Colliers confident as Sri Lanka story getting better now
Daily FT: World renowned specialists in real estate services and investment management, Colliers International Consultancy and Valuation (Singapore) Ltd., is confident of successful divestiture of Hilton Colombo owning Hotel Developers (Lanka) Ltd., which it is advising, as Sri Lanka is improving its macro situation and global profile.
“Now there is a good story to tell,” Colliers International Executive Director Hotels and Leisure Asia Govinda Singh told the Daily FT in an interview.
“There is a recovery curve, tourism is rebounding, there has been good progress in terms of debt restructuring along with the Extended Fund Facility program with the International Monetary Fund, etc. The upcoming Colombo Port City is another interesting development. Global recovery in tourism has been very strong as well.
So, we can offer a compelling story why to invest in Sri Lanka,” emphasized Singh.
The NASDAQ-listed Colliers is a leading diversified professional services and investment company. Established nearly three decades ago Colliers operates in 66 countries with 18,000 professionals. Assets under management is $ 99 billion and its annual revenue is $ 4.5 billion.
Colliers along with local partner Platinum Advisors was selected via a transparent and competitive process by the SOE Restructuring Unit (SRU) of the Finance Ministry to function as transaction advisor for the divestiture of Hotel Developers (Lanka) Ltd. Colliers is presently engaged on live assignments in Sri Lanka with Platinum Advisors.
Its mandate is to recommend the most appropriate strategies to maximize value to the Government of Sri Lanka, comprehensive sell-side due diligence; assist in valuing the entity; identify and shortlist suitable investors; effectively market the entity; draft all relevant documents necessary for the transaction such as Request for Proposals (RFP), Memorandum of Understanding (MOU), Share Purchase and Sale Agreement etc.; and assist with the transaction process and its successful conclusion.
“We are looking for a good competitive process to attract credible local and international buyers,” said Singh who recently made his first trip to Sri Lanka following the awarding of the contract by the Government.
“The visit was very positive. I was quite pleased to hear about the on-going and planned reforms. That’s sending the right message to the market, which will give foreign investors or any investor a lot of confidence in Sri Lanka,” said Singh who has 17 years of experience in real estate, with specialist knowledge in mixed-use projects and the hotels, gaming, tourism, and hospitality and leisure industries.
Hotel Developers divestiture is Colliers’ first contract in Sri Lanka whilst it has several on-going initiatives in the Maldives apart from a large portfolio in India.
“We have a strong hospitality and leisure business. We are growing our investment team as we speak, and especially around Asia. Hilton Colombo is a good opportunity. We have been talking to a few investors that interestingly had Sri Lanka on their radar,” said Singh who is one of Colliers’ dedicated specialist portfolio advisors and valuers in the region, and globally.
He also was of the view that timing of the select identified SOE transactions is good. “Hilton Colombo which is a heritage hotel, well located and an integral part of the city. We have the confidence to do a good exercise. We want credible investors who can deliver value,” said Singh, who coincidentally worked as an Operations Manager for Hilton London Euston, apart from being the Financial Controller at the luxury Landsborough Hotel in London, formerly a Rosewood and St Regis hotel, now part of the Oekter Collection, the Germany-based luxury hotel management company.
Colliers is of the view that Hilton is likely to be considered by funds who know the Southeast Asia market, existing investors in the industry, owners or operators of hotels, high net worth individuals, and those who are looking at entering the leisure sector. He cited world famous private equity funds such as Blackstone and KKR have hotels and hospitality under their portfolios as well.
Colliers has already been warming up prospective investors ahead of the formal call of Expression of Interest, which will be marketed globally.
“Countries like Sri Lanka are always going to be opportunistic,” said Singh, a member of RICS and registered valuer, is a chartered certified accountant with a postgraduate diploma in economics and a certificate in business valuations, who began his career at Price Waterhouse in audit and tax advisory.
“The good thing about Sri Lanka is the laws and the regulations are pretty clear, and it allows foreign ownership, freehold assets or long leasehold assets,” he said, noting that in several other South and Southeast Asian countries the process is a bit more cumbersome.
Singh is of the view that the MICE market especially from India is a strong point for Colombo with some of the alternative cities getting expensive. With more sports, leisure and entertainment options in the pipeline room inventory in the city will be snapped up. He also doesn’t think there is over capacity in Colombo given the city’s future potential.
The statements made by many international business experts on Sri Lanka’s economic resilience and growth. The country’s economy has shown great resilience to external and internal challenges through the years and is once again on the growth path after facing the challenges posed by the global pandemic and the economic crisis that followed it. Sri Lanka’s geographical positioning in the Indian Ocean and the many trade agreements as well as trade concessions enjoyed by the country have also helped boost Sri Lanka’s business opportunities. With Sri Lanka on the path to becoming an emerging business destination in the South Asian region and the confidence expressed global business leaders, foreign businesses/investors could confidently explore the growing business/investment opportunities in Sri Lanka.
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