The Colombo Stock Exchange will soon introduce a special tool to woo real estate sector investors. This is to be titled Real Estate Investment Trusts (REITs).
Through this, investors could buy into the real estate market, said Colombo Stock Exchange CEO Rajeeva Bandaranaike. He was speaking at the Investor Forum Sri Lanka 2017, organised by Lanka Property Web.com.
Since their introduction in Asia in the early 2000s, REITs have been adopted across the continent, growing into a market worth over US$ 140 billion.
In terms of market capitalization, the most developed markets are currently Japan, Singapore and Hong Kong, but REITs have also been listed on the stock exchanges of South Korea, Malaysia, Thailand and Taiwan.
Currently, China and India are contemplating the introduction of REITs in those jurisdictions, whilst Indonesia and the Philippines have now got due legislation in place to provide the necessary framework for these products.
REITs came into existence in 1960, when the US Congress decided that smaller investors should also be able to invest in large-scale, income-producing real estate.
He said that the Colombo Stock Exchange after going through a lean patch is now on an upward trend and its ASPI continues to outperform most regional markets. “This is also attracting more foreign buyers,” he said.
Meanwhile, over 20,000 apartment units would be added to the Colombo city skyline in both the luxury and middle class segment, said Dwellings Group Director Theekshana Somaratne.
Speaking at the Investor Forum 2017, he said that there are 150 ongoing apartment projects.
He said that the growth of the property sector picked up with the dawning of peace and was then followed up by large infrastructure development projects which attracted expatriates and also tourism.
He said that mid-range apartments mostly patronised by young working couples would see further demand. The new laws which relaxed ownership regulations for foreigners also helped to swell the property market. “We see an increase in demand in the Colombo surburbs and ‘builders’ would take their projects outside Colombo in the future.”
Although a presentation by the Board of Investment was scheduled, BOI representatives were not present at the designated time.
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