Life in Colombo witnessed almost pre pandemic normalcy during 3Q20. Vacancy rate for grade A office spaces were on the rise however rents remained unchanged. Demand for residential apartments was driven locally with the introduction of new housing loans in comparison to the same period over the last year where demand was propelled by Sri Lankan expatriates and local residents alike. Tenants from prime retail malls were provided discounted rent rates as lower foot fall negatively impacted sales yield during the year. Hotels & tourism remains the most impacted sector due to an ongoing ban of inbound travelers.
Key highlights:
Rents stabilized as leasing for office spaces gradually gaining pace
Demand for residential apartments shows signs of recovery but rentals contract nearly 35%
Retailers struggle with stagnated cash flows
Weak performance from the hotel sector to continue as borders remain closed
