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Arcade Independence Square’s 10-yr lease: Another retail giant also engaged in bidding, Godahewa

26 Mar 2021

  • Reassures that legitimate tender process was followed 

  Abans PLC submitted a bid and stood as a potential tenant for the recent lease of the Arcade shopping complex, adjacent to Independence Square, Colombo, which was later conclusively issued to Odel PLC under Softlogic Holdings.  State Minister of Urban Development, Coast Conservation, Waste Disposal, and Public Sanitation Dr. Nalaka Godahewa stated this when he was providing a detailed explanation to inquiries made by Jathika Jana Balawegaya MP Anura Kumara Dissanayake in Parliament yesterday (25).  MP Dissanayake had questioned the tender process of the Arcade shopping complex lease, and raised concerns about the involvement of the Cabinet and other officials. In response, Dr. Godahewa stated that the Urban Development Authority (UDA) Board of Directors evaluated the directive to lease the management of the complex to the private sector to revive the mall from its plummeting revenue and generate more income. It was highlighted that the proposals of tender were taken up by a Cabinet-appointed Procurement Committee following the Government Procurement Process. Accordingly, newspaper advertisements in all three languages were published in three public newspapers late-October 2020.  “In this process, the Government Assessor has paid an estimated annual rent of Rs. 120 million. Although several companies advertised in newspaper advertisements and bought tender documents, only Odel PLC and Abans PLC bid within the four weeks given to investors to submit bids,” noted Dr. Godahewa. Correspondingly, the technical committee studied the proposals and selected Odel PLC for the next round, which met all the criteria for the tender. Also, this institution was reported to have also been approved by the Procurement Committee. Following the selection for the potential tenant, an agreement was reached between the two parties where Odel PLC concurred to pay Rs. 10 million monthly, and Rs. 120 million as a total tax at the time of signing the agreement. “In addition, another Rs. 240 million has been paid as a security deposit,” revealed Dr. Godahewa.  “Although it earned around Rs. 10 million per month in 2014, after the ‘Yahapalana’ Government came to power after 2015, the monthly income had come down to less than Rs. 8.9 million by the end of the year,” added Dr. Godahewa.  The State Minister ended his response by advising “intelligent” people to reject the false statements made by MP Dissanayake targeting personal names under the guise of parliamentary privileges.  Moreover, the State Minister also listed the members in the relevant committees that were involved in the process of the bid. Odel, a Sri Lankan retail company began operations as a single company focusing on the retail garment trade. However, Odel developed over the years under the purview of Otara Gunewardene to establish its brand in the country.  In September 2014, Gunewardene sold the majority of her shareholdings in Odel PLC to the Softlogic Group for Rs. 2.7 billion, after which Softlogic increased its shareholding and as of 30 June 2016, Softlogic held a 96.67% stake in the company.  Softlogic Holdings PLC is a diversified conglomerate in Sri Lanka engaging in multiple industries such as ICT, Healthcare, Retail, Financial Services, Automobiles, and Leisure. According to 2019 financial reports, the conglomerate receives a net income of Rs 2.172 billion along with a revenue of Rs 13.123 billion.


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