The Construction & Real Estate sector at present

The construction industry has always been a key player and contributor to the GDP of the nation with nearly 7.1/% in growth. Over a million workers are employed in the construction sector at present. The skies haven’t always been rosy. Dealing with the many hurdles that the war in Ukraine & subsequent fuel, energy and material crisis has thrown at the global economy, the construction and real estate sector too has undergone stifling challenges that have caused many smaller players to drop out of the game. Many others have developed a high risk“hit and run” approach with their projects due to the scarcity of resources which poses a significant threat to the safety and the well being of their customers and the public in general. But a handful of established players in the market have managed to hold down the fort during the most tumultuous years, understanding what less seasoned players do not – that quality and safety are not things that one can compromise, even at troubled times.
Within the past few months, some building material suppliers had to close down owing to non availability of items like cement, iron and other essential items. Raw material costs increased significantly due to surging prices in the global market, along with increasing freight rates due to rising oil & gas prices, and high interest for longer credit periods. Significant cost inflation affecting demand and profitability, import restrictions disrupting operations, and high-interest rates are key risks faced by domestic corporate in the next 12-18 months. Due to these continuous issues, manufacturers and traders increased the prices of products, including those of building materials throughout the quarter, resulting in a slowdown of ongoing construction projects thereby effectively postponing the commencement of new projects until price stability could be established in the market.
This development has negatively affected the jobs of those who are directly and indirectly dependent on the construction sector. The construction-related businesses confirm that the unemployment figures in the industry, more or less, remain the same as it was during the peak of the economic crisis, despite trivial improvements in the economic front.
The local construction industry commends any effort by the Government to revive the Sri Lankan economy and also realizes that fiscal and monetary policy measures would certainly bring in desired results in the long-term, however, the short and medium-term pose greater challenges which question the ability of the construction companies to survive and withstand the repercussions of such reforms introduced by the government. Hence, careful and special consideration toward the industry direly has to be driven and customized policies have to be announced for each and every industry as not all the industries are affected by the same decree
Despite these issues the government introduced the golden visa scheme in April 2022, to attract foreign investors, where anyone who invests more than USD 100,000 is granted a 10 year residential visa which is a great approach. However the exemption granted on Value Added Tax (VAT) on residential condominiums shall be removed from the 1st of December 2022 along with the introduction of 2.5% social security tax. However with the Central Bank’s (CBSL) decision to float LKR in March 2022 and due to the increasing dollar rate, there has been a rapid increase in demand for completed and on-going condo projects in primary and secondary markets as well as for completed houses as a hedge against economic calamity. Many expats have also shown a keen interest in the Sri Lankan real estate market due to the rupee devaluation and increased dollar rates, thus making this a good time to invest before the introduction of the mentioned taxes.

The Blue Ocean Group – Continuing to stand strong

The Blue Ocean Group has cemented itself as one of the leading developers in the real estate & construction industry. Under the strategic leadership of its chairman Mr. Sivarajah Thumilan, the Group had already foreseen the various challenges that were to come and had set a clear strategic path to help stabilize the growth along with the support of professionally qualified and experienced corporate planners.

It is due to the dexterity of its strategic leadership that the Blue Ocean Group has been able to continue its policy of offering quality apartments at reasonable prices across strategic locations to the general public and to foreign investors, with relative ease. The Group’s priority is executing their already strong order book which has been predicted to drive attractive cash generation and returns in the years to come while providing the group a strong foundation to stand on, amidst volatilities.
Even with the current crisis situation in the country and the growing heap of challenges faced by the real estate & construction industry, the Group is well geared to cater to the needs and wants of the different social groups and in the long run, support the government in its quest for self-sufficiency even amidst daunting challenges thrown at it by the local crisis and the global economy. The Group maintains its position by playing to its strengths and reshaping its strategies with utmost fluidity, including investing in markets where the government is committed to long-term infrastructure programmes and choosing to exclude regions and sectors which cannot provide profitable, low-growth.
The Blue Ocean Group continues to work on its existing high-rise projects in Colombo, Mount Lavinia & Nuwara Eliya and will commence work on a new state of the art high rise project in Havelock Place, Colombo 05, further establishing their place in the construction industry as real estate trailblazers.

