SAFE HAVEN IN SRI LANKA

from PropertyGuru Property Report No.174 (October - November 2022)

NISEKO CUTS THE ICE

Dispatch

Haven sent

When Sri Lanka’s economy crashed this year, the country’s real estate sector—traditionally regarded as a relatively safe bet for investors—remained surprisingly immune to the devastation

By George Styllis

In August, Sri Lanka announced an import ban on 300 non-essential items, including shampoo and chocolates. It was among the latest desperate measures to protect its scant foreign currency reserves and prevent an economic meltdown following the collapse of its previous government.

It exemplified the scale of a crisis that has engulfed the small island nation and served as a reminder that months on from peak pain when Sri Lankans were enduring all-day power cuts and lengthy queues for petrol, the country is still not out of the woods.

Yet one of the industries looking to the future with optimism is property. Since the decades-long civil war in Sri Lanka ended, real estate has been seen as a haven for investors. As tourism boomed, keen-eyed buyers snapped up cheap properties from the cities to the coast.

During the pandemic, that trend continued as interest rates fell to historic lows and credit to the private sector expanded.

SINCE THE DECADES-LONG CIVIL WAR IN SRI LANKA ENDED, REAL ESTATE HAS BEEN SEEN AS A HAVEN FOR INVESTORS

“That was a shot in the arm for the property market,” says Roshan Madawela, CEO of market intelligence firm RIU. “Lots of people dashed their fixed deposits and switched to property investment.”

The timing of the cut in interest rates was particularly vital as construction costs began

Dispatch

WE’VE SEEN STAGNATION IN PROPERTY DEVELOPMENT, BUT ABSORPTION OF EVERYTHING THAT’S BUILT. PRIMARY ABSORPTION LEVELS ARE AT AN ALL-TIME HIGH

to rocket amid the global energy crunch. As economies began to wake up from the malaise induced by the pandemic and gas prices rose to record highs amid a strain on supply, the focus on property “seemed like a great idea”.

However, it wasn’t long before the cracks of the crisis started to become apparent. The supply chain scarcity caused by the pandemic was being exacerbated by dwindling foreign currency reserves. Cement had become scarce by the fourth quarter last year as were cooking gas and other everyday supplies. In October, the price of cooking gas shot up by almost 90% as the Sri Lankan government abandoned its strategy of price controls on essential goods.

Despite pleas from the IMF for it to be allowed to step in, Sri Lanka remained defiant. “Even if we die, we will not seek assistance from the IMF. This is the final thing I have to say. Even if this government gets destroyed, we are not prepared to reach out to the IMF and destroy the lives of our people,” says government minister Vasudeva Nanayakkara.

Many observers took the government’s refusal of assistance as a sign they had secretly struck some deal for a bailout— possibly with India or China. But by April it was clear that no one was steering the ship and the country was facing one of the world’s worst economic crises, owing over USD24.5 billion to international debtors, including China, while it has just over USD1.9 billion in reserve. Shops were bereft of customers, and many lost their jobs. Stories abounded of people who once enjoyed lavish lifestyles, staying in luxury hotels and jet-setting around the world, finding themselves poor, their businesses decimated.

Chamri Silva, who rose from a working-class background to run a luxury dress boutique on one of Colombo’s most expensive shopping streets, saw a 60% drop in customers.

“I can no longer purchase materials to make my dresses because of the ban on imports. Anyway, people in Colombo can’t afford to shop anymore and no one comes from abroad to buy my dresses,” she said.

By July the central bank hiked interest rates to a 21-year high to reverse soaring inflation of 54.6% year-on-year and food inflation of 80.1% in June.

The change prompted some return to fixed deposits, while developers held back from building new projects as buying construction materials remained difficult to obtain, and due to the outbreak of war in Ukraine in February, even more expensive.

Among those most affected were developers who enjoyed early success with off-plan sales and were now having to build their projects at a hugely inflated cost or delay them entirely.

However, overall demand for property remains strong.

“We’ve seen stagnation in property development, but absorption in everything that’s built. The primary absorption levels

Dispatch

are at an all-time high,” Madawela says, adding that the few exceptions are the super luxury projects that go for around USD2 million to USD3 million upwards.

