Colombo, a Modern City in the Making…

Colombo, a modern city in the making | July 2013 |

Colombo, a modern

city in the making…  Colombo city calls for the need of development towards an urbanized metropolis in transforming to a regional hub.

 Steps have been taken by means of improving the quality of the road network and beautification of the city to make the metropolis one of the greenest and cleanest cities in Asia. To cater to the required capacity increase in hotels, apartments, office and retail space, many projects including mixed developments have been proposed.

 However due to back and forth movements in certain policies and other delays, only few out of the announced projects are currently underway while the others are expected in the medium term. Therefore due to the disparity between the currently needed capacity and actually completed, a deficit in supply exists. Thus we believe that there would not be a glut due to these projects being automatically phased out.

 The government through the state owned Urban Development Authority is involved in the city development whilst many private companies have proposed projects. However out of the listed companies, few such as John Keells Holdings (JKH : LKR260.10), Colombo Land and Development (CLND : LKR43.70), Overseas Realty (OSEA : LKR18.50) and Access Engineering (AEL : LKR20.30) have grasped such opportunities.

 In the five star city hotel segment a shortfall of c.1,500 hotel rooms (by 2016) would be seen in meeting the expected tourist arrivals trend where the city is currently equipped with 2,000 hotel rooms. A deficit would be evident till 2016/17 as only two five star hotels out of the proposed projects are off ground currently (of capacity 700 rooms).

 At present, the total number of apartment projects ranging from standard to luxury levels in and around Colombo adds up to c.100, with most of these falling into the standard category. The demand for luxury to semi luxury apartments mainly come from Sri Lankan expats on motive of renting the purchased units. Hence the gradual increase in apartment capacity would meet the slowly growing demand for apartments in line with the maturing city.

 Due to limited prominent office space available in the capital and few office spaces been proposed, ample opportunity in this segment exists.

 Proposed retail space and other mixed developments would see the demand changing mainly with the increasing number of tourists from the Indian sub-continent whilst the gaming industry would go hand in hand to create a new demand wave. The country having an annual tourist count exceeding 1 mn would see an additional demand with the growth in the casino industry which is yet to see a global player entering the fray. However it would be a matter of time and we believe that this would create further upside in demand for hotels, apartments and retail space. http://investinmiami.com /

CONTENTS

Pg. No.

OVERVIEW 3 MIXED DEVELOPMENTS Havelock City 6 Krrish Square 8 AVIC Mixed Development 9 Crown Mixed Development Project 10 Integrated Resort by John Keells Holdings 12 Hyatt Regency Colombo 14 EoN Resorts 16 Liberty Square & Tower 18 Platinum One 19 APARTMENTS Fairway Sky Gardens 20 Iconic 110 Parliament Road 21 Altair Luxury Residencies 23 ON320 Apartments 25 Destiny Apartments, Malls & Residency 27 HOTELS MOVENPICK Colombo 27 Shangri-La Colombo 28 Sheraton Colombo 29 Marino Sands Hotel 30 ITC Hotel 31 Sancity Business Hotel 32 MALLS Colombo City Centre 33 OFFICE SPACES Access Realities 2 Tower 35

2 | P a g e TKS Securities (Pvt) Ltd

Colombo, A modern city in the making | July 2013 | | TKS Research

Colombo, the capital city established by the British colonial rule expanded with the growth in the overall economy, although the expansion was curtailed due to the three decade civil war. Hence as consequences of the war the city lacks in infrastructure while not being urbanized in addition to being behind many of its regional peers thus giving ample space for the metropolis to develop. Therefore the need for the airport and Colombo port to be expanded along with other infrastructure to be improved arises to accommodate the increasing tourists and business travellers, returning expats, and significant estimated growth in FDIs. Thus urbanization and modern development is much needed for the fast becoming regional hub.

Therefore we recognize areas such as road network coupled with free flow of traffic within the city, hotels and residential accommodation, office space, recreational, shopping and entertainment to be developed and fit to the new phase of changing Colombo. Thus a cleaner and a well maintained topographic city with an efficient transport network is essential.

In addressing these grey areas in the Colombo city many steps have been taken by means of improving traffic controlling, the quality of the road network, various beautification projects to create a greener environmental and adding up of recreational spaces. Thus in a state of transformation in the post war years the metropolis has emerged as one of Asia’s greenest and cleanest cities and is making a strong comeback to reach standards of Asia’s garden city, Singapore. Moreover shopping and recreational spaces have been developed to meet the retail demand where the state has taken steps through the state owned Urban Development Authority (UDA). Colonial buildings and other large buildings in prime locations in the city have been refurbished and rented out to earn income whilst catering to the needed demand by the UDA. Meanwhile private entities have also come to the forefront by announcing various developments, although very few listed companies such as John Keells Holdings (JKH : LKR260.10), Colombo Land and Development (CLND : LKR43.70), Access Engineering (AEL, LKR20.30) and Overseas Realty (OSEA : LKR18.50) have launched projects. Despite the announcements on many of these projects very few in fact have broken ground.

In this report we have identified 9 large scale mixed development projects, 5 standalone apartment projects and 6 three to five star hotel projects which have been announced in and around the city of Colombo. The developments we have identified together would add c.3,000 apartment units and more than 3,000 three to five star hotel rooms in the coming 4-5 years. However we do not expect a glut in hotels, apartments and retail space as the development would be automatically phased out.

Mixed Development projects In the mixed development arena, Havelock City has already completed and sold 2 apartments towers (226 units) and another 2 apartment towers (218 units) are under construction. Meanwhile Hyatt Regency and Platinum One have partly completed structures for majority of the level of storeys. However apart from these developments all other projects are yet to break ground. Therefore we believe that the Colombo metropolis would function with a marginal capacity increase during the next 2-3 years where we would not see a real growth until the next 4-5 years.

