India’s Iconic Developments to invest in Lanka’s leisure sector
India’s Iconic Developments Ltd, the developer of 24-storeyed luxury 110 Parliament Road and the 33-storeyed Iconic Galaxy, both at Rajagiriya is looking at investing in the Sri Lankan leisure sector, said Iconic Developments Managing Director, Rohan Parikh.
He said that they are confident that the Sri Lanka tourism sector would recover faster than the construction sector and is looking at opportunities in the Lankan leisure sector. “We may build a new hotel and or acquire and run an existing hotel,” he said.
The group already owns and operates over 200 keys in the leisure sector in India in addition to their involvement in the private education sector. He also said that he was pleased to know the tourism development happening in Jaffna with the commencement of four direct flights from Chennai per week. “We will also look at investment opportunities in both the leisure and apartment sector in the North.”
Parikh however said that they have decided to put on hold their third property development project, the USD 35 million 170 unit 24 floor ‘Iconic Syke’ on hold due to the current economic situation in Sri Lanka .
“We have found that the Sri Lanka construction costs per square are one of the highest in the region. This is because the country has to import more than 70% of building materials from overseas. “In contrast India’s construction cost is very much low as 98% of construction materials are sourced within India.
However in most of the areas like Bombay the land prices are very high. Parikh said that in addition to escalating construction costs, the taxes imposed for buyers of apartments also makes the final product beyond the reach of the customer. “Hence we have now put our third project on hold.”
Asked why the Beach front properties in Sri Lanka are not taking off at a faster pace he once again said the price factor may be the key for this. Asked if Iconic Developments are keen to get involved in providing housing for low and middle income families he answered in the negative.
We would not be able to design and build a house for this segment with the current costs.”
Parikh said that every country must have ‘housing wealth’ allowing more apartments to come up as vertical living is the future.
“Hence the government must look at revising the taxes for housing and take steps to lower the construction cost.”
He also said that the current high interest rates are another huge drawback for the Lanka construction sector to lag behind.