

eadc

ount

ratio

25

20

15

10

5

0

Sri Lankan GDP by Sector

26,286

36,451

46,207


Office sector in Colombo

Sri Lankas constantly improving socioeconomic development, good infrastructure and availability of talent have attracted many multinational corporations (MNCs). Furthermore, with Sri Lanka tapping other South Asian countries in terms of starting and doing business with fewer procedural formalities, we have seen an increase in the number of companies exploring opportunities in the country. As a result, the Colombo office market is witnessing a steady demand for small-sized office modules that are less than 2,000 sq ft, as these are ideal for start-ups. The

Banking, Financial Services & Insurance (BFSI) and IT/ITES sectors are the top two office leasing sectors in Colombo. While established

domestic BFSI companies absorb office space that is anywhere between 3,000 sq ft and 15,000 sq ft, the IT/ITES sector absorbs office modules

between 10,000 sq ft and 30,000 sq ft WNS, Aegis BPO, Leapset and WSO2 are some of the IT/ITES companies that leased space during the

past year, while Virtusa and HSBC are some of the major office occupiers in Colombo.


Figure 15: Ease of Doing Business, Source: World Bank, 2014

Ease of Doing Business (Rank out of 189 countries)

Colombo has around 2.6 million sq ft of Grade A office space, less than 5% of which is vacant. Along with Free Lanka Towers, we expect AEC Towers to be completed this year, supplying around 0.14 million sq ft of Grade A office space by end of 2014. In 2015, we expect 0.33 million sq ft to be completed, taking the total stock of Grade A office space to around 3 million sq ft by end of 2015.

Sri Lanka

85

Maldives Nepal Pakistan Bangladesh India Bhutan Afghanistan

10595 110 130 134 141 164


Apart from office tenants, the park is expected to have centres of the universities of Moratuwa and Peradeniya. We have been witnessing foreign universities leasing space in various commercial buildings in Colombo; we expect this trend to continue in the future, as the number of students in the country pursuing higher education have been increasing.

Office sector encroaches on prime residential buildings

Occupiers are increasingly leasing space in refurbished buildings and choosing to stay closer to the CBD because of minimal vacancy rate in grade A office spaces. Given the inadequate supply of quality office space, tenants are compromising and taking up space in residential structures and Grade B commercial buildings in the CBD to house their offices. With a steady requirement for small-sized office spaces, business centres are ideally placed to reap the maximum benefit from the opportunity of providing small-sized office space modules.

Rents in Grade A buildings have been increasing steadily at a CAGR of 8% every year since 2009, because of the demand for quality office space. However, the long-term growth in rents and the expansion of the office real estate market will rely on the success of the MNC start-ups and the IT/ITES industry. Although rents have been on the rise, Colombo still offers a very competitive rate compared to the commercial capitals of neighbouring countries. Capital values continue to grow faster than rents, supported by expectations of high rent growth in the future. As a result, market yields have been compressing since 2009.

Building Name Address Developer GFA sq ft Year

AEC Towers Colombo 14 AEC Group 75,000 2014

Orion City Phase II Colombo 9 St. Anthonys Industries 2,00,000 2015

LHP Colombo 3 LHP Construction 60,000 2015

Laugfs Colombo 5 Laugfs Holdings Ltd 65,000 2015

Access towers Phase II Colombo 2 Access Realties 2,00,000 2016

Waterfront Colombo 2 John Keells 5,00,000 2018

Shangri-La Colombo 2 Shangri-La 6,00,000 2018

Figure 16: Future supply, Source: JLL Research, 2014

Future Supply - Under Construction

Figure 17: IT/ITES Revenue, Source: SLASSCOM

2009A

210387

2011A

710

2013A

1000

2016P

5000

2022P

IT/ITES Revenue (USD Mn)

Limited future supply of quality office space could restrict business expansion in the long term

The future supply of Grade A office space from the private sector is largely constrained, with only 0.6 million sq ft expected to come on stream by 2016. Taking into account the proposed developments, we arrive at an aggregate future supply of around 4 million sq ft. This future supply is very low, considering the ambitious targets set by the Sri Lankan Association of Software and Service Companies (SLASSCOM) to add another 200,000 jobs by 2022. Even considering a conservative average floor space per employee of 75 sq ft, Sri Lanka would require at least 15 million sq ft of office space by 2022 for the IT/ITES sector alone. To address the supply bottleneck in the coming years, the UDA is developing its second knowledge park, in Colombos Tripoli market (the first one is under development in Hambantota), at a cost of around USD 7 million. The knowledge park is expected to host a range of tenants from various sectors, including electronics, software, business process outsourcing, fashion design, pharmaceutical and health.