Market for Hotels Currently Colombo is only equipped with c.2,000 five star rooms which are in short supply. With the completion of the Movenpick and Hyatt we would see another c.700 rooms being added during the next 3-4 years. We believe there would be demand for city five star rooms with the expected growth in business, crew and MICE travelers. Further the infrastructure development in the country and being strategically located to expanding economies and large source markets for tourism such as India, China, and Singapore, the country offers good potential for growth.

3 | P a g e TKS Securities (Pvt) Ltd

Colombo, A modern city in the making | July 2013 | | TKS Research

Market for Apartment units Apart from these city hotels coming up, we are also seeing new luxury and semi luxury in addition to the standard type of apartments being developed in and around Colombo. At the moment we have c.100 apartment projects ranging from standard to luxury levels in Colombo and the suburbs where most of them are fully sold out or 80% sold. While we understand that the highest demand is triggered for semi luxury apartments and when further analyzed it was evident that most of those apartment units are bought by Sri Lankan expats on the motive of renting out to another party where very few actually live there. It is also seen that some degree of demand for such apartment units come from families of businessmen living in rural areas aiming for convenience for schools, higher education and employment associated with the locations of apartments. In line with the expected growth in this segment in the medium term we also expect rental yields to pick up, despite being at low levels of c.6-7% currently.

Unlike in most emerging economies, the urban population in Sri Lanka has not increased in accordance with the increase in population over the past five decades and currently, only c.15% of the population live in cities. Despite issues regarding the classification of urban and rural areas, it is estimated that Sri Lanka has a higher percentage of its population living in rural areas.

Another factor to also consider is the limited number of expat Sri Lankans living in the west who are in the condominium market and since the end of the conflict, this segment has been at the frontline in picking up luxury apartments. The peak levels of expat interest in Sri Lankan real estate market maybe fast approaching or even possibly behind us in which case the rate of demand growth will slow down.

We believe Colombo is not yet ready to take up this many apartment units and if all these developments come at once, Colombo would face a glut of apartment units and it would be difficult to market these luxury condominiums to the locals at present given its pricing. Therefore in a way these projects getting delayed is a good thing and a gradual addition of capacity is needed when the city matures.

Therefore we believe a gradual addition of apartment units are needed to match the change in the Sri Lankan real estate market with the expected life style changes and the returning of the Sri Lankan expats who has reached their retirement age.

Market for Office Space After the conflict ended in 2009 the demand for office space in Colombo increased drastically. However at that time only sizable office spaces available in Colombo were, the World Trade Centre (750,000 sqft in total), HNB Towers and Access Towers (200,000 sqft in total). Subsequent to the demand we saw the rents also doubling in Colombo commercial complexes. Thereby we believe there is significant opportunity for office space developers and at the moment we have only seen very few new commercial buildings planned. Thus office space would continue to be in demand in line with the transformation towards a hub status of Colombo together with needs of increasing BPO operations in the country.

4 | P a g e TKS Securities (Pvt) Ltd

Colombo, A modern city in the making | July 2013 | | TKS Research

Market for Retailing, Gaming and Entertainment Sri Lanka’s retailing industry is mainly driven by supermarkets, clothing and white goods. In the past we have not seen a great demand for retailing space in Colombo and most the retailing outlets were confined to smaller shops (apart from some clothing outlets). However post war era has seen a significant expansion in the retail segment (mainly white goods and branded apparel) with the entry of leading international brands thus demand for sizable retail space has also increased.

Most of the new mixed development projects announced has a significant retailing space (on ave. 50,000 sqft) and we believe these space would be taken up by either local or foreign retailers. Moreover it is unlikely that one retailer would take up this entire space but more likely that this space would be divided among few retail operators.

Sri Lanka’s gaming and entertainment industry looks optimistic with interest being shown from both local and foreign parties to enter the Industry. Sri Lanka’s casino market is a fragmented industry with six licenced casinos operating in Sri Lanka, namely Bellegio, Ballys, MGM, Stardust, Marina Colombo and Ritz. In the six years leading up to 2011 casinos contributed LKR1.7 bn in tax revenue. The targeted market for gaming clientele would be wealthy Indian and Chinese Players. As seen through the enhancement of the gaming industry in Maccau and Singapore (both regions operating a multi-billion dollar industry dwarfing the iconic Las Vegas) it invariably leads to more tourist arrivals where Sri Lanka could expect more tourist arrivals from India, China and the Middle Eastern region. Thus the huge growth potential in the industry particularly due to the current scale of the casino industry in Sri Lanka citing the Indian traffic as a lucrative target market is further evident with the interest shown by industry tycoons such as Packer (as indicated by the media). This could lead to the expansion of tourist arrivals from other regions as well which would assist in the demand for hotels, apartments and retail space.

Source : maps.google.lk / TKS Research

5 | P a g e TKS Securities (Pvt) Ltd

Colombo, A modern city in the making | July 2013 | | TKS Research

MIXED DEVELOPMENTS Havelock City

Havelock City is a mixed development project consisting of 1,080 luxury condominiums, large shopping mall and two office towers. The development is spread across 18 acres of land bank just 6.0 km away from central Colombo. Under phase I two residential apartments consisting of 226 units were completed and currently 100% occupied. Phase II is now in progress which would construct 2 more towers consisting of 218 apartment units and expected to be completed in 2014.

