East Coast of Sri Lanka is Ripe for Investment
The East Coast of Sri Lanka which runs from Arugam Bay, past Trincomalee and up to Nilaveli beach has finally come of age with a surge in interest from holiday makers and investors. Boasting some of the most beautiful beaches on the island, rich coral reefs and what some consider being one of the top ten surf spots in the world, the East Coast stands out from the crowd. The peak season along this coastline runs from March to October which marries well with the west and south coast peak seasons which extend from October to April. In addition to beach activities, the East Coast is recognized for its ancient cultural sites including Koneswaram Kovil and Buddhist rock sculptures at Buduruwagala and Maligavila.
Since the end of the war late last year, investment and tourism-related revenue has been steadily increasing. The Board of Investment (BOI) in Sri Lanka is enabling growth in many aspects. One example of this attractive new investment arena can be seen in the benefits on offer to investors who set up a BOI company, which requires US$500,000 of initial investment in the country. The company is then entitled to a lengthy tax free period of operation and duty free imports on machinery and building materials, in addition to residency options for the directors of the company.
According to the latest figures from the government’s tourism board, visitor arrivals rose just over 31 per cent to 50,757, with the majority arriving from Western Europe. Interestingly, tourists visiting from South Asia were up around 44 percent to 12,500. Economic growth has exceeded all expectations at 7 percent and with an increase in the number of large projects coming on board in the next one to two years, Sri Lanka, and in particular, the East Coast is set to benefit enormously from this activity.
According to the Travel Trade Organization in Sri Lanka, there is an urgent need for more hotel rooms to accommodate the anticipated increase in tourist arrivals over the next few years. Ideally, a minimum of 25,000 rooms above the three-star category is what is required at the present, however, the island only has a total of around 14,800 with only 4,400 above the basic three-star requirement based on figures provided by the Tourism Authority. The projected number of tourists that the Authority aims to attract is fivefold the current half-a-million. The East of the country will be a major focus for the Authority according to a senior spokesperson, due to its previously inaccessible nature and its potential for rapid growth.
The BOI has approved a new US$6 million, 150-room resort at Passikudah in the Eastern province of Batticaloa which is due to open. Another large venture involves the family owned Jetwing Group which is planning to expand their impressive portfolio of hotels with the development of two new projects in the Kuchchuwweli and Innupuweli areas of Trincomalee in the North-East, according to recent business reports.of the largest developments along this coastline is currently under construction by the Karooda Group. Having access to substantial family owned land holdings since before 1889, the group is developing multiple residential, commercial, agricultural and industrial projects throughout the East Coast.
“Thona is the starting block of the ongoing creation and evolution of luxury properties built and sold by Karooda Properties; our vision is to simply capture supreme luxury to enhance the land and scenery,” says Richard Dilley, the Sales Director for Karooda Properties. He goes on to say that “there is a need to rejuvenate this area, so the developments from Karooda Properties will offer ongoing jobs and revenue for this part of the island.
Ongoing improvements to infrastructure on the island will have the obvious effect of generating more traffic to the outlying cities and towns. A second International airport at Hambantota in the south east was officially launched by the President Mahinda Rajapaksa. Another major improvement in road travel is the 30-billion rupee Southern Expressway, a 126 km stretch of road from Colombo to Matara on the southerly tip of the island which is expected to boost GDP growth in the south to 10 percent. This long anticipated access to the south will reduce the travelling time from 4 hours to 1.5, not to mention the improvement in the quality of travel.
Sri Lanka has generally been an interesting investment haven for the experienced and adventurous in the past. As the country develops and second holiday home buyers and retirees tire of devaluing currencies and recession in the western hemisphere and across the Atlantic, Sri Lanka is becoming a sensible business environment in which to place one’s hard earned cash. If the island develops tourism to its anticipated capacity, holiday homes, investment properties and buy-to-let ventures will soar in value over the short-to-mid term.