Real estate cost to increase

In the short term, given the low vacancy rate and limited supply, we foresee rents going up. For that reason, it is an ideal time for tenants of small-sized office space to lock in the rent for future expansion. However, demand for large-sized office modules has been sluggish, so tenants have relatively more room for negotiation. In the long term, given the supply constraints, we foresee rents rising irrespective of the size of office modules. Therefore, we suggest that tenants adopt cost-saving strategies to optimise their real estate costs.

2009

400

350

300

250

200

150

100

50

02010 2011 2012 1H142013

336

211

165

Weighted average gross rent (LKR/sq ft/month)

Average Rent WTC Rent Average Gross Rent (excl. WTC)

Figure 18: Average Rent in Colombo, Source: JLL Research, 2014

Figure 19: Average Capital values in Colombo, Source: JLL Research, 2014

19,39821,500

7.9%

7.4%

7.7%

7.1%

6.8%

35,000

30,000

25,000

20,000

15,000

10,000

5,000

020102009 2011 2012 2013

8.0%

7.8%

7.6%

7.4%

7.2%

7.0%

6.8%

6.6%

6.4%

28,388

24,596

31,943

Weighted Average capital values (LKR/sq ft) Market Yield

Capital Values and Yield


Colombo - A retail destination in the making

As a prime business destination and gateway for tourists, the retail market in Colombo is growing rapidly. The increasing disposable income and the rising living standards of Sri Lankans are changing their spending patterns and preferences towards better quality branded goods and services.

Colombo has 8 operational malls with a built-up area of around 0.66 million sq ft and has an average vacancy rate of around 5%. Apart from these malls, the UDA of Colombo is encouraging the conversion of the citys heritage sites into retail destinations. These include the Dutch Hospital in the Colombo Fort area, the racecourse complex on Reid Avenue, the Auditor-Generals Office (Arcade Independence Square) in the Colombo Fort location and Waters Edge in Rajagiriya. The recently opened Arcade Independence Square has a good number of retail outlets for shoppers along with cinemas and restaurants, while Waters Edge in Rajagiriya will serve as a destination for recreation, dining and shopping.

Shopping complexes complement inadequate mall supply

Although retail real estate is expanding, growth in the retail real estate market has not matched the growth of the retail sector. Though Colombo has a few mall developments, the city lacks international quality mall space. However, we see a few such proposed developments in the pipeline, most of which are a part of larger mixed-use developments. The construction of the retail component is progressing slowly. We expect only Liberty Plaza Phase II to be completed this year, and no other new completion is expected in the next three years within Colombo. However, stand-alone showrooms and supermarkets continue to expand in the city in the absence of mall supply. Besides UDAs initiatives to expand retail real estate, local players are also developing shopping complexes. Orex City, with more than 500 shopping units located in Ja-Ela, Gampaha district, is in a ready-for-fit-out stage. Similarly, Ward City, with more than 200 shopping units located in Gampaha district, is under development.

The organised retail sector outside Colombo is in a primary stage of

development. Kandy City Centre, completed in 2008, is the only mall outside Colombo. However, with increased interest from supermarket retailers to expand outside Colombo, we see improved penetration of the organised retail sector beyond Colombo.

Sri Lankas growing middle class population and strong growth in tourism will keep retail demand upbeat in the coming years. As was the case in 2013, older malls/retail space will be refurbished and multi brand showrooms such as ODEL, House of Fashions, No Limit and Beverly Street will continue to climb the value chain. Due to the limited availability of quality retail space along with a strong demand for quality space, rents will continue to see strong appreciation until the supply constraints are addressed.


Locations (Rents LKR per sq ft per month)Fort (Colombo 01) 150 - 350Kollupitiya (Colombo 03) High Streets - 150 - 300, Malls - 300 - 700Bambalapitiya (Colombo 04) High Streets - 125 - 250, Malls - 250 - 650Wellawatte (Colombo 06) 100 - 200Dehiwala & Mt. Lavinia 100 - 200Nugegoda 75 - 200Maharagama 60 - 150Wattala 100 - 150Borella (Colombo 08) > 90

Figure 20: High Street Rents, Source: JLL Research, 2014


Sri Lanka tourism witnessing consistent growth

Since 2009, Sri Lanka has seen a substantial growth in tourist arrivals and revenues. Sri Lankas foreign tourist arrivals grew at an impressive 27% to a record 1.3 million tourists in 2013 (beating Sri Lankas previous record of 1 million in 2012) while the country generated USD 1.7 billion in tourism receipts. The Sri Lanka Tourism Development Authority (SLTDA) has set a target of 1.5 million tourists in 2014 and a long-term target of 2.5 million annual arrivals in 2016.