The continued buoyancy in demand is a testament to Sri Lankans’ trust in the property market, with prices remaining largely stable in Colombo and secondary markets, and even going up.

“One thing about Sri Lanka is it has learned to be resilient following the war and terror attacks. And the property market has been something of a haven during these times,” adds Madawela.

Yet the threat of a crisis still looms large as the August import ban on non-essential items would suggest. The country now has a new president following the ousting of brothers Mahinda and Gotabaya Rajapaksa, president and prime minister respectively, while the introduction of a QR-code system for rationing fuel has largely quelled unrest and allowed people to get on with their lives. Foreign exchange reserves were also said to be replenishing. However, the economy remains fragile.

PROTESTERS THRONGED THE STREETS OF SRI LANKA’S CITIES EARLIER THIS YEAR AS THE NATION’S ECONOMIC WOES REACHED CRISIS POINT

Runaway inflation could peak as early as September and the economy is likely to contract 8% this year, said the central bank governor. Growth, he added, is not likely until the second half of 2023.

Yet the general feeling among analysts is that the worst is over. The new administration have been in talks with the International Monetary Fund (IMF) for a possible USD3billion deal while politicians have started to back the restructuring of state-owned enterprises along with their foreign debts.

Nirmal De Silva, CEO of advisory Paramount Realty, says that Sri Lanka’s residential real estate market remains attractive. New properties might have to be made smaller or more compact to save on building costs, but with the Sri Lankan rupee having fallen sharply against the dollar, many foreign investors will be eager to get a bargain.

“There is a general sense that stability is coming in, but there’s a lot more work to be done,” he concluded.

Dispatch

Battle of the bases

Southeast Asian countries like Thailand and Indonesia are introducing new long-stay visas as they compete for the increasingly valuable digital nomad demographic

By Liam Aran Barnes

The global pandemic spurred a rapid and substantial shift in working practices, as millions worldwide began working from home. Technological advances already allowed people with jobs not tied to a specific location to work remotely, mainly in high-income countries with robust technological infrastructure.

But the widespread adoption of social distancing and lockdown measures, starting in early 2020, accelerated the trend, sparking a surge in the number of international digital nomads. From Argentina to Croatia to the United Arab Emirates, more than 25 countries and territories currently offer remote work or digital nomad visas. They usually admit foreign nationals working independently or for an employer outside the country, allowing them to enter, stay, and work remotely for a defined period. Most schemes last for one year with an option to renew. But few are as generous as Indonesia’s slated Digital Nomad Visa.

BALI IS LIKELY TO BE A CHIEF BENEFICIARY OF INDONESIA’S SLATED NEW DIGITAL NOMAD VISA

According to Tourism Minister Sandiaga Uno, it will be valid for five years—making it

Dispatch

THAILAND RELIES HEAVILY ON TOURISM. GOVERNMENT OFFICIALS, THEREFORE, HAVE A RESPONSIBILITY TO BOOST THE ECONOMY THROUGH INVESTMENT AND JOB CREATION IN THIS SECTOR

the longest such visa in the world—and permits remote workers to live in the country tax-free, if their income derives from businesses based outside of Indonesia.

Guidelines on the application process have yet to be announced. Still, analysts expect the visa to be an immediate success and a muchneeded boost for an economy that was hit hard by the absence of tourism during the pandemic.

Given the long-term nature of the scheme, it is also expected to positively impact rental markets, particularly in Bali, which is already a favoured destination for remote workers, although current visa rules don’t legally facilitate long-term stays.

“The rental market in Bali will not only see more long-term rental agreements but also allows digital nomads to make more quality choices due to the tax incentive on their personal income,” says leading real estate consultant Marciano Birjmohun. “As there is no entry threshold, nomads with different income levels can enjoy the island, creating a broader rental market demand for different price points.”

