Discussions underway to attract Ritz Carlton hotel group to the project

By Bandula Sirimanna

At least 30 Sri Lankans, overlooking land and project viability issues, have offered to purchase super luxury apartments at an astronomically high price of Rs. 93 million per unit at the ‘Krrish Square’ mega multi-complex real estate project at Transworks House building in Fort.

The project covers an area of 4.3 acres, informed sources said Construction work of four towers of residential, retail and offices and a seven star ultra luxury boutique hotel at the site has been delayed due to a land dispute and the delay in making the full up-front payment for the lease, these sources revealed.

However the Indian company is carrying out its marketing campaign through worldwide web advertisements although there was no approval given for the building plan due to a land issue, a senior government official said adding that he believed the action taken by the Krrish group to sell apartments (beforehand), without sorting out these issues, was illegal.

However denying reports that the Indian investor is going to abandon the project due to local bottlenecks, Investment Promotion Minister Lakshman Yapa Abeywardena noted that the project will go ahead as planned by Krrish which has tied up with a US strategic partner.

There was a land issue earlier, as two acres belonged to Urban Development authority and the other two acres were owned by the Land Commissioner, he said.

This land dispute has been settled following the submission of a cabinet paper by the ministry, he added.

He revealed that the company has paid around 40 per cent (Rs 2 billion) of the total upfront payment under the lease agreement and has agreed to pay the balance 60 per cent this month.

The four high rise towers will be built as a vertical city. One of the residential sky towers will have 80 floors and other two would be 55 floors.

The fourth tower will have 85 floors and will house the seven-star hotel and commercial office spaces.

The test piling for buildings has already started and the construction would commence next month after settling the full lease payment, a top official of Krrish Transworks Colombo (Pvt) Ltd, the Sri Lankan arm of the Indian group, told the Business Times
The handover of the lease, estimated to cost Rs. 5 billion is still being processed by the UDA under MOUs signed between the parties but Krrish officials said the advance payment confirms its commitment to go ahead with the prestigious project They said a marketing office has been set up to sell apartments adding that they are now negotiating with global chain Ritz Carlton for its strategic partner for the proposed seven star hotel.

He disclosed that several well known Fortune 500 companies like Samsung, Nokia, Mitsubishi and others have expressed interest in the commercial space and the apartments. Krrish started its operations in 1983 with the setting up of Frost Falcon Distilleries. The group has since then spread its wings to other sectors like breweries, distilleries, hospitality, real estate, and infrastructure.

Ban on foreigners buying private land affects condominium market Sri Lanka’s condominium market will be severely affected by a recent government decision to ban private land sales to foreigners including Sri Lankan expatriates with foreign citizenship, industry sources said. The cabinet recently decided to prohibit foreigners from purchasing private land due to ever increasing demand for land with the government’s development activities. Earlier foreigners were permitted to buy private land by paying a 100 per cent land tax. They are allowed to purchase condominiums up to the fourth floor by paying 100 per cent land tax. There was no land tax payable when purchasing apartments above the fourth floor. A senior government official who wished to be anonymous told the Business Times that the new directive will affect foreign investments as it gives a wrong signal to foreigners. Others said the condominium market in the country will collapse as a result of this short sighted directive. The official noted that there was a legal loophole in the proposed amendments where foreigners who form a company here with local stake holders can buy property under the company name. There were no restrictions imposed on such transactions, he added. The cabinet paper submitted under the signatures of Ministers W.D.J Seneviratne and Janaka Bandara Tennakoon noted that it is appropriate to re-consider the local land transactions as the country’s per capita land ownership has dropped to 0.2 hectares at present. However, long-term leases of land will still be allowed, and the law will not apply to diplomatic missions.

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