According to the World Travel and Tourism Council (WTTC), the tourism sector directly contributed around 3.9% of Sri Lankas GDP in 2013 and is estimated to have contributed around 3.5% of the total employment in the country. Leisure travel spending (inbound and domestic) generated 84% of direct travel and tourism GDP in 2013 compared to 16% for business travel spending, while travel and tourism directly supported 286,000 jobs.

The largest source markets for Sri Lanka continues to be India, with arrivals from the United Kingdom, Maldives, the Middle East and European countries including Germany and France also being considerably high. Of late, the country is also recording a significant increase in Chinese tourist arrivals.

The Sri Lanka Tourism Promotion Bureau has undertaken extensive measures to market the countrys tourism offering through tourism forums, campaigns and other marketing initiatives, which are focused on key source markets such as India, China and the Middle East. To realise its full tourism potential, however, Sri Lanka will have to continue to invest significantly in improving international connectivity, hotel infrastructure, domestic transport and energy infrastructure.

Sri Lankan hotels have started to focus on attracting regional MICE traffic to their hotels, because of an increase in traffic from meetings, incentives, conferences and exhibitions (MICE) segments. Sri Lanka has a strong locational advantage, being in close proximity to the Indian subcontinent, and has immense opportunity to grow this segment, particularly business from India and other neighbouring countries such as Pakistan and Bangladesh. However, there are

current supply constraints with the country not having sufficient capacity to cater to large volumes of MICE business. The lack of frequent flight connectivity to key source markets is another concern. The governments focus on improving tourism infrastructure at leisure destinations and upcoming tourist circuits will boost Sri Lankas overall attractiveness as a leisure destination, while specific measures to promote Colombo as a MICE and entertainment destination are likely to see benefits in the long term.

Along with playing a pivotal role in developing affordable housing and offices as well as converting heritage sites into retail destinations, the UDA also plans to make the Beira Lake area Colombos entertainment and recreational zone to boost Colombos appeal as a tourist destination. Opportunities for development in the northern and eastern regions as well as other new emerging tourism zones have also begun to take shape. Another growing trend is a phenomenal increase in domestic tourism-domestic travel spending generated 52.1% of direct travel and tourism GDP in 2013 (WTTC)-against the backdrop of improved economic conditions and higher disposable incomes.

Figure 21, Source: UNWTO, 2013

Growth in Tourist ArrivalsWorld Tourism 5%Asia Pacific 6%India 4%Hong Kong 8%Singapore 8%Indonesia 9%South East Asia 10%Maldives 10%Philippines 11%Malaysia 16%Thailand 20%Sri Lanka 27%


Figure 22, Source: SLTDA

175

150

125

100

75

50

25

0January

Thou

sand

s

AprilFebruary MayMarch June July October November DecemberAugust September

2011 2012 2013 2014

Tourist Arrivals


Casino development - The game changer

Along with capitalising on the countrys natural tourist attractions, Sri Lanka is now beginning to emerge as a potential gaming hub in the Indian subcontinent. Along with other Asian destinations such as Singapore and Macau, the government of Sri Lanka legalised gaming zones in 2010, and the introduction of casinos has already provided a substantial boost to foreign tourist arrivals, particularly Indian and Chinese. Sri Lankas proximity to India, where there are strict entry barriers for casino operations has resulted in a competitive landscape for the Sri Lankan gaming industry. Apart from the nine casinos already in operation, three gaming-driven integrated resorts, Crown Colombo resort in the heart of Colombo near Beira lake, Waterfront Casino by John Keells Holdings and Queesbury at D.R. Wijeywardene Mawatha, Colombo have been proposed.

These three proposed projects would make a significant impact on the Sri Lanka tourism portfolio despite concerns over the socio-political implications of the gaming industry. Sri Lankas casino industry is largely driven by tourists from other Asian countries. Casinos attract the affluent tourist population and thus help Sri Lanka to position itself as a premier tourist destination in South Asia, supporting the hospitality sector.


