Research

Colombo Property Market Monitor 3Q21

The Real Estate Quarterly Report of Colombo City

December 13, 2021

Contributors:

Shazana Zarook

Despite continuous mobility restrictions implemented during 3Q21, economic activities sustained pace with the ongoing vaccination drive and businesses continuing to adopt to the new normal. In 3Q21, Grade A office market witnessed heightened leasing activity, consequently reflecting in a decreased vacancy rate. Despite delays in anticipated completions, Grade A office rentals eased q-o-q. Residential market continued to soar amid notable price hikes, indicating signs of short-supply in the upcoming quarters. Retail market buoyed with the concessions offered by landlords. However, signals of recovery were observed across the market with the increased tourist arrivals and upcoming festive seasons. Colombo hotel market continued to face challenges with the low occupancy levels compared to the same period last year.

Key highlights

Economic activities sustained pace amid the lockdown with industrial production clocking a 3% growth y-o-y in August.

Increased occupier activity in the Grade A office market

Notable price hikes in the residential market caused by the challenges faced by the developers

Positive sentiment across the retail market

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