Business

Prime Lands profits over Rs. 700 m amidst pandemic

Prime Lands Group, which is set to make its stock market debut, has reportedly recorded a profit of Rs. 739.65 million for the 10 months ended 31 January 2021. 

Real estate giant Prime Land Residences (PLR) held a virtual investor forum yesterday (28) for the Initial Public Offering (IPO) at which the prospectus and the financial performance of the last 10 months, as of March 2021, was revealed.

Revenue for the period was Rs. 6.2 billion, while the operating profit was Rs. 1.25 billion.

“The IPO we are proposing is to issue 100,000,000 ordinary shares with the option to issue further 87,500,000 upon the oversubscription of the first 100,000,000 shares,” Acuity Partners Corporate Finance Vice President Amani Ranaweera stated, explaining the offer at a glance.

She further stated that the share issue price is Rs. 10.40 per share. It was further stated that the IPO is expected to raise Rs. 1.04 billion at the minimum, which can increase to a predicted maximum fund of Rs. 1.95 billion. 

The Expected IPO execution time frame is also set to 11 May 2021 with Acuity Partners (Pvt.) Ltd. being the managers to the issue. 

Ranaweera went on to mention that the residential real estate industries noted a steady increase in the asking pricing of a housing unit which includes apartments as well as houses from 2014 to 2019.

During that time, the peak average asking price per housing unit in Colombo amounted to Rs. 75 million, which also raised concerns of a real estate bubble. Thus, the prices slightly adjusted downwards, but not drastically. 

On another note, some positive factors driving the demand in the real estate market were also mentioned. The first factor included the relaxed government regulatory policies on property acquisitions by foreign nationals and removal of VAT (value-added tax) and NBT (nation-building tax). 

The second factor was the availability of the low-cost financing opportunity due to a low interest rate environment which influenced a rise in residential real estate demand. This was followed by another factor of the depreciation of the Sri Lankan rupee against other currencies making Sri Lankan real estate more affordable.