Tourism to fuel growth in the hospitality industry

Driven by the promising growth in the tourism sector, Sri Lankas hotel industry has seen a flurry of activity. The impressive development of infrastructure - the opening of Mattala Rajapaksa International Airport in 2013, the enhanced road connectivity with the completion of the Katunayake Expressway and the continued development of the Southern Expressway has played a part in enhancing the growth of the hospitality sector. While improved visibility and accessibility are boosting Sri Lankas overall attractiveness as a leisure destination, specific measures to promote Sri Lanka as a MICE destination are also gradually seeing benefits.

The country is developing its hotel infrastructure to meet growing demand. In 2013, Sri Lanka witnessed an addition of approximately 1,600 rooms, while in 2014; the country is likely to see 37 new hotel projects adding 2,500 rooms. There have been high levels of interest from global hospitality players, including Shangri-La, ITC, Starwood, Marriott, Moevenpick and Hyatt, all of which have projects underway. Meanwhile, local hospitality leaders such as John Keells, Aitken Spence, Jetwings, Amaya Leisure and Laugfs Leisure have aggressive expansion plans.

Existing hotel supplyAs of end 2013, Sri Lanka had approximately 27,000 SLTDA-approved hotel rooms, with a high concentration in the high-end and budget categories. However, the bulk of Sri Lankas hotels are in the informal category. The past two years have seen strong growth in the informal sector, with the government encouraging the set-up of home stay units and guesthouses, among others. There are approximately 233 hotel projects planned or under development across the country, which will result in approximately 15,370 rooms being added over the next five years.

As per our estimates, branded hotel supply proposed for Colombo city is approximately 4,200 keys, while branded hotel supply outside Colombo includes approximately 2,600 keys along the south coast, 600 keys in Kandy and the hill country region and 800 keys along the east coast and other emerging regions, while the remaining supply

Major global hotel chains, including the Shangri-La Group, ITC Hotels, Starwood Hotels and Resorts, Marriott International, Hyatt Hotels

Corporation and Moevenpick Hotels and Resorts, have hotel developments underway in Colombo

and along the south-west coast.

Hotel Supply - Pan-Sri Lanka

Accommodation Type Number Keys

Tourist Hotels 262 15,450

Boutique Hotels and Villas 62 700

Home Stay Units 482 1.5

Guest Houses 970 9,000

Heritage Homes 66 350

Total 1,842 27,000

Figure 23: Hotel Supply, Source: JLL Research, 2014

consists primarily of unbranded accommodation, including boutique hotels, villas, independent budget hotels and guesthouses.

With the projected growth come numerous challenges for the tourism industry, including a shortage of skilled staff, a rise in staffing and energy costs and the need for improved international connectivity and increased destination marketing efforts.


Figure 24, Source: JLL Research, 2014

There is a rise in investor interest and growing

transaction activity. The Singapore-based Calamander

Group acquired the Unawatuna Beach Resort

along the south-west coast for USD 10 million, while Amaya

Leisure PLC recently acquired a majority stake in Sun Tan Beach Resorts, which owns

a 125-room resort on the east coast for USD 4.3 million.

Note 3 - FY = April-March

Occupancy levels stable; average daily rates (ADR) see slight growth despite increase in supply

With the consistent growth in tourist arrivals, Sri Lankan hotels maintained their occupancy levels at 71% in FY3 2014 despite substantial supply additions across the country across both the formal and informal hotel sectors, as per SLTDA. Occupancy levels are likely to see further growth as connectivity and destination marketing efforts to promote tourism improve. While there have been some corrections in rates in the five-star category, ADR levels in the country have seen a slight increase-reflective of a gradual shift in the profile of tourists arriving in Sri Lanka and an increased spending capacity-from USD 97 in FY 2013 to USD 110 in FY 2014.

