Colombo, March 7 – China’s Sino Great Wall International Engineering has got the contract to build a high-rise five-star beachfront property in southern Sri Lanka under the brand of Dusit Thani, Thailand’s hotel and property development company.
Dusit Thani Sri Lanka is promising investors estimated returns of 8% a year or guaranteed returns of 6% net paid quarterly in US dollars for five years on its apartments on a 500-metre strip on the Balapitiya beach.
Buyers can lease back the apartments to Dusit Thani to manage with no ongoing costs. Owners get 21 day free stay each year and can expect potential capital gains.
“One bedroom ocean-view apartments priced from US$244,000 cost less than comparable property in Bali or the Maldives,” said Ajit Wijesinghe, a director of Indola Group, developer of the Beachfront Balapitiya property with hotel management company Dusit International.
Construction on the first phase of the property, comprising 162 apartments, starts 20 March 2017 and will take almost two years, he told a news conference.
“Balapitiya is one of the best beaches on the main tourist strip in Sri Lanka between Bentota and Galle,” Wijesinghe said. “The property is accessible from the southern expressway with a 90 minute drive from the Katunayake international airport.”
“We sold one tower and are now selling the second tower which is going very well,” he added. “We are guaranteeing 6% return which is much better than what you get in other countries. In Australia you’d be lucky to get 1-2%.”
About one third of the buyers are locals, one third expatriates and another third foreign investors, Wijesinghe said.
“We selected Balapitiya as we see a lot of growth potential in the southern beaches,” he said. “Thailand gets 30 million tourists a year and we have only two million. Sri Lanka has a long way to go. The only thing we don’t have is a luxury product down south.”
Paul Dwyer, director of Indola Group, said they expect to earn $200 million from retail sales when the entire property on eight and a half acres is complete.
Good beach front property on Sri Lanka’s southern coast was hard to get with the main road and rail track running close to the beach.
“It took us four and a half years to get the land,” Dwyer said. “Free hold title is very hard to get.”
Dusit Thani Sri Lanka will earn money from apartment sales and a management fee.
About 15% of the second tower has also been sold, Dwyer said.
Single bedroom apartments will be rented out for at least $200 a night.
Investors can buy penthouses for $3.5 million upwards.
Billy Tang, Sri Lanka Branch General Manager of Sino Great Wall International Engineering Pvt Ltd. a listed firm on the Shenzhen stock exchange, said they built the RIU Resort Hotel Project at Ahungalla.
Sino Great Wall International Engineering has also built 100 five-star hotels in China, he added.