RIL Property comes up with a second complex
View(s):RIL Property Ltd (RIL) which began trading on the Colombo Stock Exchange (CSE) recently says that Grade ‘A’ commercial office space in select core markets in Colombo is quite scarce.
“There’s 500,000 square feet (sq) required at present for Grade A properties,” RIL CEO Hiroshini Fernando told media at the opening of RIL trading. This demand is after accounting for upcoming Grade A properties, such as Colombo City Centre, Shangri-La, etc, she said.
She told the Business Times that RIL will put up another project similar to their PARKLAND office complex at Union Place ( opposite to it) at the vacant near-one-acre plot. About high rental yields, Ms. Fernando said that they expect rentals of PARKLAND to spike by at least 20 per cent at the time of renewal. Ms. Fernando said that RIL rented out this building’s units at a slightly low rate but will be reviewing them.
PARKLAND is a high end building with sophisticated property management features which has attracted customers – mostly foreign companies and blue-chip local corporate who could afford A Grade office space for a premium rate.
Current rental rates of PARKLAND are at a nearly 13 per cent discount to equivalent A-Grade office properties. Further 60 per cent tenants are foreign companies with their earnings are largely based on US dollar. While saying that a property bubble will concern the residential condos and office complexes below Grade A, Ms. Fernando told the Business Times that PARKLAND units were rented mostly by existing firms barring only two or three new firms. “This goes to show that they weren’t as happy with the places that they rented earlier. So the demand for Grade A units are there.”
While most of the Rs. 960 million that RIL raised through their recent initial public offering (IPO) will go towards refurbishing RIL-owned Readywear building, they’ll utilise the rest for expanding their BreadTalk outlets, Ms. Fernando said.
She said that BreadTalk’s holding company Foodbuzz will expand its reach through these outlets within the Western Province. When queried about consumer spend dampening owing to the rising inflation, Ms. Fernando said that as BreadTalk has many different products it caters to many suburban areas which will fetch them consumers across the board.
The group posted a net profit of Rs. 930.36 million, an 81 per cent YoY deterioration, for the 4th quarter ended March 31, 2017. Rill’s revenue for the year increased 270 per cent YoY to Rs. 1 billion.
CSE Chairman Vajira Kulatilaka speaking at the event noted the importance of protecting the company’s minority shareholders, and urged the leadership of RIL to consider the best interests of the investors that have placed a trust in the company. Speaking on behalf of RIL, Chairman Sunil Wijesinha expressed the company’s appreciation to the CSE, the managers of the listing, investors and all other parties involved for assisting RIL through the process. Mr. Wijesinha went on to state that the company will endeavour to work for the benefit of its shareholders through transparency and governance driven procedures and expressed the commitment of the company’s leadership towards achieving further growth in future.