Upcoming Hotel Supply- Key Projects in Sri Lanka

Developer Brand Location Proposed Positioning StatusExpected Opening Keys

John Keells Group/Sanken Lanka Cinnamon Red Colombo Midscale Newly opened 2014 240Browns Investments PLC Unconfirmed Kosgoda Luxury Under construction 2015 150Shangri-la Hotels Shangri-la Hambantota Luxury Under construction 2015 375Lanka Hotels & Residencies Sheraton Colombo Upper Upscale Under construction 2015 306Sino Lanka Hotels Grand Hyatt Colombo Upper Upscale Under construction 2015 475Fairway Group Unconfirmed Colombo Economy Under construction 2015 196Softlogic Moevenpick Colombo Upscale Under construction 2015 180East West Corporation Marriott Weligama Upper Upscale Under construction 2015 200Hemas Holdings/Minor Hotel Group Anantara Tangalle Luxury Under construction 2015 154Hemas Holdings/Minor Hotel Group Anantara Kalutara Luxury Early Development 2015 141Jetwings Jetwings Colombo Midscale Under construction 2016 70Aitken Spence Riu Ahungalla Luxury Planning 2016 500Sino Lanka Hotels Holdings Ozo Galle Midscale Under construction 2016 148Damro Marino Sands Colombo Midscale Under construction 2017 270Shangri-la Shangri-La Colombo Luxury Under construction 2017 550Colombo City Centre Nexxt Colombo Upscale Proposed 2018 200John Keells Group Unconfirmed Colombo Luxury Proposed 2018 800Rank Holdings/Crown Resorts Crown Colombo Luxury Proposed 2018 430WelcomHotel Lanka WelcomHotel Colombo Luxury Proposed 2018 300Indo Lanka Hotels Crowne Plaza Colombo Upper Upscale Proposed 2019 225


Sri Lanka beyond Colombo

While Colombo is the engine of growth for Sri Lanka, other Tier II cities also contribute significantly to the countrys economic development. Some of the other emerging cities in the country include Kandy, Galle and Hambantota.

Kandy: Kandy is the countrys second largest city and attracts tourists for its scenic beauty and Buddhist temples. Being centrally located, Kandy has good connectivity to all parts of the country. Also, as the administrative capital of the Central Province, the city hosts various government offices and branches of corporations that are headquartered in Colombo. In addition, Kandy has its own local industries ranging from textiles to IT. The city has one shopping mall, Kandy City Centre, which houses various local and international brands. With the airport and an expressway that connects with Colombo under construction, we foresee heightened economic activity here in the coming years.

Hambantota: Located at the southern tip of Sri Lanka, Hambantota, which was hard hit by the 2004 tsunami, is now fast emerging as the second major urban hub in Sri Lanka. The city is ideally placed along

one of the worlds busiest shipping routes, so it has been developed into a port hub. This development is expected to catalyse the economic activity in this region; recently, the port started bunkering operations. The city now hosts one of the two international airports in Sri Lanka and a railway link which is currently under construction, to facilitate harbour operations. The railway connection will be an extension of the western coastline railway link, which connects major locations along the western coast. Similarly, the southern expressway that connects Colombo and Matara will soon extend till Hambantota. The city is a major producer of salt, is home to the first wind farm in Sri Lanka and has a 35,000 seater international cricket stadium.

Galle: Galle is the third municipal council in Sri Lanka after Colombo and Kandy. Situated at the south-western tip of Sri Lanka, Galle is the administrative capital of the Southern Province. The city has very good connectivity to Colombo through the Southern Expressway and the western coastline railway link. Galle Fort, which was built during the Dutch era, is one of the main tourist attractions in the city, while the citys natural harbour and other religious places also attract tourists.


Ratnapura

Nuwara Eliya Badulla

Ampara

Monaragala

Kalutara

WESTERN

NORTH WESTERN

SOUTHERN

SABARA-GAMUWA

Kandy

Matale

Polonnaruwa

BatticaloaKurunegala

Kegalle CENTRAL

NORTH CENTRAL

EASTERN

Puttalum

Anuradhapura

Vavuniya

Trincomalee

NORTHERNMannar

Kilinochchi

Mullaitivu

Jaffna

Figure 25, Source: JLL Research, 2014

Sri Lanka Map

Galle

Colombo

Kandy

Kankasenthurai

Pallai

Omanthai

Medawachchiya

Madhu Road

Talaimannar

Kataragama

HambantotaBeliatta

Matara

Oluvil

Gampaha

ColomboKottawa

Katunayake

Galle

Hambantota

Airport Projects Port Projects

Railway Infrastructure Projects

Road Infrastructure Projects


3238

2.9

Port of Colombo

1.4

95.8

All Expressway connected to Colombo

45.9

Bandaranaike International Airport,

Ratmalana Airport

Yes

2.31 Million

Population Density

(per sq km) - 2012

Unemployment rate % - 2012

Port

Poverty Head Count Ratio -

2012/13

Literacy rates % - 2012

Connectivity through

Expressway

Labour force participation %

- 2012

Airport

Railway network

Population (District) - 2012

714

7.2

No Port

6.2

92.4

Colombo - Kandy - U/C

45.1

Domestic Airport U/C

Yes

1.37 Million

655

2.3

Port of Galle

9.9

96.6

Southern Expressway

44

Domestic Airport

Yes

1.06 Million

239

5.3

Port of Hambantota

4.9

88.8

Southern Expressway - U/C

50.8

Mattala Rajapaksa International Airport

U/C

0.60 Million

HambantotaGalleKandyColombo

Infrastructure activity outside Colombo Northern Railway Line reconstruction project: The segment

