News
UDA setting up land banks for investors; six properties identified
Six plots of foreclosed lands in Sri Jayewardenepura Kotte, Moratuwa and Ratmalana have been gazetted by the Presidential Secretariat for takeover under the Urban Development Projects (Special Provisions) Act as part of a wider push to build a “land bank” for the Urban Development Authority to offer up to investors.
These properties are part of a large parcel of foreclosed lands that are expected to be gazetted in future, UDA Chairman Harshan de Silva said. Cabinet approval has already been granted. The Presidential Secretariat specifies that the designated lands are “urgently required for the purpose of mixed development”.
The UDA has recently been gathering up lands to build up a portfolio that it can offer up for development. Earlier this month, the Cabinet also separately granted approval for the UDA to acquire 39 plots of State-owned and five plots of private properties under the Land Acquisition Act.
However, the Presidential Secretariat’s latest gazette, issued on Tuesday, is yet another measure being taken to build up this land bank. It pertains to foreclosed lands—properties taken over by lenders, in this case State banks, when the owners default. The financial institutions are compensated for the properties.
“When certain companies go bankrupt, their lands go to the bank,” Mr de Silva said. “Usually, they are auctioned but when this happens, you don’t know the end-user. They could go into wrong hands or nothing turns up on that land.”
The UDA recently issued a 25bn-rupee debenture valid for five years to obtain initial capital to build middle-income housing. It is to be settled using proceeds from the sale of houses constructed under this scheme. The buyers are to receive concessionary housing loans from State banks to be paid back in 25-30 years.
“As we are short of lands for this project, as well, we spoke to all the banks and told those who have foreclosed properties to kindly give us a list,” said Mr de Silva. Some of these are being taken over under a Presidential proclamation to serve a purpose.
“If the banks auction them, only the land value is earned,” he continued. “We do value addition, such as a master plan, and call requests for proposals either for public-private partnerships, where viable and profitable, or, say in the case of proposed multi-story car park, a build-operate-and-transfer.” A few will be leased out to generate income for the Authority.
The UDA is in the midst of a massive development push, with plans to transform, for instance, Kirimandala Mawatha, into an area with boulevards, common sports amenities, more hospitals and relocated private schools now clogging up other streets with traffic. There are several lands along that street, many of them State-owned, earmarked for takeover, including the Milco property.
The UDA will also acquire lands on which “shanties” reside and set up more apartments to accommodate their residents, Mr de Silva said. This is low-income housing. High-income dwellings have largely been taken care of by the private sector.
But the UDA is also now going into lower-middle, middle and upper-middle income housing targeted, for example, at professionals or public officials, etc. There will also rent houses for those who wish to live and work in Colombo. “We are diversifying the whole thing,” the Chairman explained.
The UDA will also collaborate with the Board of Investment to offer up properties to prospective investors so they need not “go in circles”. “We share this with the BOI and whoever comes to the BOI can be directed to us,” he said. “We don’t simply offer the land but give the potential.”