Link Engineering – Construction Legend since 1981

Spanning over four decades, Link Engineering (Pvt) Ltd, a proud member and the construction arm of the Blue Ocean Group of Companies, is a household name in Sri Lanka and is one of the first few construction companies in the country with a distinguished portfolio of remarkable projects under its belt. The company concluded a number of prominent projects within the past year, leaving a trail of stupendous construction landmarks in its wake.
The company is currently involved in a large number of construction projects that range from local and Indian government funded constructions such as universities and infrastructure projects to urban luxury condominiums. As a member of the Blue Ocean Group, Link Engineering has already provided a sound financial plan for 2022 and 2023 with many condominium and government constructions in Jaffna, Trincomalee, Kandy, Gampaha, Colombo, Nuwara Eliya etc.

Over the last decade, government funded projects have taken a prominent role in the construction industry and Link Engineering had successfully claimed its share in this segment. The company had recently completed the Faculty of Engineering Technology and Bio System Technology building of University of Jaffna, Ariviyal Nayar, Kilinochchi and had its grand opening ceremony on the 18th of August 2022 with Hon. Ministers and other distinguished guests. This is the largest building of the university, distinguished by its excellent craftsmanship and elegant finishes that come with a number of state of the art amenities and facilities, carefully crafted at the apt hands of Link Engineering experts.

The Company also handed over the customer care centre belonging to the Ministry of Water Supply National Water Supply & Drainage Board in early January this year. It is also now ready to hand over the Pellakelle Dancing School building in Kandy, a high Impact Community Development Project (HICDP) that entails construction of a training school building, multi-purpose hall and the supply of furniture, office equipment, musical instruments, and other equipment. This project is yet another manifestation of the continued commitment of the Government of India to enhance the strong religious and cultural links that bind the people of Sri Lanka and India. Link Engineering will also be handing over the eight storied building for the Clinical Department, Faculty of Medicine of University of Jaffna. This is the tallest building in the Jaffna town and valued at approximately LKR 800 million.

The Construction & Real Estate sector at present

The construction industry has always been a key player and contributor to the GDP of the nation with nearly 7.1/% in growth. Over a million workers are employed in the construction sector at present. The skies haven’t always been rosy. Dealing with the many hurdles that the war in Ukraine & subsequent fuel, energy and material crisis has thrown at the global economy, the construction and real estate sector too has undergone stifling challenges that have caused many smaller players to drop out of the game. Many others have developed a high risk“hit and run” approach with their projects due to the scarcity of resources which poses a significant threat to the safety and the well being of their customers and the public in general. But a handful of established players in the market have managed to hold down the fort during the most tumultuous years, understanding what less seasoned players do not – that quality and safety are not things that one can compromise, even at troubled times.
Within the past few months, some building material suppliers had to close down owing to non availability of items like cement, iron and other essential items. Raw material costs increased significantly due to surging prices in the global market, along with increasing freight rates due to rising oil & gas prices, and high interest for longer credit periods. Significant cost inflation affecting demand and profitability, import restrictions disrupting operations, and high-interest rates are key risks faced by domestic corporate in the next 12-18 months. Due to these continuous issues, manufacturers and traders increased the prices of products, including those of building materials throughout the quarter, resulting in a slowdown of ongoing construction projects thereby effectively postponing the commencement of new projects until price stability could be established in the market.
This development has negatively affected the jobs of those who are directly and indirectly dependent on the construction sector. The construction-related businesses confirm that the unemployment figures in the industry, more or less, remain the same as it was during the peak of the economic crisis, despite trivial improvements in the economic front.
The local construction industry commends any effort by the Government to revive the Sri Lankan economy and also realizes that fiscal and monetary policy measures would certainly bring in desired results in the long-term, however, the short and medium-term pose greater challenges which question the ability of the construction companies to survive and withstand the repercussions of such reforms introduced by the government. Hence, careful and special consideration toward the industry direly has to be driven and customized policies have to be announced for each and every industry as not all the industries are affected by the same decree
Despite these issues the government introduced the golden visa scheme in April 2022, to attract foreign investors, where anyone who invests more than USD 100,000 is granted a 10 year residential visa which is a great approach. However the exemption granted on Value Added Tax (VAT) on residential condominiums shall be removed from the 1st of December 2022 along with the introduction of 2.5% social security tax. However with the Central Bank’s (CBSL) decision to float LKR in March 2022 and due to the increasing dollar rate, there has been a rapid increase in demand for completed and on-going condo projects in primary and secondary markets as well as for completed houses as a hedge against economic calamity. Many expats have also shown a keen interest in the Sri Lankan real estate market due to the rupee devaluation and increased dollar rates, thus making this a good time to invest before the introduction of the mentioned taxes.