between Medawachchiya and Madu Road was completed in 2013, while work on the Madu-Thaleimannar and Omanthai-Pallai lines is likely to be completed during 2015. The Pallai-Kankasenthurai Railway Line is slated for completion in 2016.

Mattala Rajapaksa International Airport: Phase I of the Mattala Rajapaksa International Airport at Hambantota will be able to handle 1 million passengers, 30,000 aircraft movements and 45,000 tonnes of cargo each year.

Hambantota Port development project: The bunkering operations started in June 2014 in the newly built ship fuelling unit at the port of Hambantota-which has been operational since 2010-with an initial capacity of 55,000 tonnes.

Southern Expressway: Phase I from Kottawa to Pinnaduwa (Galle) was completed in 2011, Phase II from Pinnaduwa (Galle) to Godagama (Matara) opened in March 2014, and feasibility studies for Phase III of the 96-km-long Matara-Hambantota line has been completed.

Oluvil Port development project: Situated on the eastern side of the country, the project comprises of a commercial harbour and a basin for fishing craft.

Matara-Kataragama Railway Line project: This 114.5-km-long Sri Lankan railway project, currently under construction, will extend the coastal line from Matara to Kataragama via Hambantota. Phase I of the project from Matara to Beliatta is expected to be completed in 2016.

Figure 26, Source: Department of Census and Statistics - Sri Lanka, JLL Research


Uncovering global real estate cost-saving techniques

Inflation, increasing domestic costs and external uncertainty has pressured both the top and bottom lines of companies. With real estate costs being the second largest cost component after human resources for the services industry, awareness for it amongst office occupiers and developers regarding various cost-saving opportunities is important. Global real estate cost-saving trends such as alternative workplace, flexitime, periodic dark space audits, regular sustainability and energy audits should be carried out proactively. Outsourced facilities management and professional project management teams should be employed from the project planning and design stage to the post-completion maintenance and renovation stage to save costs.

Looking beyond the conventional cost-saving techniques and considering the cumulative effects of saving trivial cost could lead to significant improvement in the overall financial health of the occupier or the developer. These cost-saving trends and techniques are not just restricted to office real estate, but can also be utilised across other property sectors, including the retail, residential and hospitality sectors.

Alternative workplace strategy

As communication technologies are rapidly evolving, employees are increasingly being able to work from any location at any time. Alternative workplace strategy (AWS) provides approaches to support this changing work environment. The strategy combines non-traditional work practices, settings and locations, all of which result in the evolution of traditional office space. AWS creates an environment that supports and enables employee needs. This strategically bundled concept results in increased cost savings, more efficient space utilisation and higher productivity and also reflects an organisations brand values. In addition, workplace strategies are emerging as a global imperative for optimal employee productivity, satisfaction and retention. Essential to the overall portfolio and expense management, mapping AWS can stir an organisation to ultimate success.

Dark space audit

Most of the companies that are not measuring and monitoring how their office space is being used are missing a massive opportunity to reduce real estate and energy costs. As companies strive to use their facilities as efficiently as possible and perhaps reduce their overall real estate costs, re-examining existing vacant space can prove constructive for the company. A dark space audit counsels the inspection of the amount of space that remains physically vacant from the overall area occupied and for which the tenant is bearing the rent burden arising out of it.

Typically, many corporations may have a 1225% vacancy rate in their portfolio. This shadow space tends to be spread throughout a building or portfolio and is not easily assembled to dispose of through a restructure, sale or lease/sublease. A meticulous planning exercise could help occupiers unlock these spaces and use them more effectively. It may require spending capital to rework existing spaces to accommodate a consolidation, but, many times, the pay-off is outstanding.