That said, many digital nomads, especially freelancers and part-time workers, tend to lead efficient and economically sound lives. They prioritise affordable accommodation with access to high-speed tech, workspaces, and wellness amenities. Community engagement and a sense of belonging are also major drawcards. “Although digital nomads usually travel by themselves, this doesn’t imply that they want to be by themselves,” explains Roberto Abusada, strategy and tech manager at HOMA, a Thailand-based developer focused on co-living spaces. “We’ve discovered that community is a central pillar for engagement with our company and within the nomad community. As such, we host networking events, off-site outings, movie nights, and many curated fitness options.” HOMA is one of a growing pool of developers now catering to the nascent market. Launched in 2018, the firm’s debut property in Phuket Town features a co-working space with highspeed WiFi, individual pods and meeting rooms, a fitness centre, a kids club, and a games room. It also provides additional services for long-stay guests, such as visa application support.

HOMA is set to launch another Phuket property in the island’s Laguna district next year and one in Si Racha on the east coast of the Gulf of Thailand in late 2022. And the timing of the company’s expansion couldn’t be better.

Earlier this year, Thailand announced plans to lure wealthy foreigners to refill its coffers. The new scheme, which started taking applications on 1 September, offers work visas to foreigners across four categories. The basic requirement is at least USD1 million in assets and an annual income of USD80,000, although the rules change slightly across the groups.

Applicants for the Highly Skilled Professional category will have to work in a sector deemed essential by the Thai government, while those in the Work-From-Thailand Professionals category, aimed mainly at employees of the tech sector, must be employed by a firm with at least USD150 million in revenue over three years. Those applying for the Wealthy Global Citizens category must invest at least USD500,000 in the local economy, including bonds and property.

Dispatch

“We made this bet in 2018, banking on the thesis that we would have a first-mover advantage in servicing young professionals, and now have the largest digital nomad community in Phuket,” Abusada says.

So far, the response to the scheme has been lukewarm. Many analysts believe that the Thai government’s forecasts are optimistic. It expects 1 million applicants by 2027, and if each contributes USD8,000 to the local economy, the scheme will be worth USD27.6 billion, according to estimates by the Thailand Board of Investment.

In comparison, only 1,200 visas have been issued under the Smart Visa—a precursor program offering incentives to wealthy foreign investors—since its launch in February 2018.

Digital nomads have also taken advantage of Thailand’s Elite Visa in recent years, which permits stays ranging from five to 20 years. But, again, the high fees—starting from THB600,000 for five years—mean it’s off limits for many people.

“There’s too much red tape,” says Bill Barnett, hospitality, tourism, and real estate advisor and managing director of Asia-based consultancy C9 Hotelworks of the newest scheme. “I think it’s overhyped and will underdeliver on the numbers. To be successful, it has to be simpler with fewer barriers to entry.”

WITH ITS BEACHES AND WORLD-CLASS INFRASTRUCTURE, PHUKET IN THAILAND IS ANOTHER APPEALING DRAW FOR REMOTE WORKERS

Only time will tell if Thailand is willing to cater to the many digital nomads who currently don’t meet the prohibitive criteria. Officials will also no doubt be keeping one eye on how Indonesia’s less byzantine-seeming attempt to accommodate remote workers once it officially launches. But with more countries in the region and worldwide welcoming digital nomads, Thailand could soon find that the tourism and real estate sectors aren’t too happy about these missed opportunities.

“Like many other countries in the region, Thailand relies heavily on tourism. Government officials, therefore, have a responsibility to boost the economy through investment and job creation [in this sector],” Abusada says. “Making the visa acquisition process less bureaucratic and more appealing is a great way in which they can achieve both goals.

“They better get on the train.”

The Magnolia Residences

Quezon City, Philippines

The Magnolia Residences is a four-tower condominium complex strategically located within the Robinsons Magnolia complex in New Manila, a wealthy enclave in Quezon City that is home to many exclusive villages and upscale homes.

As such, the high-rise development provides residents a prestigious address as well as the ultimate convenience: immediate access to an expansive shopping centre (Robinsons Magnolia mall), well-appointed offices (Cybergate Magnolia building), and comfortable accommodation (Summit Hotel Magnolia). Accessible to major thoroughfares and transport hubs, the site is within convenient reach of the Ortigas Central Business District as well as top schools, hospitals, and offices. The Magnolia Residences offers ample living spaces in its ready-for-occupancy units, which come in one-bedroom, executive one-bedroom, two-bedroom, executive two-bedroom, three-bedroom, and fourbedroom types, with sizes ranging from 36 sqm to 156 sqm.

