Sri Lanka has spent the last several years attracting local and foreign investment.
This has been accomplished by establishing partnerships with international developers as well as investment firms. The most recent deal will be the first in a series of developments.
A one billion dollar investment plan will provide much need jobs and up to 60,000 homes.
The first phase of this development is a $13 million luxury condominium development in the capital of Colombo, consisting of 272 condos. Mumbai-based developer, Natvar Parikh & Co was offered a deal by the Sri Lanka investment promotion agency that will mean a wide range of tax breaks. The Sri Lanka Board of Investment is excited about this first project since it will bring a number of new jobs to the market.
This residential apartment complex is only the first in a series of projects meant to help supply the market with prime luxury units. Sri Lanka's investment promotion law has attracted many developers and will play an important role in attracting the right developers for the remaining contracts.
There is rising concern that there may not be a need for luxury apartments in Sri Lanka. Currently the demand for high end luxury apartments isn't great, and the country's current supply is able to meet it.
Sri Lanka is expecting a stronger economy in 2008 which could fuel the demand for more luxury apartments. Sri Lanka is also rushing to investment in property after a recent property bubble send land prices out of control. One of the initiatives that has helped reign in the market are higher interest rates and tighter lending practices by the central bank.
This has reduced speculative investing and is encouraging property development.