Fact Sheet Fact Details Venture Name Havelock City Project Company Overseas Reality Ceylon and Bank of Ceylon Managed by Mireka Capital Land Pvt Ltd Investment USD350 mn Location Havelock Road, Colombo 6 Land Size 18 Acres Architectural designer East China Architecture and Design Institute Other designers The Design Group Five International Pvt Ltd Details of the Project 10 Towers 36 meter Beam Bridge (connecting the residential project and Skelton Road) 1,080 Luxury Condominiums, A Shopping Mall, 2 Office Towers Apartment Range 2 bed room, 3 bed room, penthouses Selling Price LKR30 mn - LKR125 mn Average Size 1,292 - 1,492 Sqft Project Holding Overseas Realty (OSEA : LKR18.50) 60% and Bank of Ceylon 40% Tax holiday 10 years Source http://www.havelockcity.lk/, http://www.sundaytimes.lk/101212/BusinessTimes/bt22.html

Source : havelockcity.lk / TKS Research

6 | P a g e TKS Securities (Pvt) Ltd

Colombo, A modern city in the making | July 2013 | | TKS Research

Source : maps.google.lk / TKS Research

7 | P a g e TKS Securities (Pvt) Ltd

Colombo, A modern city in the making | July 2013 | | TKS Research

MIXED DEVELOPMENTS Krrish Square

Krrish Square is expected as a multi-purpose residential and commercial complex which would be built on a 4.3 acre land. It will consist of 3 towers with a floor count of 95, 90 and 65 and the project once completed is currently ranked as the 10th largest of its kind in the world. Development area would be 5.0 mn Sqft whilst all towers would be built on 10 floor podiums with 3 being residential and the other housing a 7 star hotel and a high end retail complex.

Fact Sheet Fact Details Venture Name Krrish Square Project Company Krrish Transworks Colombo Pvt Ltd Investment USD650 mn Location York Street Colombo 1 (old Transworks Square) Land Size 4 - 4.5 Acres Land ownership 99 year lease from UDA Land Transfer Price LKR5 bn (USD39.6 mn) Architectural designer Kukreja Associates Other designers Wilson Associates (New York) Dandi Living Ltd. (London) Edouard Francois (France) Details of the Project 4 Towers built on 10 floor podiums Podium: 2 floors for malls, 2 floors for offices, and 8 floors (two basement) for parking. TW 1 - Podium + 80 floors, TW 2 & 3 - Podium + 55 floors TW 4 - Podium + 80 floors + 60 floors (separate adjacent tower) 7 Star Hotel High end Retail Complex Sky lounge on the top floor. Separate entry and exit for residents, offices, and malls Roof top swimming pool with sea view. Multiplexes with six screen Sky lounge on the top floor. Viewing Deck on the top floor. Helipad Selling Price LKR31,400 per Sqft on apartments Average Size 2,900 – 4,000 Sqft per apartment Project Holding The Krrish Group, India Tax holiday 10 year tax holiday and 6% thereafter for 15 years Source http://www.krrishcolombo.com/ Source : TKS Research/ 08 July 2013

8 | P a g e TKS Securities (Pvt) Ltd

Colombo, A modern city in the making | July 2013 | | TKS Research

MIXED DEVELOPMENTS AVIC Mixed Development

This being the first expected to be completed from the projects in the pipeline, the development would consist of a hotel, apartment complex and retail space on a land plot of nearly 2 acres in Colombo 3. The project would be done by Avic International Hotels Lanka Limited, the Sri Lankan unit of Chinese firm CATIC (China National Aero-Technology Import & Export Corporation).

Fact Sheet Fact Details Venture Name Avic Mixed Development Project Company Avic International Hotels Lanka Limited Investment USD300 mn Location Land between Galle Road and Duplication Road in Colombo 3 Land Size 2 Acres Land ownership Freehold rights by developer Land Transfer Price Rs. 1.85 bn (USD22.0 mn) Details of the Project 50 storied Luxury Hotel Residential apartments Retail space Project Holding Avic International Hotels Lanka Limited Tax holiday 12 year tax holiday Project duration 2 years Source http://www.sundaytimes.lk/130630/business-times/chinese-firm-avic-gets- special-status-for-a-mixed-development-colombo-project-50142.html Source : TKS Research/ 08 July 2013

Source : maps.google.lk / TKS Research

9 | P a g e TKS Securities (Pvt) Ltd

Colombo, A modern city in the making | July 2013 | | TKS Research

MIXED DEVELOPMENTS Crown Mixed Dev. Project

The Australian based Crown group will invest USD350 mn on a mixed development project along with a Sri Lankan investor. Government permission was granted for the project under the Strategic Development Act purely for a tourism project.

Fact Sheet Fact Details Venture Name Crown Complex Project Company Lake Leisure Holdings Pvt Ltd Investment USD 350 - 400 mn Location Bordering D.R. Wijewardena Mw and Sir Chittampalam Mw Colombo 10 Land Size 2 - 2.5 Acres Land Transfer Price Rs. 2.9 bn (USD22.0 mn) on a 50 year lease Details of Project 1.0 mn Sqft development area 400 Roomed Luxury Hotel 20,000 Sqft Conference Hall 6 Signature Restaurants Designer shopping area Banquet Hall 50,000 Sqft Casino Estimated Room Price USD 450- 500 Project Holding Rank Entertainment Holdings Pvt Ltd (45%) Crown Limited (45%) Singaporean individual or Concern (10%) (Private Equity) Tax holiday 12 year tax holiday Source http://www.sundaytimes.lk/130428/business-times/36-storey-crown-colombo-casino- from-packer-conglomerate-41976.html http://www.lankabusinessonline.com/news/sri-lanka-crown-project-land-transfer- approved/1698139062

Source : TKS Research/ 08 July 2013

10 | P a g e TKS Securities (Pvt) Ltd

Colombo, a modern city in the making | July 2013 |

Source : maps.google.lk / TKS Research

TKS Securities (Pvt) Ltd 11

Colombo, A modern city in the making | July 2013 | | TKS Research

MIXED DEVELOPMENTS Integrated Resort by JKH

The leading diversified which is yet to officially announce details of its mega mixed development project at its current headquarters in the heart of Colombo. We assume that the valuable land bank would be developed as a mix of hotels, retail and office space, residential apartments, conference facilities and a possible casino. As announced by the Ministry of Investment Promotion, an investment of USD850 mn has been approved for the project although details are to be confirmed by the company.