Optimal Space

UtilisationDark Space Audit


Integrated facilities management

The concept of outsourcing facilities management (FM) is at its nascent stage in Sri Lanka. Companies have historically adopted more of an in-house model with an out-tasking approach in which single services such as cleaning, catering or maintenance, are delegated to external providers. Globally, the concept is shifting towards the adoption of integrated facilities management (IFM) outsourcing as a more strategic operating model that integrates these single services and other tasks into a seamless function. It significantly delivers greater value than the sum of its parts. This value comes in the form of reduced costs, minimised risks and increased end user satisfaction. Initially spearheaded by Western multinationals, specialist expertise attracts an increasing number of companies. While the FM industry is still evolving in Sri Lanka,

the shortage of qualified talent, benchmarking data and high-quality service providers and suppliers could create challenges in the quality and consistency of services.

Occupiers of real estate often consider criteria such as a pleasant, flexible and reliable work environment; corporate sustainability; and ethics when appointing service vendors. Professional FM, delivered to international best practice standards, can directly influence the provision of a more attractive and productive work environment. IFM drives continuous improvement by customising the model to suit the needs, enabling a company to respond to changing business requirements and providing confidence in achieving the desired outcomes. IFM services offer manifold solutions:

ENGINEERING SERVICES

Heating, ventilation and air conditioning (HVAC)

Plumbing

Lifts

Electrical

Utilities

Energy

SPACE/OCCUPANCY SERVICES

Space planning

Minor projects

Headcount tracking

Moves/adds/changes

WORKPLACE SOLUTIONS

Mail

Reception

Transport

Archiving

Catering

Concierge

Reprographics

SOFT SERVICES

Cleaning

Janitorial

Security

Landscaping

Case study from Colombo: A clients energy bill cost savings for an eight-year-old G+5 building with an area of 189,000 sq ft, approximately 2,400 users and 24/7 operations. The buildings energy consumption in 2012 was 5.2 MW/hour.

Initiatives: Optimised chiller operations by increasing the outlet temperature set point, setting the air handling unit (AHU) to auto mode and monitoring the floor temperature on a 24/7 basis.

Results: Savings based on 6.5 months electricity meter readings (June-December 2013 versus June-December 2012)

348,315 kWh/annum

Electricity consumption savings

prorated for 12 months

LRK 6.62 million/annum

Prorated savings in local

currency

USD 52,000 annum

Prorated savings in US

dollars

188,671 kWh/annum

Electricity consumption savings

in 6.5 months


Property and asset management

Property and asset management (PAM) becomes the critical link among the various stages of a projects lifespan. It not only ensures the end-to-end asset lifespan-from the project planning and design stage to the post-completion maintenance and renovation stage-but also attempts to eliminate the gaps that exist among the various stages of a projects lifespan. The significance of an efficient PAM practice is quite substantial and typified by changing occupier preferences and the emergence of sophisticated development

models. Property management involves the handling of day-to-day property maintenance (engineering, security and soft services, among others) and developing and implementing strategic property management plans. Asset management, on the other hand, has a long-term approach. This involves creating and implementing strategies that focus on financial returns from an asset pertaining to optimising income streams, lease management, mitigating risks and optimising the utilisation of assets.

Components of PAM

INFRASTRUCTURE MANAGEMENT

Water supply and waste

Power/electricity

Telecom

Building

Soft services

Landscape and road

ASSET MANAGEMENT

Risk management

Tenancy management

Portfolio and asset management

Financial management

Lease administration

VALUE-ADDED SERVICES

Energy and sustainability management

Predictive maintenance

Disaster management


Project management

Project management (PM) professionals serve clients to fit-out or construct a new facility. In this scenario, occupiers need a partner who has the experience and knowledge to deliver the requirements. Today, delivering a successful project goes beyond being on time, on budget and within specification. PM professionals commit to help identify and manage project risks before they become costly problems. Understanding the local culture, regulations and business drivers, PM professionals support clients in effectively completing a wide variety of project types across industries-from corporate offices and industrial developments to new campuses and mixed-use developments. The various facets of the service include:

INTERIOR FIT-OUT ASSET ANALYSIS MOVE MANAGEMENT

CONSTRUCTION MANAGEMENT AND

MONITORING

DEVELOPMENT MANAGEMENT AND

ADVISORY

DESIGN-AND-CONSTRUCT

DEVELOPMENT

TENANT IMPROVEMENTS

MULTISITE PROGRAMMES

CAPITAL IMPROVEMENTS

TECHNICAL DUE DILIGENCE


Shining bright in the investment radar

Improving economic sentiment throughout the West and in India is expected to support exports, investments and tourism, which in turn are anticipated to drive domestic consumption. Inflation in the economy is softening, and the Central Bank of Sri Lanka (CBSL) has started to loosen its monetary stance. This will allow more lending to the private sector, further supporting domestic consumption.

