Colombo property values are messed up. People knee-jerk complain about the government taking over land but, honestly, they should take over more land and re-privatize it so that the landscape can begin to rationalize itself. Just look around. Property in the city center is under-developed, under-priced, and people can neither invest in it or sell. Something’s gotta give.
Let us presume you’ve never been to Colombo and look at the map above. Where would the city center be? Why around the port of course, Colombo 1, 11, 12, 13, and that lovely point where the river meets the sea, Colombo 15. Then Colombo 2, 3 and 4. For reference, let’s look at a map of San Francisco, where you can see that land near the port predictably has higher value.
Colombo Port Side
In Colombo, however, it’s nearly the opposite. Colombo 1 has a few office buildings, and empty Cargills and street after street of abandoned or basically abandoned shops. This is because Colombo was a terrorist warzone and everybody fled, but it still looks weird. Colombo 2 is Pettah, an interesting place, but where the main traffic seems to be in dried fish, red onions and people carrying the stuff on their backs. You can find anything in Pettah, but you also can’t find anything. Gentrified would not be the word. Colombo 13 and 15 are basically slum, at best low income. The roads narrow and almost cease functioning and Mattakuliya is a dead end. If you say Mattakuliya people laugh, it’s almost synonymous with the boonies, despite have at least one beach as good as Mount, tons of river front land and being technically close to the technical city center.
I won’t go into it too much, but there are very few property listings for these areas, and they’re often on the order of two or three perches, or about 750-1000 square feet. These sell for about Rs. 4 to 7 million, or less than $75,000. It is too high for low income people, too small for developers, and basically doesn’t sell. Two perch houses are incredibly inefficient for a city center, but unless everyone sells, there isn’t enough space to build.
Colombo 2, 3 and on are essentially suburbs, or they were in colonial days. Now Colombo 7 is essentially the center of middle class town, though in the past it was literally its name, Cinnamon Gardens. Even in Colombo 2, Colpetty, however, as you get nearer the city center it gets more rather than less slummy. Quite strange.
In fact, the highest value areas (in terms of housing) are way further out, Battaramulla, Nugegoda, and especially Nawala. Of the high income people I know or know off, no one lives in the city, with the exception of Galle Face Court.
UDA Plan for 2010. Red is concentrated development and dark blue is commercial. Yellow to brown is residential.
Pink and purple are sea front and port while white and lighter blue are planned projects. Via an article I did in The Sunday Leader
In time this has to change, and will change, but the current impasse is where you have a lot of small holdings in the center that can’t be developed, and the spectre of government take over looming and making investment unstable. Now, the reaction of so-called progressives these days (to everything) seems to be government bad, keep stuff the same. Which isn’t a solution. Personally, I think the government should step in and just buy out stuff now, and do it quickly, so that sane property rights and can come back.
Right now you can get property on the Beira Lake (non stinky side) for like Rs. 5 million, which would theoretically be worth much more in 10 years. Unless the government nationalizes it in five and buys it for much less. Personally, I think they should just take over and re-privatize stuff now, and/or allow these lands to be sold at market rate, enabling people to cash out quite handsomely, and developers to make out as well.
Where we are now, however, property rights in Colombo are rather dubious, and buying land is a bit of a gamble.