Fact Sheet Fact Details Venture Name Integrated Resort by John Keells Holdings Project Company Waterfront Properties, a subsidiary of John Keells Holdings Investment USD850 mn (as announced by the Ministry of Investment Promotion) Location JKH Headquarters, Glennie Street, Slave Island, Colombo 10 Land Size 10 Acres Land ownership John Keells Holdings (JKH:LKR249.90) and its subsidiaries, Ceylon Cold Stores (CCS:LKR165.00), John Keells PLC (JKL:LKR86.50), John Keells Properties and Waterfront Properties Land Transfer Price Land already owned by the above parties on freehold and partly on leasehold basis Assumed Details of the Project 4 mn Sqft of built up area 500 roomed 5 star hotel 400, 000 Sqft retail space 150,000 Sqft office space 350 units of apartments Possible Casino venture Conference Hall Assumed Selling Price USD250 per Sqft for apartments Assumed timeline 5 years Source www.cse.lk, http://www.adaderana.lk/news.php?nid=23344

12 | P a g e TKS Securities (Pvt) Ltd

Colombo, A modern city in the making | July 2013 | | TKS Research

Source : maps.google.lk / TKS Research

13 | P a g e TKS Securities (Pvt) Ltd

Colombo, A modern city in the making | July 2013 | | TKS Research

MIXED DEVELOPMENTS Hyatt Regency Colombo

Hyatt Regency is the first the Hyatt branded hotel which is to be established in Sri Lanka through Hyatt International South West Asia Ltd, an affiliate of the Chicago based Hyatt Hotels Corporation. Sinolanka Hotels & Spa Pvt Ltd who has acquired the 242 perch land for LKR4.2 bn (on a 99 year lease), which is located on Galle Road opposite Temple Trees has entered into a management agreement with Hyatt International South West Asia Ltd to construct a 5 star hotel complex with 475 rooms and 90 serviced apartments with amenities of a lobby lounge, an all-day dining, multi-cuisine restaurant, three specialty restaurants, a bar, eight spa treatment rooms, a fitness center, a swimming pool, and a Regency club lounge. Additionally the hotel once built would offer more than 17,000 Sqft (1,579 sq m.) of enclosed meeting space, including a 7,500 Sqft. (696 sq m.) ballroom. The project was approved by the cabinet as a strategic development project under the SDP act No 14 of 2008 which provides a series of concessions for a specific period of time as well as a tax holiday. Moreover there would be a ten year exemption on income tax and tax on dividends would be exempted. At the end of the period only 6% tax would be charged for the next 15 years which is half the prevailing tax rate for hotels. Expatriate workers would be exempted from PAYE Tax providing employees are restricted to 20. Likewise there will be no VAT for imports and local purchase of project related goods. This Project which began in 2008 as Ceylinco Celestial Residencies was halted after Ceylinco faced financial difficulties and was re-launched by Sinolanka in 2011.

Fact Sheet Fact Details Venture Name Hyatt Regency Project Company Sinolanka Hotels & Spa Pvt Ltd Investment USD159 mn Location Galle Road Colombo 3 (opposite temple trees) Land Size 242 Perches Land ownership Leasehold rights Land Transfer Price LKR4.2 bn (USD32 mn) Contractor Maga Engineering Pvt Ltd Details of the Project 5 Star Hotel complex of 43 Floors 475 Hotel Rooms 90 Serviced Apartments Meeting Space (17,500 Sq Ft) Ball Room ( 7,500 Sq Ft) Timeline Expected to be open in 2014 - 15 Source http://www.thesundayleader.lk/2012/10/27/hyatt-regency-colombo-to-open- in-2014/

Source : TKS Research/ 08 July 2013

14 | P a g e TKS Securities (Pvt) Ltd

Colombo, A modern city in the making | July 2013 | | TKS Research

Source : maps.google.lk / TKS Research

15 | P a g e TKS Securities (Pvt) Ltd

Colombo, A modern city in the making | July 2013 | | TKS Research

MIXED DEVELOPMENTS EoN Resorts

A mixed development of USD170 mn consisting of a luxury hotel, apartments and a convention centre would be developed in close proximity to Colombo Fort at Colombo 10 by the Maldivian based resort developer, Eon Resorts.

Fact Sheet Fact Details Project Company EoN Resorts Investment USD170 mn Location Current Cey-Nor Restaurant Premises at D.R.Wijewardena Mw Colombo 10 Land Size 80 Perches Details of the Project 300 roomed luxury hotel 100 luxury apartment units 150,000 Sqft retail space 2,000 Sqft food court Convention centre with 2,000 seating capacity Source http://www.lankabusinessonline.com/news/maldives-eon-resorts-to-build- us$170mn-hotel-in-sri-lanka/480032839, http://www.eonresorts.com/

Source : maps.google.lk / TKS Research

16 | P a g e TKS Securities (Pvt) Ltd

Colombo, A modern city in the making | July 2013 | | TKS Research

MIXED DEVELOPMENTS Liberty Square & Tower,

Pettah Development

In line with UDA’s Colombo Pettah development plan, Liberty Square along with the Liberty Tower would be built in 5 acres of Colombo Pettah land in a period of 2 years with construction commencing in September 2013. The entire project would be carried out by Colombo Development and Company (CLND:LKR45.00) as two phases where the 1st phase would consist of the Liberty Square and Towers whilst the second phase would be in 10 acres in the vicinity on an approximately 15 year timeline.

