Goan developer Vianaar enters Sri Lanka’s second residential market

Vianaar founder Varun Nagpal, says land in Sri Lanka is cheaper, and about one-fourth the cost, compared to Goa today.

2024-10-21 12:49:39 :

BENGALURU: Cheaper land and continued demand for second homes have prompted Goa-based luxury developer Vianaar to enter the Sri Lankan real estate market.

Vianaar specializes in the sale of apartments and villas in the second home market and recently launched an upscale villa property in Ahangama, a coastal town in Sri Lanka’s popular Galle region. The project, called Pol Vatta Estate, spans two acres and has just eight villas. The price of each villa is approx. $38 million rupees, two bedrooms, a private pool with outdoor shower.

For Vianaar, which has been developing projects in Goa for nearly 15 years, this is a pilot or test project in the neighboring country before more projects are planned there. The company has purchased another 20 acres of land in Ahangama for future development.

As demand for vacation homes soars in the wake of the pandemic, the second home market has gained traction and continues to attract ultra-wealthy individual buyers as well as non-resident Indian (NRI) investors. As a top destination in the second home market, the small coastal nation of Goa is likely to be the biggest beneficiary.

“Sri Lanka is what Goa was 15 years ago and Ahangama is what Assagao (a village in Goa) was then. There were a lot of Europeans coming into Sri Lanka, buying land and building boutique hotels. The second home market is largely untapped. Compared to Goa today, land is cheaper and costs about a quarter. Now is a good time to enter the market,” Vianaar founder Varun Nagpal said in an interview.

The developer has started selling villas, mainly to existing Indian clients.

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Second homes are typically purchased for owner-occupancy for a certain number of days a year and are also driven by rental income. At the post-pandemic peak, rental yields in Goa reached 9-10%, probably the highest in the country, according to real estate consultancy Savills. Rental yields in Goa have now fallen to around 6-7% due to ample supply and rising property prices.

Rental yield is the annual return a property generates in the form of rent, expressed as a percentage of its market value.
“Rental yields in Sri Lanka are also quite good at about 7%,” Nagpal said.

Other operations

As a company, Vianaar also works with homeowners and manages rentals for their properties.

Vianaar has sold over 1,000 homes in Goa and currently has over 300 homes under construction. its homes typically cost $2-15 Crores, some villas may be priced as high as $250 million rupees.
Given the continued demand for second homes in India, the company will also launch its first project in Kashaulin in the coming months. The project will have two and three-bedroom villas priced between $3.3 and 5.5 Crores.

“This will be our first project in the hills and there is a huge demand for second homes in Kasauli. However, our main focus is Goa where the demand remains strong,” Nagpal added .

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