The Blue Ocean Group – Continuing to stand strong

The Blue Ocean Group has cemented itself as one of the leading developers in the real estate & construction industry. Under the strategic leadership of its chairman Mr. Sivarajah Thumilan, the Group had already foreseen the various challenges that were to come and had set a clear strategic path to help stabilize the growth along with the support of professionally qualified and experienced corporate planners.

It is due to the dexterity of its strategic leadership that the Blue Ocean Group has been able to continue its policy of offering quality apartments at reasonable prices across strategic locations to the general public and to foreign investors, with relative ease. The Group’s priority is executing their already strong order book which has been predicted to drive attractive cash generation and returns in the years to come while providing the group a strong foundation to stand on, amidst volatilities.
Even with the current crisis situation in the country and the growing heap of challenges faced by the real estate & construction industry, the Group is well geared to cater to the needs and wants of the different social groups and in the long run, support the government in its quest for self-sufficiency even amidst daunting challenges thrown at it by the local crisis and the global economy. The Group maintains its position by playing to its strengths and reshaping its strategies with utmost fluidity, including investing in markets where the government is committed to long-term infrastructure programmes and choosing to exclude regions and sectors which cannot provide profitable, low-growth.
The Blue Ocean Group continues to work on its existing high-rise projects in Colombo, Mount Lavinia & Nuwara Eliya and will commence work on a new state of the art high rise project in Havelock Place, Colombo 05, further establishing their place in the construction industry as real estate trailblazers.

Link Engineering – Construction Legend since 1981

Spanning over four decades, Link Engineering (Pvt) Ltd, a proud member and the construction arm of the Blue Ocean Group of Companies, is a household name in Sri Lanka and is one of the first few construction companies in the country with a distinguished portfolio of remarkable projects under its belt. The company concluded a number of prominent projects within the past year, leaving a trail of stupendous construction landmarks in its wake.
The company is currently involved in a large number of construction projects that range from local and Indian government funded constructions such as universities and infrastructure projects to urban luxury condominiums. As a member of the Blue Ocean Group, Link Engineering has already provided a sound financial plan for 2022 and 2023 with many condominium and government constructions in Jaffna, Trincomalee, Kandy, Gampaha, Colombo, Nuwara Eliya etc.

Over the last decade, government funded projects have taken a prominent role in the construction industry and Link Engineering had successfully claimed its share in this segment. The company had recently completed the Faculty of Engineering Technology and Bio System Technology building of University of Jaffna, Ariviyal Nayar, Kilinochchi and had its grand opening ceremony on the 18th of August 2022 with Hon. Ministers and other distinguished guests. This is the largest building of the university, distinguished by its excellent craftsmanship and elegant finishes that come with a number of state of the art amenities and facilities, carefully crafted at the apt hands of Link Engineering experts.

The Company also handed over the customer care centre belonging to the Ministry of Water Supply National Water Supply & Drainage Board in early January this year. It is also now ready to hand over the Pellakelle Dancing School building in Kandy, a high Impact Community Development Project (HICDP) that entails construction of a training school building, multi-purpose hall and the supply of furniture, office equipment, musical instruments, and other equipment. This project is yet another manifestation of the continued commitment of the Government of India to enhance the strong religious and cultural links that bind the people of Sri Lanka and India. Link Engineering will also be handing over the eight storied building for the Clinical Department, Faculty of Medicine of University of Jaffna. This is the tallest building in the Jaffna town and valued at approximately LKR 800 million.

Striving through Challenges

The Group’s dedication to build through loyalty, trust and steadfastness helps them stand tall despite the uncertainty of the recent times. The Group stands in stark contrast to unscrupulous builders with their lackadaisical approach to projects, affected by the lack of qualifications, competent staff, sufficient experience, finances, or access to good quality building materials brought which in turn results in higher cost and time over-runs, culminating with customer disappointment.
Implementing and using environment friendly material and constant market monitoring for the most cost effective solutions to meet and exceed customer expectations, the Group dedicates its resources to ensure high quality of product and service delivery through constant monitoring in order to deliver a high quality, consistent customer experience.

Striving through Challenges

The Group’s dedication to build through loyalty, trust and steadfastness helps them stand tall despite the uncertainty of the recent times. The Group stands in stark contrast to unscrupulous builders with their lackadaisical approach to projects, affected by the lack of qualifications, competent staff, sufficient experience, finances, or access to good quality building materials brought which in turn results in higher cost and time over-runs, culminating with customer disappointment.
Implementing and using environment friendly material and constant market monitoring for the most cost effective solutions to meet and exceed customer expectations, the Group dedicates its resources to ensure high quality of product and service delivery through constant monitoring in order to deliver a high quality, consistent customer experience.