Fact Sheet Fact Details Venture Name Liberty Square & Liberty Tower Project Company Colombo Land and Development Company Investment Apprx.USD70 mn Location Peoples Park, Colombo Pettah (bordering Bodhiraja Mw, Olcott Mw, Saunders Place, Peoples Park) Land Size 5.0 Acres Land ownership 99 year lease from UDA Total project cost Apprx.USD70 mn Details of the Project 66 5-storey commercial units (of 500,000 Sqft) and 1 Tower of mixed development (20 storey 300,000 Sqft) under phase 1 Features Mixed development including Retail, office space, entertainment (cinema halls and food court) and apartments (targeted at working staff of Pettah traders) Parking space of 4 floors Sky lounge on the top floor. Front and rear entrance together with lifts and stairways for all commercial units Swimming pool Timeline Construction to begin in September 2013 and due to be completed in 2 years Source http://colomboland.com/

17 | P a g e TKS Securities (Pvt) Ltd

Colombo, A modern city in the making | July 2013 | | TKS Research

Source : maps.google.lk / TKS Research

18 | P a g e TKS Securities (Pvt) Ltd

Colombo, A modern city in the making | July 2013 | | TKS Research

MIXED DEVELOPMENTS Platinum One

Lead by an Indian venture, Platinum One mixed development has seen its super structure being completed and is expected to be completed in 2015. The 140,000 Sqft, 20 storey building is to be include high end shopping areas and residential units and would be an investment of c.USD20 mn.

Fact Sheet Fact Details Venture Name Platinum One Project Company Platinum Realty Investments (Pvt) Ltd Investment USD20 mn Location Galle Road, Colombo 3 (on top of Bagatalle Road) Land Size Apprx.80 perches Architectural designer Manitayakul Associates of Thailand and Design Advocacy of Sri Lanka Project completion year: 2015 Details of the Project 20 floor state of the art building 66 residential apartments and 4 penthouses Automated valet car parking system with 216 parking slots Convention hall with 150 seating capacity Swimming pool, modern gym Commercial space of 60,000 Sqft Sources: http://www.sundaytimes.lk/130324/business-times/platinum-1-strategy-of-selling-luxury- apartments-after-completing-the-super-structure-sees-success-37699.html, http://www.platinum1.lk/aboutus.html

Source : maps.google.lk / TKS Research

19 | P a g e TKS Securities (Pvt) Ltd

Colombo, A modern city in the making | July 2013 | | TKS Research

APARTMENTS Fairway Sky Gardens

Fairway Sky Gardens is the third luxury apartment building undertaken by the Fairway group with the previous projects Fairmount and Fairway Residencies winning ICTAD Awards for construction excellence offering a stunning view of surrounding wetlands, lakes, waterways, forests and the Colombo cityscape some apartments have their own sky garden while the rooftop flaunts Sri Lanka’s highest sky garden. With amenities of a swimming pool, gymnasium, sports complex, business centre, club house / diner, heli-pad etc sky gardens offers the ultimate in luxury apartment living.

Fact Sheet Fact Details Venture Name Fairway Sky Gardens Project Company Fairway Sky Homes Pvt Ltd Location Down Buthgamuwa Road Kotte (near HSBC Call Centre) Architectural designer Milroy Perera Associates Pvt Ltd

Contractor Maga Engineering Pvt Ltd Details of the Project 31 Floors

120 Units

Swimming Pool, Gymnasium, Business Centre, Sports Complex

Club House / Diner, Heli-Pad, Rooftop Sky Garden, Certain Apartments Have Their own Sky Gardens. Selling Price LKR25 - 50 mn Average Size 1,040 – 4,000 Sqft Source http://www.skygardens.lk/contact.php

Source : TKS Research/ 08 July 2013

Source : maps.google.lk / TKS Research

20 | P a g e TKS Securities (Pvt) Ltd

Colombo, A modern city in the making | July 2013 | | TKS Research

APARTMENTS Iconic 110 Parliament Road

'110 Parliment Road' is a luxury apartment complex set up by the Apurva Natvar Parikh Group India making an investment of approximately USD30 mn which is to be located in Rajagiriya on the border of the city of Colombo. The project which was launched in October 2011 is expected to be completed by June/ July 2014. With views of the Colombo Golf Course and the National Bird Sanctuary it spans across 1.5 acres with a 380,000 square foot complex. This 25 floor complex consists of 188 apartments as well as 2 club levels providing the amenities of restaurants, party rooms, a day care centre, swimming pool, gymnasium, tennis courts, squash courts, basketball court, mini market, children's play area and other convenient facilities. The price of an apartment ranges from LKR22 – 67 mn with 2-3 bed room units, duplexes with private gardens and penthouses available. Leading Construction company Sanken Construction has been employed for this high rise project. According to ANPG Director Rohan Parikh third of the units were sold by August 2012 with more than 50% of the units sold by March 2013 and he expects all units to be sold before completion.

Fact Sheet Fact Details Venture Name Iconic 110 Parliment Road Project Company Atlantis Development Pvt Ltd (Subsidiary of ANPG) Investment USD30 mn Location Rajagiriya (near Prima Ceylon Head office) Land Size 1.5 Acres Contractor Sanken Construction Pvt Ltd Details of the Project 380,000 Sq Ft Complex 188 Apartments 2 Club Levels (Inclusive of restaurants, Party rooms, a day care centre, swimming pool, gymnasium, tennis courts, squash courts, basketball court, mini market, children's play area) Apartment Range 2 - 3 Bedroom units, Private Duplexes, Penthouses Selling Price LKR23 - 65 mn Average Size 1,200 – 4,200 Sqft Source http://110parliamentroad.com/home.htm

Source : TKS Research/ 8 July 2013

21 | P a g e TKS Securities (Pvt) Ltd

Colombo, A modern city in the making | July 2013 | | TKS Research

Source : maps.google.lk / TKS Research

22 | P a g e TKS Securities (Pvt) Ltd

Colombo, A modern city in the making | July 2013 | | TKS Research

APARTMENTS Altair luxury residencies

An iconic development of luxury apartments would be developed by Indian based company at a prime location in Colombo would consist of 2 towers, one straight and the other a sloping tower at an investment of USD250 mn.

