Business
SEC introduces framework for Real Estate Investment Trusts
From left to right Rajeeva Bandaranaike CEO CSE, Dr. Harshana Suriyapperuma, Director Corporate Affairs SEC, Chinthaka Mendis DG SEC, Viraj Dayaratne chairman SEC, Dumith Fernando, chairman CSE and Ms. Ayanthi Abeywickrema, Director-Legal and Enforcement SEC
In Sri Lanka, owing to spiraling property prices it is a challenge for average citizens to finance real estate investments. Therefore, a significant proportion of the population of Sri Lanka is unable to benefit from the value appreciation of property and infrastructure development.
The issue can be resolved by introducing a mechanism where capital is pooled by people who are willing to invest in prime commercial and residential property and they will benefit from property related income and value appreciation in the long term. Such pooled funds could be used to acquire prime residential and commercial property and income and wealth derived from such property is then shared with the unit holders of the fund.
Real Estate Investment Trusts (REITs) have been available for some time and are developing rapidly in Asia and are popular particularly in Thailand, Malaysia and India. The Securities and Exchange Commission of Sri Lanka (SEC) along with the other stakeholders have been contemplating the introduction of REITs framework in Sri Lanka for quite some time although no finality had been reached. The SEC has now facilitated the introduction of a REIT framework and the proposed initiative provides real estate developers and owners to convert fully completed properties into a REIT which will provide an avenue for the general public of Sri Lanka to make an investment and thereby benefit from any property value increases. Corporate Bonds were introduced to the capital market in Sri Lanka in 1997 and it is approximately, after 23 years that a new product by way of REITs is being introduced.
The Sri Lankan REITs structure has considered the local environment in which it is expected to operate and the SEC has brought in a regulatory framework that is best suited to our market. The rules that have been introduced by the SEC will be an extension of the current Unit Trust Code and the new rules, which came into effect from July 31 is in the form of a Gazette Notification published by the SEC. These rules which are comprehensive, will govern the setting up of and the conduct of a Sri Lankan REIT. Specific provisions have been included for the verification of title and valuation of property that will form part of the assets of the REIT.
Among the requirements is the mandatory distribution of approximately 90% of income to the unit holders, which is currently not a requirement for any of the listed entities. Further, due to the availability of the tax pass through mechanism to Unit Trusts, REITs also could benefit to be a viable business concept to Sri Lanka that will open new horizons for entrepreneurs to take the real estate industry to greater heights.
This property backed alternative platform offers unique benefits to the investing public and to the nation as a whole.
Benefits to investors include:
* High dividend – since requirement to pay at least 90% of their income as a dividend
*Relatively stable income stream due to long leases
* Investor protection ensured since regulated by SEC
* Swift entry and exit opportunities
* Opportunity for portfolio diversification
* Professional investment management at a relatively low transaction and management cost
* An effective hedge against inflation due to real estate asset backing
Benefits to the country include:
* Optimize land usage due to vertical high-rise building complexes and mixed developments
* A catalyst for foreign investment
* liquidity added to market through listing
* Improved investor confidence through increased transparency created through the disclosure requirements
* Increased tax revenue
*Facilitation of planned urbanization with controlled congestion
* Environmental benefits
* Employment creation
* Contribution to the country’s capital formation
* GDP growth
* Optimize capital allocation
Many real estate owners/developers can immediately benefit from the Unit Trust based REITs framework, which is now enabled under the capital market framework of the SEC. In order to promote transparency and to distribute ownership among people of Sri Lanka, REITs are only allowed as listed REITs on the Colombo Stock Exchange. (SEC)
The Delegation of German Industry and Commerce in Sri Lanka (AHK Sri Lanka) proudly facilitated the first-ever Sri Lankan delegation’s participation at Drupa 2024, the world’s largest trade fair for the printing industry and technology. Held after an eight-year hiatus, Drupa 2024 was a landmark event, marking significant advancements and opportunities in the global printing industry.
AHK Sri Lanka played a pivotal role in organising and supporting the delegation, which comprised 17 members from the Sri Lanka Association for Printers (SLAP), representing eight companies from the commercial, newspaper, stationery printing, and packaging industries. This pioneering effort by AHK Sri Lanka not only showcased the diverse capabilities of Sri Lanka’s printing sector but also facilitated vital bilateral discussions with key stakeholders from the German printing industry.
Business
Unveiling Ayugiri: Browns Hotels & Resorts sets the stage for a new era in luxury Ayurveda Wellness
In a captivating reimagining of luxury wellness tourism, Browns Hotels & Resorts proudly unveiled the exquisite Ayugiri Ayurveda Wellness Resort Sigiriya. This momentous occasion, celebrated amidst a vibrant and serene grand opening on the 6th of June, heralds a new chapter in the Ayurveda wellness tourism landscape in Sri Lanka. Nestled amidst 54 acres of unspoiled natural splendour, Ayugiri features 22 exclusive suites and stands out as the only luxury Ayurveda wellness resort in the country offering plunge pools in every room, rendering it truly one-of-a-kind.
The grand opening of Ayugiri Ayurveda Wellness Resort was an enchanting event, where guests were captivated by the melodies of flutists and violinists resonating through Sigiriya’s lush landscapes. As traditional drummers and dancers infused the air with vibrant energy, Browns Hotels & Resorts’ CEO, Eksath Wijeratne, Kotaro Katsuki, Acting Ambassador for the Embassy of Japan and General Manager, Buwaneka Bandara, unveiled the resort’s new logo, marking a significant moment witnessed by distinguished guests from the French Embassy, Ayurveda and wellness enthusiasts along with officials from the Sigiriya area, LOLC Holdings and Browns Group.
“Our strategic expansion into wellness tourism with Ayugiri Ayurveda Wellness Resort Sigiriya symbolises a significant milestone for Browns Hotels & Resorts. Wellness tourism has consistently outperformed the overall tourism industry for over a decade, reflecting a growing global interest in travel that goes beyond leisure to offer rejuvenation and holistic well-being. By integrating the timeless wisdom of Ayurveda with modern luxury, we aim to set a new standard in luxury wellness tourism in Sri Lanka. Whether your goal is prevention, healing, or a deeper connection to inner harmony, Ayugiri offers a sanctuary for holistic well-being” stated Eksath Wijeratne.
Ayugiri encapsulates the essence of life, inspired by the lotus flower held by the graceful queens of the infamous Sigiriya frescoes. Just as the lotus emerges from the murky depths, untainted and serene,
Ayugiri invites guests on a journey of purity and rejuvenation, harmonised with a balance of mind, body and spirit, the essence of nature, echoes of culture and the wisdom of ancient Ayurvedic healing.
HNB General Insurance, one of Sri Lanka’s leading general insurance providers, has been honored as the Best General Bancassurance Provider in Sri Lanka 2024 by the prestigious Global Banking and Finance Review – UK.
The esteemed accolade underscores HNB General Insurance’s unwavering commitment to excellence and its outstanding performance in the field of bancassurance. Through dedication and hard work, the HNB General Insurance team has continuously endeavored to deliver innovative insurance solutions, cultivate strong relationships with banking partners, and provide unparalleled service to customers nationwide. This recognition is a testament to the team’s dedication and relentless pursuit of excellence in the bancassurance business.
“We are honored to receive this prestigious award, which reflects our team’s tireless efforts and dedication to delivering value-added insurance solutions and exceptional service through our bancassurance partnerships,” said Sithumina Jayasundara, CEO of HNB General Insurance. “This recognition reaffirms our position as a trusted insurance provider in Sri Lanka and motivates us to continue striving for excellence in serving our customers and communities.”
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