By P K Balachandran | ENS - COLOMBO | New Indian Express
10th December 2012 11:35 AM
Since the end of the 30-year-long separatist war in
Sri Lanka in 2009, several major Indian real estate companies began projects in
Colombo with the hope of cashing in on post-war interest among well-heeled
Lankans in acquiring luxury apartments with a variety of facilities.
Among the Indian companies to launch projects in the
capital city had been L and T, Accor Developers, Eco Homes, Shreyas Developers,
Suchir India and Krrish.
However, many of them failed to take off. They have
had to wind up their businesses and quit, leaving flat buyers in the lurch.
This trend had caused concern among India’s policy makers and those promoting
Indian investment in Sri Lanka.
But attempts were now being made by a section of the
investors to diagnose the problem and take corrective steps. A source in the
realty sector told Express that the basic mistake that the Indian investors
made was that they expected the Indian model to work in Sri Lanka and were
shocked to find that it did not.
“In India, the promoter first seeks bookings from
buyers and finances the venture with the advances made. But this is not the
system in Sri Lanka. Here, flats are sold after they are almost built fully.
Therefore, in Sri Lanka, if an Indian developer had expected 100 bookings, he
might have got only 10, ” said a source in Platinum 1, an ambitious Indian
condominium project coming up in a prime area in Colombo, which was working on
the basis of the Sri Lankan model.
“We at the Platinum Realty Investment Pvt Ltd decided
to complete the work up to the super structure level before announcing the
launch of the project. Today, the customer can walk-in and view his chosen
space prior to purchase. This provides the potential investor with the peace of
mind that comes with knowing that his investment is secure. Platinum l is not
just an ambitious plan on paper,” the source said.
The company, which was a consortium of Paharpur
Cooling Towers Group of India and Pragnya Fund, a Mauritius-based Private
Equity Fund, had already spent USD 20 million out of the USD 35 million
earmarked for the 70-apartment project.