Fact Sheet Fact Details Venture Name Altair Project Company Indocean Developers Pvt Ltd (a venture of Indian Company South City Projects Pvt Ltd) Investment USD250 mn Location Sir James Peiris Mawatha Colombo 2 (Facing Beira lake) Land Size 320 Perches (previously owned by Colombo Commercial Company) Architectural designer Moshe Safdie (former architect of Marina Bay Sands Resort Singapore) Contractor Sanken Construction Pvt Ltd Details of the Project 68 floors

400 units Grand Lobby with Concierge Restaurants & Spa in Retail Area 25 meter Lap Pool, Leisure Pool and Jacuzzi Pool Deck Garden Gym Jogging Track Outdoor Children’s Play Area and Games Room Steam & Sauna Room Function Room Barbeque Pavilion Sky Garden with Pool, Lounge & Party Room

Apartment Range 2 - 3 Bedroom units, Private Duplexes, Penthouses Selling Price USD 250 - 400 per Sq Ft Average Size 1450 - 3422 Sq Ft Timeline Due to be completed in 1Q2017 Source http://www.altair.lk/index.html, http://expatkey.com/index.php?id=143#.Ud_SHzunqC0

23 | P a g e TKS Securities (Pvt) Ltd

Colombo, A modern city in the making | July 2013 | | TKS Research

Source : maps.google.lk / TKS Research

24 | P a g e TKS Securities (Pvt) Ltd

Colombo, A modern city in the making | July 2013 | | TKS Research

APARTMENTS On320 Apartments

A residential development due to be completed in December 2014 by John Keells Holdings property arm would see a development of 475 apartment units at Union Place, Colombo 2.

Fact Sheet Fact Details Venture Name On320 Project Company John Keells Holdings Investment USD65 mn Location T.B.Jayah Mw, Union Place, Colombo 2 Land Size 80 Perches Contractor Sanken Construction Pvt Ltd Details of the Project 37 Floors 475 Units extensively landscaped garden Business centre Walking track State-of-the-art gym Steam room Squash court Indoor games room Club house 3 swimming pools Selling Price USD 195 per Sqft Average Size 907 - 1312 Sqft Commence Date 2011 Completion Date December 2014 Source http://www.onthree20.com/

Source : TKS Research/ 08 July 2013

Source : maps.google.lk / TKS Research

25 | P a g e TKS Securities (Pvt) Ltd

Colombo, A modern city in the making | July 2013 | | TKS Research

APARTMENTS The Destiny Mall & Residency

The Destiny Mall & Residency developed by Imperial Builders commenced construction in the first week of May on the 140 Perch property at the corner of Sir Justice Akbar Mawatha & R.A. De Mel Mawatha, Colombo 02. The development is set to transform the area between the Slave Island railway Station and R.A. De Mel Mawatha with its ultra modern luxury G+44 storey twin tower design which consists of a shopping promenade and apartment complex. Construction commenced at a time where 44% of apartments were sold in a space of 5 months, Imperial Builders estimates to be sold out by end of 2013.

Fact Sheet Fact Details Venture Name The Destiny Mall & Residency Project Company Imperial Builders (Pvt) Ltd Investment USD120.0 mn Location Corner of Sir Justice Akbar Mw and R.A. De Mel Mw Land Size 140.0 Perches Land ownership 99 lease from UDA Architectural designer ACS Integrated headed by Chartered Architect Mr. Nandike Samaranayake Pilling Company Walkers Pilling Details of the Project 44 Storey Twin tower complex with 258 Apartments and 2 storey luxury Shopping Promenade Features The shopping mall consists of retail space, a supermarket, two 3D cinemas, bowling alleys, food courts; kiddies play area, 7 guest rooms and much more, making it very attractive to the rental investment market. the apartment amenities include an infinity pool and deck on the 6th level, a business centre, his and her gymnasium and a 200 capacity banquet hall and ample visitor parking Selling Price LKR15.0 mn to LKR75.0 mn Average Size 600 sqft to 2,300 sqft Source http://www.thedestiny.lk/

Source : thedestiny.lk

Source : maps.google.lk / TKS Research

26 | P a g e TKS Securities (Pvt) Ltd

Colombo, A modern city in the making | July 2013 | | TKS Research

HOTELS MOVENPICK Colombo

This hotel will be one of the very first city hotels opening post war in the business center in Sri Lanka’s capital. Managed by the Swiss based international hotel chain MOVENPICK, the hotel will be a 24-storey 224-room 5-star, with a complete suite of amenities catering to business travellers. The hotel will feature world-class conference and meeting facilities, four restaurants serving diverse cuisines, and a full range of recreational facilities, such as a fully-equipped gymnasium, a swimming pool, and a health spa.

Fact Sheet Fact Details Venture Name Movenpick Colombo Project Company Softlogic Holdings Investment USD 46.6 mn Location Colpetty (between Liberty Plaza and LB Finance Building) Land Size 91 Perches Details of the Project 24 story 5 Star Complex 224 Rooms Conference and meeting facilities, four restaurants serving diverse cuisines, and a full range of recreational facilities, such as a fully- equipped gymnasium, a swimming pool, and a health spa Source http://www.colombopage.com/archive_12B/Dec17_1355730941CH.php

Source: TKS Research/ 08 July 2013

Source : maps.google.lk / TKS Research

27 | P a g e TKS Securities (Pvt) Ltd

Colombo, A modern city in the making | July 2013 | | TKS Research

HOTELS Shangri-La Hotel, Colombo

The top international hotel chain is due to open up two hotels in Sri Lanka, one at the Galle Face promenade and in the southern Hambantota area. The development in Colombo has begun with piling ongoing where a 500 roomed hotel would be constructed on a 10 acre land plot.