The Magnolia Residences has a full range of amenities that blend with the well-designed landscaping to create a relaxing ambiance for all. Each nook is designed to improve the mood of residents and make them comfortable in their own home.

Places like the whimsical tree house, game room, jogging path, barbeque pit, and swimming pool give residents opportunities for fun. Various indoor amenities let friends and family unwind together, with function rooms huge enough for intimate gatherings. Residents can also enjoy quiet time at the library and Wi-Fi lounges or play at the table tennis and badminton courts, among many other amenities.

BEST MIXED USE ARCHITECTURAL DESIGN (PHILIPPINES)

The Magnolia Residences by RLC Residences

FACT BOX

Developer: RLC Residences Product type: Condominium Architect: ASYA Design Partners Launch date: April 2009 (starting with Tower B) Completion date: October 2021 (Tower D) Total land area: 15,075 sqm Number of units: 1,650 Average unit size: 39.63-54.35 sqm Facilities: Private theatre, sundeck, gazebos, pools, jacuzzi, multi-purpose and function rooms, library with WiFi lounge, game room, table tennis room, children’s playground and playroom, gym, aerobics/yoga room, badminton court, rock garden, jogging path, tree house, and more Price range: PHP235,000 per sqm (Tower A to C units); PHP240,000 per sqm (Tower D units)

Contact:

Tel: +63 925 800 0000, +63 2 8636 0888 Email: asksales@rlcresidences.com Address: N. Domingo Street corner Doña Hemady St., New Manila, Quezon City, 1112 Metro Manila, Philippines

Sail Residences

Pasay City, Philippines

SMDC’s Sail Residences is a luxury, bespoke residential development along Sunrise Drive in the massive SM Mall of Asia business and lifestyle complex.

This bayside residential development is inspired architecturally by the mega-luxury cruise ships that navigate the open waters around the Philippines and beyond. This design inspiration takes the form of glass balconies and three viewing platforms that overlook Manila Bay and the rest of the Mall of Asia Complex.

The overall atmosphere of the interior design is consistent with the theme of the development. The lobby is decked with nautical sculptures and other artworks reminiscent of sailboats. The sun’s reflection on water also inspired the naval lighting, wall cladding, and ceiling design in hues of shimmery gold. Many amenities are found at the heart of Sail Residences. The amenity area is landscaped to have a slight curvature, following the S-shaped layout of the pools. The landscaping is lush and lavish with a palette of tropical plants, shrubs and trees. Serving as the pièce de resistance of the central amenity area is a two- storey clubhouse that houses function rooms at the ground floor and a well-appointed fitness centre on the second floor. The professional property management team of Sail Residences is committed to providing a luxurious living experience to residents. The team ensures the safety, security and proper upkeep of the development. Meanwhile, professional staff attend to residents’ needs with a range of concierge services, complementing the hotel-like ambiance of Sail Residences.

HIGHLY COMMENDED

BEST HIGH END CONDO DEVELOPMENT (METRO MANILA)

Sail Residences by SM Development Corporation (SMDC)

FACT BOX

Developer: SM Development Corporation (SMDC) Product type: Mixed-use condominium Architect: Asya Design Launch date: March 2019 Completion date: May 2023 Total land area: 2.2 hectares Number of units: 2,829 Average unit size: 38.75 sqm Facilities: Commercial strip, three-level viewing deck, gazebo, play area, seating area, wood deck, trellis, outdoor clubhouse, adult pool, kiddie pool, lap pool, water feature, gym, paved area, centre island, bubblers, pool bridge, lawn, pool deck, jacuzzi, al fresco walkway, and more Monthly maintenance fees: PHP92 per sqm Price range: PHP8.9-25.6 million

Contact:

Tel: + 632 8858-0300 Email: smdc.com/contact Address: 15/F Tower B, Two E-com Center, Bayshore Avenue, Mall of Asia Complex, Pasay City, Metro Manila 1300, Philippines

Urban Deca Homes Ortigas

Pasig City, Philippines

Urban Deca Homes Ortigas is a 22-block condominium development along Ortigas Avenue Extension. The project is accessible to and from the city of Makati and Bonifacio Global City (BGC), two of the Philippines’ financial hubs, as well as major commercial centres in and around Metro Manila like Eastwood, Libis, Cubao, and Cainta.

