Despite notable recovery during 1Q21, economic activity during 2Q21 softened with resurging COVID-19 cases followed by a series of island-wide travel restrictions. A grade office spaces witnessed heightened demand largely driven by the IT/ITeS occupiers in the market. Vacancy rates increased q-o-q and expected to swell further due to the anticipated additions in the market. Positive sentiment was observed in residential market demand amidst uncertain economic conditions posed with resurgence of the COVID-19 cases. Prime grade A malls witnessed gradual improvements in leasing activity during the early weeks of the quarter, however demand gradually declined with the imposition of island-wide travel restrictions. Colombo hotels largely survived with MICE, events and business related travel, anyhow continued to struggle with sunken tourist demand.
Key Highlights
Overall economic activity softened with surging COVID-19 cases followed by island-wide travel restrictions.
Super luxury segment in the residential market witnessed notable traction.
Retail sales hit as Covid-19 wave intensified.
Colombo hotels largely survived with MICE, events, and business-related travel.