Fact Sheet Fact Details Venture Name Shangri-La Colombo Project Company Shangri-La international Hotels Investment USD400 mn Location Galle Face Green, Colombo Fort (adjoining the current Taj Samudra Hotel) Land Size 10 acres Land ownership 99 year old lease Land Transfer Price USD125 mn No. of rooms Apprx.500 Room Sizes 484 - 646 Sqft per room & 968 – 2,421 Sqft per suite Details of the Project Sushi bar, steakhouse, seafood market and Irish pub Specialty restaurants such as Indian, Islamic, Szechuan and Macanese Sky lounge Meeting facilities spread over 3 floors (48,438 Sqft) Swimming pool and tennis courts Commencement 2013 Expected Completion Date 2016-17 Source http://www.shangri-la.com/corporate/press-room/press releases/shangri- las-hambantota-resort-spa-sri-lanka-to-open-in-2014/ Source : TKS Research/ 08 July 2013

Source : maps.google.lk / TKS Research

28 | P a g e TKS Securities (Pvt) Ltd

Colombo, A modern city in the making | July 2013 | | TKS Research

HOTELS Sheraton Colombo

Sheraton Colombo is a hotel complex with an investment of approximately USD80 mn made by Lanka Hotel Residencies

Pvt Ltd and its Promoters Greenwater Resorts Pvt Ltd India and Eurocon Building Industries FZC UAE upon the signing of an agreement between LHR and Starwood Hotels & Resorts World Wide INC the owners of the Sheraton Brand. Situated in the Central Business District located down Galle Road Colombo 3 next to the popular Carnival Ice Cream Parlour this Hotel Complex would house 306 rooms inclusive of a Presidential suite and other luxury themed suites along with 3 restaurants an outdoor swimming pool and Spa. The land was required by LHR after their understanding with the Starwood Group on a 99 year lease. The Complex is set to open on the 1st of September 2013.

Fact Sheet

Fact Details Venture Name Sheraton Colombo Investors Lanka Hotels and Residencies Pvt Ltd Greenwater Resorts Pvt Ltd India Eurocon Building Industries FZC UAE Investment USD 80 mn Location Galle Road, Colombo 3 Land Size Apprx.100 perches No. of rooms 306 Details of the Project 21 Stories 306 Rooms (Presidential Suite and other themed Suites) 3 Restaurants Source http://www.sundaytimes.lk/120513/BusinessTimes/bt02.html

Source : TKS Research/ 08 July 2013

Source : maps.google.lk / TKS Research

29 | P a g e TKS Securities (Pvt) Ltd

Colombo, A modern city in the making | July 2013 | | TKS Research

HOTELS Marino Sands Hotel

A 270 room luxury hotel and the department store is the first tourism related project of South Asia’s largest furniture manufacturer Damro. It will be constructed on a 1.5 acre land in Colombo 03 with a USD40 mn investment and mainly promoted to Indian middle class tourists through its branch network.

Fact Sheet Fact Details Venture Name Marino Sands Hotel Project Company Damro Group Investment Apprx.USD40 mn Location Colombo 03, extending from Galle road to Marine Drive Land Size 1.5 Acres Project completion year: 2016 Details of the Project 270 room 12 storey luxury hotel and a department store Features 270 room luxury hotel of 400,000 sq. ft. Department store of 100,000 sq. ft. Three basement car park 200 ft roof top infinity pool 4 restaurants Source: http://www.ft.lk/2013/06/06/post-war-rebound-lures-damro-to-diversify- into-tourism-sector/

Source : maps.google.lk / TKS Research

30 | P a g e TKS Securities (Pvt) Ltd

Colombo, A modern city in the making | July 2013 | | TKS Research

HOTELS ITC Hotel Colombo

India -based public conglomerate, ITC Ltd will soon begin the construction of a mixed development project on a 5 acre plot of Galle Face beachfront adjoining Shangri- La project. The proposed mixed development includes a luxury hotel, residencies and a shopping mall at an estimated investment of USD140 mn. However the further details of the project are yet to be published.

Fact Sheet Fact Details Venture Name Welcome Hotels Lanka (Pvt) Ltd Project Company ITC Limited, Kolkata Investment Apprx.USD140 mn Location Facing Galle Face Green, on the former Army headquarters premises Land Size 05 Acres Land Cost USD147 mn Land ownership 99 year lease Project completion year: 2018 Details of the Project Luxury hotel, residencies and a shopping mall Features Not available Tax holiday 10 years from the first year of profits or three years after operations Sources: http://www.sundaytimes.lk/130707/business-times/itc-begins-mixed- development-project-near-galle-face-green-51167.html http://www.sundaytimes.lk/120129/BusinessTimes/bt04.html

Army Headquarters

GalleFace

Source : maps.google.lk / TKS Research

31 | P a g e TKS Securities (Pvt) Ltd

Colombo, A modern city in the making | July 2013 | | TKS Research

HOTELS Sancity Business Hotel

A 240 room 3 star business hotel at Colombo 3 is being built by Sanken Construction together with JKH. It will be constructed on 80 perch land in Colombo 03 with a USD23 mn investment and mainly promoted to business tourists in Colombo. JKH is to manage the hotel once completed under their brand portfolio.