With its coveted location and reasonable price points, the development is geared toward young renters who aspire to own a home near their workplaces. The development offers 19,000 wellproportioned units, many of which are available through financing from Pag-Ibig Fund and select banks, as well as through 8990 Holdings Inc. itself.

Urban Deca Homes Ortigas is close to the offices of many IT-BPO (information technology and business process outsourcing) companies, which employ many young workers in the Philippines. The surrounding area is also home to many top employers in the fields of finance, manufacturing, and medicine.

Such proximity to business hubs translates to plenty of savings for residents who commute to work. For residents who drive to work, Urban Deca Homes Ortigas offers more than 3,330 car parking slots.

The area around Urban Deca Homes Ortigas presents many opportunities for leisure and recreation, but the project offers some of those onsite. The development has a 1.3-hectare open space, including basketball courts, a lagoon, playground, adult activity area, and clubhouse.

WINNER

BEST AFFORDABLE CONDO DEVELOPMENT (METRO MANILA)

Urban Deca Homes Ortigas by 8990 Holdings, Inc.

FACT BOX

Developer: 8990 Housing Development Corporation Product type: Condominium Launch date: 2019 Total land area: 13.2 ha Number of units: 19,046 Average unit size: 30.6 sqm Facilities: Open spaces, basketball courts, lagoon, playground, adult activity area, clubhouse, and more Monthly maintenance fees: PHP55 per sqm Price range: PHP2.6-3.4 million

Contact:

Tel: +63-08-898-2811, +63-17-818-025, +63-18-985-3385, +63-17-869-6993 Email: 8990cares@8990holdings.com Address: 2nd Flr. PGMC Bldg., 76 Calbayog cor. DM Guevarra St., Mandaluyong City, Philippine

Urban Deca Homes Banilad

Mandaue City, Philippines

Urban Deca Homes Banilad is a threetower condominium development also known as the first high-rise project of 8990 Holdings Inc. in Metro Cebu. The development is strategically located across Oakridge Business Park, a hub of retail destinations, offices, event spaces, and meeting venues in the bustling Banilad area of Mandaue City.

Urban Deca Homes Banilad consists of 3,264 condominium units with a choice of two-bedroom and three-bedroom configurations. Located along Elias V. Espina St. in Sitio Orel, Urban Deca Homes Banilad is accessible to major thoroughfares such as H. Cortes and A.S. Fortuna where public transport is easily available.

Shopping centres, healthcare facilities, and other landmarks in Metro Cebu are within proximity of Urban Deca Homes Banilad. Set adjacent to the Pink Sisters Adoration chapel, the development is only 1.3 kilometres from Gaisano Country Mall. It is also just 1.6 km from Vicente Gullas hospital and 2.5 km from the University of San Carlos, one of the premier higher education institutions in the Visayas region.

HIGHLY COMMENDED

BEST AFFORDABLE CONDO DEVELOPMENT (METRO CEBU)

Urban Deca Homes Banilad by 8990 Holdings, Inc.

FACT BOX

Developer: 8990 Housing Development Corporation Product type: Condominium Architect: Scheirman Construction Consolidated Inc. Launch date: October 2022 Completion date: December 2026 Total land area: 18,880 sqm Number of units: 3,264 Average unit size: 30.60 sqm Facilities: Children’s playground, clubhouse, covered basketball court and fitness area, swimming pool, entrance gate with guard house, CCTV (indoor and outdoor), perimetre fence, and more Monthly maintenance fees: PHP50 per sqm Price range: From PHP98,000 per sqm

Contact:

Tel: 0999-8878-820 Email: 8990docs@gmail.com Address: 8990 Bldg., Negros St., Cebu Business Park, Cebu City, Philippines

King Crown Infinity

Thu Duc City, Ho Chi Minh City, Vietnam

King Crown Infinity is a commercial and retail complex with high-class apartments being developed by BCG Land in Binh Tho Ward of Thu Duc City. The mixed-use site is strategically located at the “central point of coordinate” frontage forming the backbone road at the corner of Vo Van Ngan and Nguyen Ba Luat Streets.