The government is laying a strong platform to launch its economy on a high-growth trajectory. Consequently, the government is focusing its efforts on activity such as infrastructure development, rehabilitation of the war-torn Northern Province and job/talent creation.

Recently, Coface, a multinational credit insurance company, identified Sri Lanka as one of the top five new emerging economies in the world. Apart from the investments by developers from India and South Asia, private equity funds have also started actively studying this new emerging market.

However, to exploit the opportunity, the following points need to be addressed immediately:

The country should fast track the proposed mass transport systems, such as the monorail and metro, which will have a direct positive impact on Colombos suburban real estate.

Human resources should be appropriately trained to enhance economic and social development.

Private players have to be encouraged to develop affordable housing projects through government schemes with subsidised borrowing rates.

Developers should be encouraged to develop more commercial developments in line with the business expansion plans of the industry bodies.

Economic Indicators 2013A 2014F 2015F

GDP Growth at Constant prices4 7.3% 7.5% 7.5%

Inflation - Avg. Consumer prices changes4 6.9% 5.0% 6.0%

GDP per capita - Current prices - USD5 3,280 3,385 3,658

Total Investment to GDP5 31% 33% 30%

Current A/C balance to GDP4 -2.0% -2.6% -3.5%

Figure 27: Economic Indicators, Source: JLL Research, Note: 4 - Asian Development Bank; 5 - IMF Outlook


Robin SManager - Strategic [email protected] +91 87544 04800Sri Lanka +94 774 668 757

Roopa GeorgeSenior Associate - India Hotels & Hospitality [email protected] +91 99530 58164

Special Contribution

Shankar ArumughamHead - Strategic Consulting Sri [email protected] Lanka +94 776326 888 India +91 99400 66869

Ashutosh Limaye Head - Research and REISIndia [email protected] +91 98211 07054

Strategic Inputs

We would like to acknowledge Ponni.S and Supun Fernando, for their valuable contribution to this research paper.

Acknowledgement:

AuthorsVasanth RaghunathanAssistant Manager - Research and [email protected] +91 44 3095 1063

Sujash BeraAssistant Manager - Research and [email protected]+91 33 2227 3293

Gagan SinghCEO - Business, IndiaChairperson - Sri Lanka [email protected] Sri Lanka +94 777 444094India +91 98111 51610

Sanjeev NairHead - PAM & IFMSri [email protected]+94 776 868245

Sunil SubramanianHead - Transactions Sri [email protected]+94 775522155

Business Enquiries

About JLLJLL (NYSE: JLL) is a professional services and investment management firm offering specialized real estate services to clients seeking increased value by owning, occupying and investing in real estate. With annual fee revenue of $4.0 billion and gross revenue of $4.5 billion, JLL has more than 200 corporate offices and operates in 75 countries with a global workforce of approximately 53,000. On behalf of its clients, the firm provides management and real estate outsourcing services for a property portfolio of 3.0 billion square feet, or 280.0 million square meters, and completed $99.0 billion in sales, acquisitions and finance transactions in 2013. Its investment management business, LaSalle Investment Management, has $50.0 billion of real estate assets under management. JLL is the brand name, and a registered trademark, of Jones Lang LaSalle Incorporated.JLL has over 50 years of experience in Asia Pacific, with over 28,453 employees operating in 80 offices in 16 countries across the region. The firm was named Best Property Consultancy in seven Asia Pacific countries at the International Property Awards Asia Pacific 2014, and won nine Asia Pacific awards in the Euromoney Real Estate Awards 2013. www.jll.com/asiapacific.

For further information, please visit our website, www.jll.com

About JLL LankaJLL Lanka is a leading professional services firm specializing in real estate in Sri Lanka. Based out of Colombo, the firm provides investors, developers, local corporates and multinational companies with a comprehensive range of services including research, analytics, project and development services, property and asset management, integrated facilities management, real estate capital markets and transactions encompassing commercial office spaces, hotels, land, industrial, retail and residential units. The Firm aims to combine local market knowledge with its access to global multinational relationships and capital sources, to provide Sri Lankan corporates, government agencies and clients with superior execution, towards transforming their real estate portfolios into efficient inventories, as well as in raising capital for real estate assets.

For further information, please visit www.jll.com.lk

Jones Lang LaSalle Lanka (Private) Limited 2014. All rights reserved. All information contained herein is from sources deemed reliable; however, no representation or warranty is made to the accuracy thereof.

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