Fact Sheet Fact Details Venture Name Sancity Business Hotel Project Company Sancity Hotels (Pvt) Ltd Investment Apprx.USD23 mn Location Green Path, Colombo 03 Land Size 80 perches Project completion year: 2016 Project architect Design team 3 of Singapore Features Designed as a chic boutique business hotel of 240 rooms 25 storey tower Roof top swimming pool Open air club lounge Dining restaurant of 160 pax on 24th floor Gym 5 lifts Car parking Project Holding Sanken Construction company 51%, JKH 28% Tax holiday Tax exempt for 7 years from first year of profit Source: http://www.ft.lk/2011/09/02/sanken-jkh-in-jv-for-rs-3-b-worth-25- storey-240-room-city-biz-hotel/

Source : maps.google.lk / TKS Research

32 | P a g e TKS Securities (Pvt) Ltd

Colombo, A modern city in the making | July 2013 | | TKS Research

MALLS Colombo City Centre

Abans Group (parent company of listed Abans Electricals (ABAN : LKR 128.20) and Abans Finance (AFSL : LKR31.40) in collaboration with Silver Needle Hospitality have signed an agreement to build a USD100 mn shopping mall including a luxury hotel in the land adjoining Altair luxury residencies in Colombo 2.

Fact Sheet Fact Details Venture Name Colombo City Centre Project Company Abans Group and Silverneedle Hospitality Investment USD100 mn Location TB Jayah Mw, Union Place, Colombo 2. Land Size 2 acres Architectural designer Aedas International Details of the Project 200 Room Luxury Hotel Complex Retail space Food court 3D cinema Gym Cyber café Starting Date 2014 Completion Date 2016 Source http://www.ceylontoday.lk/22-32780-news-detail-abans-to-bring- colombo-city-centre.html, http://www.lbt.lk/news/business/4442- abans-100-dollar-lifestyle-mall-opposite-beira-lake

Source : maps.google.lk / TKS Research

33 | P a g e TKS Securities (Pvt) Ltd

Colombo, A modern city in the making | July 2013 | | TKS Research

OFFICE SPACES Access Tower 2

Following the successful launch of its first tower for office space, Access Engineering (AEL : LKR20.50) plans to build its second tower in the vicinity of its current premises in a 87 perch land plot. The investment exceeding USD20 mn would include a 170,000 Sqft rentable office space where construction would commence end of 2013.

Fact Sheet Fact Details Venture Name Access Tower 2 Project Company Access Realities Two (subsidiary of Access Engineering) Investment Exceeding USD20 mn Location Adjoining current Access Tower Land Size 87 perches Land ownership Freehold basis Details of the Project 25 storeys, total gross area of 280,000 Sqft and 240 parking spaces Rentable office space of 170,000 Sqft Source http://accesstowerssl.com/

Source : maps.google.lk / TKS Research

34 | P a g e TKS Securities (Pvt) Ltd

Colombo, A modern city in the making | July 2013 | | TKS Research

Disclaimer

The information contained in this report is for general information purposes only. This report and its content is copyright of TKS Securities and all rights reserved. This report- in whole or in part- may not, except with the express written permission of TKS Securities be reproduced or distributed or commercially exploited in any material form by any means whether graphic, electronic, mechanical or any means. Nor may you transmit it or store it in any other website or other form of electronic retrieval system. Any unauthorised use of this report will result in immediate proceedings.

The report has been prepared by TKS Securities (Private) Limited. The information and opinions contained herein has been compiled or arrived at based upon information obtained from sources believed to be reliable and in good faith. Such information has not been independently verified and no guaranty, representation or warranty, express or implied is made as to its accuracy, completeness or correctness, reliability or suitability. All such information and opinions are subject to change without notice. This document is for information purposes only, descriptions of any company or companies or their securities mentioned herein are not intended to be complete and this document is not, and should not be construed as, an offer, or solicitation of an offer, to buy or sell any securities or other financial instruments. In no event will TKS Securities be liable for any loss or damage including without limitation, indirect or consequential loss or damage, or any loss or damage whatsoever arising out of, or in connection with the use of this report and any reliance you place on such information is therefore strictly at your own risk.

TKS Securities may, to the extent permissible by applicable law or regulation, use the above material, conclusions, research or analysis in which they are based before the material is disseminated to their customers. Not all customers will receive the material at the same time. TKS Securities, their respective directors, officers, representatives, employees, related persons and/or TKS Securities, may have a long or short position in any of the securities or other financial instruments mentioned or issuers described herein at any time and may make a purchase and/or sale, or offer to make a purchase and/or sale of any such securities or other financial instruments from time to time in the open market or otherwise, in each case either as principal or agent. TKS Securities may make markets in securities or other financial instruments described in this publication, in securities of issuers described herein or in securities underlying or related to such securities. TKS Securities may have ently underwritten the securities of an issuer mentioned herein.

Equity Research

Danushka Samarasinghe, Director [email protected] +94-77-3020231

Asanka Ranasinghe, Senior Investment Analyst [email protected] +94 77-1078497 Sashreeka Abeysinghe, Investment Analyst [email protected] +94 77-3691067 Chamithri Ratnapala, Investment Analyst [email protected] +94 77-3723506 Tharushi Perera, Investment Analyst [email protected] +94 77-3482321 Sanka Pieris, Associate Investment Analyst [email protected] +94 77-3687324 Nishanthi Hettiarachchi, Senior Research Executive [email protected] +94 77-1078499 Equity Sales Hussain Gani, CEO/ Director [email protected] +94-777992086 Ralph Wijesinghe, Director [email protected] +94-773727353 Prasanna Chandrasekara, Director [email protected] +94-77 2374585 Anna Bharathi, Senior Investment Advisor [email protected] +94-773658093 Thushara Pathiraja, Investment Advisor [email protected] +94-773038278 Nuwan Mangala, Investment Advisor [email protected] +94-773454407 Shehana Hussain, Investment Advisor [email protected] +94-777569250

Branches Embilipitiya +94-477857799 Gampaha +94-337857799 Kandy +94-817857799 Ratnapura +94-457200005 Townhall +94-117957799 Matara +94-417857799

35 | P a g e TKS Securities (Pvt) Ltd