The Latest Real Estate Trends in Sri Lanka

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As funds are coming in from overseas in speculation for growth in the economy, real estate developments are rapidly progressing.

Colombo, the capital of Sri Lanka

The development of Colombo, the central city of Sri Lanka, is remarkable. Sri Lanka has continued economic growth at an annual rate of 5% since the civil war which lasted for 26 years and ended in 2009. During the recovery and growing phase, China has continued to invest in Sri Lanka. Currently, with the expected launching of digital TV broadcasting, there are a number of major construction projects in progress. The Lotus Tower is close to completion, with several hotel residences, office tower buildings, and shopping malls all up and coming to make up the trendy new city. All of these developments are funded by Chinese investors. China is also investing in the steadily underway Port City Project; a development that will create a new city by reclaiming two square kilometers of the southern tip of Colombo Harbor,

Why is China focused so much on Sri Lanka?

One reason is that of the geopolitical importance of Sri Lanka.
China is aiming for port development and promotion of trade in the region from the coastal area of China through Southeast Asia and South Asia to the east coast of Africa while setting up the concept of the ‘Silk Road Economic Area’, they call “One Belt One Road”. Sri Lanka located on the coast of India can also be an extremely important base in relations between the neighboring countries of China and India.

Sri Lanka is right above the sea lane carrying materials such as oil from the Middle East to East Asia. Just as modern cities Singapore and Hong Kong have evolved to be major ports of intermediary trade, Sri Lanka is following suit only now, vindicated from delayed advancement due to long-lasting civil war. The time is definitely now for Sri Lanka; cultivating its growth with a big wave of investments coming from influential neighboring countries.

AREAA Global explores the possibility of a small up-close trip to this developing nation in 2018. Stay tuned for updates.

For more information on Colombo & Sri Lanka real estate opportunities please contact Atsuko Yube, AREAA Global Board of Directors & Silicon Valley Chapter leadership at ay@atsukoyube.com

The Sharing Economy – How AIRBNB is Affecting the Hotel Industry

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Kurt Nishimura – AREAA Global Board of Directors and 2018 AREAA National Commercial Chairman,  weighs in on the effects Airbnb has on the hotel industry within the Sharing Economy.

Much has been made of the new Sharing Economy on how it has harmed certain industries. What do I mean when I refer to the Sharing Economy? It is companies like Uber, Lyft, Turo, and AIRBNB where a company uses a technology platform to allow individuals use their asset to become an entrepreneur. While it has hurt certain parties, I would argue it has helped level the playing field within to the benefit of the consumer. It has successfully diverted a portion of the demand from one party to another party. Technology has allowed a way of lowering the cost structure so consumers have a lower priced alternative to the status quo. It is giving power to the single entrepreneur a way of competing against larger companies where initial capital requirements used to be a huge barrier to entry. The sharing concept has made it possible to lower costs and increase the utilization of assets and spawn new companies like work staff (TaskRabbit), taxi services (Uber and Lyft), car rental (Turo) or hotels (Airbnb and VRBO).

The most successful sharing companies are in the transportation industry due to companies like Lyft and Uber. Their platforms have been a game changer in how we view driving and owning your own car. Airbnb is starting to have a similar effect on the hospitality industry. This has made hotel owners and union leaders (formerly opposition parties) to start working together to try to put legislation to restrict the use of this popular alternative to renting a hotel room. Many cities are looking into legislation to curb the ability for homeowners to rent out their property because the cities have seen declines in the bed taxes the cities receive from the hotel industry. It is much easier for cities to collect from a few hotels than it is from thousands of homeowners or investors who are more difficult to track down and remit bed taxes back to the local municipalities. In New York, the city is cracking down on illegal AIRBNB listings according to the watchdog group, Inside AIRBNB, however, the city still has over 30,000 listings but is down approximately 20% from a year ago. Just how big is the impact AIRBNB is having? According to a report in 2015 from the New York City Hotel Association that has over 270 member hotels, the city had lost over $2.1Billion in gross revenues in sales which translates into 450 Million in bed taxes costing the city over 2800 in hotel jobs. Airbnb has made significant inroads into the hospitality industry to the extent that major hotel consulting firms now try to measure the impact it has and will continue to have in the industry. Does this spell doom for the hotel industry? Probably not but AIRBNB certainly has created a niche in the market where the small entrepreneur can thrive if they know how to deliver service that is on par with major hotel companies.

One area where the hotels still hold a significant advantage is they have two very well established independent rating systems which let the consumers know what the service levels and amenities they can expect before a consumer picks a hotel. One rating system is the Diamond created by AAA and the other is the star rating system by Mobil. The diamond rating system focuses more on the experience expectation of a group or corporate traveler versus the star system which focuses more on the leisure traveler. While Airbnb tries to establish some consistency in their rating system, the ratings are based on the individual hosts and travelers who rate one another. This is an area where AIRBNB really needs to improve upon in order to effectively compete and be seen as an equal to the hotel industry. It cannot rely solely on individual owners and their guests to properly rate themselves. This is probably one of the key measures needed where consumers who have been reluctant to try AIRBNB to try the service and compare.

The full effect of AIRBNB’s impact on the hotel industry is still being played out but the initial impact is certainly having an effect worth noting. In the next couple years, we will know if AIRBNB is simply a fad of the new sharing economy or a real player in the hospitality industry.

This article originally appeared in the 1st Quarter A/R/E Magazine. Some of the content was updated related to some of the impact figures and projections in the previous version.

Serene Homes Immigration Opportunity

BUY U.S. REAL ESTATE, GET A GREEN CARD!

Help your network build their American Dream! Live, Study, Work, Play and Prosper in the land of opportunity!

Serene Country Homes, a U.S. based developer, is working with leading US immigration lawyers and the AREAA Global team to provide a great path towards the American dream while making lucrative returns on the U.S. real estate market.

Simply buying US Real Estate in the traditional manner does not qualify you for an immigration opportunity. Investor Immigration programs in the U.S. require you to invest in a new commercial enterprise that can create jobs within a specified period of time.

Serene Country Homes Property Developer’s Program (PDP) allows investors to:

– Start their own New Commercial Enterprise

– Buy and sell real estate through the building of homes in one of the strongest real estate markets in the United States.

– Create Jobs through the day to day operation of their business

– Have full control over the company’s accounts and assets

– Make at least a 10% return on investment per year

There is limited availability in this unique program so please register now to find out more and help your network achieve their own American Dream!

Email matthew.skerry@serenehomes.com to set an appointment.

Encore Resort at Reunion: Vacation Rental Homes in Orlando

AREAA Global is proud to announce its newest developer partner, Encore at Reunion Resort in Orlando. This revolutionary resort home community offers 4-12 bedroom resort homes from $350-800k. AREAA Global and ISG Asia have been hosting fly & buy tours with a great response from investors. We have seen 100% of the investors that have visited the resort write offers on these resort homes. Revenue projections for 2018 from the management company are easily into double digits ROI.

AREAA Boston members Tom Troung & Don Choi have had great success introducing this affordable investment option to their investors and already have 3 handsome referral checks coming with their upcoming closings!

Want to buy in Miami?

The Miami Herald carried out a recent study and asked should you buy or rent? What are the best neighborhoods? The top 3 questions ask where would you buy for a single family home, an apartment and where to avoid buying.

To see the full article go to www.miamiherald.com.

 

Thinking about buying a property in Malaysia?

Thinking about buying in Malaysia?

Foreigners can find great deals, but they need to know some of the market’s unique challenges this article has some great tips.

To find out more go to www.mansionglobal.com