King Crown Infinity is designed to change the skyline of Thu Duc City, a new urban unit within Ho Chi Minh City. The development is mainly composed of two 30-storey towers called Artemis and Apollo, home to a wide selection of apartments, shophouses, and officetel units. Both buildings utilise glass fibre reinforced concrete (GFRC), creating curvaceous blocks with outstanding durability and stability. The project also includes a five-storey podium that serves as an all-in-one, multiutility complex that responds to the dining, shopping, and entertainment needs of residents at their doorstep. In addition, the development boasts more than 25 international-standard internal facilities envisioned to redefine the standards of luxury living in the city and cater to the tastes of elite investors.

The project is managed and operated under five-star international hospitality brand The Ascott Limited. Living up to The Ascott Limited’s sophisticated, classy service standards, King Crown Infinity is one of the most compelling residential projects rising in the downtown core of Thu Duc City.

WINNER

BEST HIGH END CONDO DEVELOPMENT (HCMC)

KING CROWN INFINITY by BCG LAND

FACT BOX

Developer: BCG Land, a member of Bamboo Capital Group Product type: Commercial complex and luxury apartments Architect: The Five & Partners Completion date: Q2 2024 (expected) Total land area: 12,652 sqm Number of units: 28 (officetel), 26 (shophouse), 724 (apartment) Average unit size: 51-155 sqm Facilities: Infinity pool, podium commercial centre, children’s playground, internal park, restaurant, café, gym, spa, BBQ, pool bar, jacuzzi, and elevated jogging path Monthly maintenance fees: USD29,000 per sqm Price range: From USD4,500 per sqm

Contact:

Tel: +84 28222 16868 Email: info@bcgland.com.vn Address: 22A Road 7, An Phu Ward, Thu Duc City, Ho Chi Minh City, Vietnam

MIDORI PARK The GLORY

Binh Duong New City, Vietnam

MIDORI PARK The GLORY is the first homeresort project in Binh Duong New City (BDNC), an environmentally protected and green lifestyle development that has been praised by the ICF (Intelligent Centre Forum) as one of the Top 7 Intelligent Communities in the world. The project, located along Bui Thi Xuan Street, is a hot spot for the two biggest industrial parks in Binh Duong: VSIP II and VSIP III, with many educational, entertainment, financial, and sports facilities, among others.

Jointly developed by Becamex Tokyu and NTT UD Asia, MIDORI PARK The GLORY is built to Japanese standards. The development is located in MIDORI PARK where greenery and water features cover up to 56% of the site. All 992 units in the project stand in harmony with nature, where families can enjoy fresh air and children can play in wide open spaces. This luxurious resort residence project features the largest man-made waterfall in Vietnam, with a 12-metre-high, 43-metrewide connection to the green way secluded in the heart of the city. Another highlight is the sky deck on the building’s 22nd floor, looking out to magnificent views of BDNC. More than 20 facilities cater to residents’ health, fitness, and spirituality such as the meditation garden, gym, yoga area, and tennis courts.

MIDORI PARK The GLORY is the first condominium property in BDNC to provide a co-working space, in accordance with the working-from-home trend. The project also offers a cloud WiFi system, accommodating the diverse working demands of residents.

HIGHLY COMMENDED

BEST CONDO DEVELOPMENT (BINH DUONG)

MIDORI PARK The GLORY by BECAMEX TOKYU CO., LTD

FACT BOX

Developer: H9BC Investment Company Limited Product type: Condominium Architect: FUJINAMI (Japan) Launch date: 2022 Completion date: 2024 Total land area: 19,196 sqm Number of units: 992 Average unit size: 48.03 sqm (one-bedroom), 61.26 sqm (two-bedroom), 107.72 sqm (three-bedroom) Facilities: Gym, infinity swimming pool, meditation yard, tennis courts, BBQ garden, and more total 20 one Monthly maintenance fees: USD 0.77 per sqm (VAT excluded) Price range: From USD1,400-1,600 per sqm

Contact:

Tel: +84 942 119 109 Email: info@becamex-tokyu.com Address: SORA Gardens II Building, Lot C17, Hung Vuong Boulevard, Hoa Phu Ward, Thu Dau Mot City, Binh Duong Province, Vietnam