Finlays enters JV with JKH to develop Vauxhall Street land

From left: Finlays Colombo Limited Director Naresh Ratwatte, Finlays Colombo Limited Chairman and Managing Director Hunter Crawford, John Keells Holdings PLC Property Group President Suresh Rajendra and John Keells Holdings PLC Property Group Sector Head Nayana Mawilmada at the signing of the joint venture agreement

Finlays Colombo Limited has entered into a joint venture agreement with two wholly-owned subsidiaries of the John Keells group for the development of its land at 186, Vauxhall Street. 
The commencement of the joint venture is subject to satisfaction of conditions precedent, including approvals from or filings with relevant authorities, a Finlays Colombo media statement said.

In 2008, Finlays, JKH and the AMW group entered into a memorandum of understanding to undertake a feasibility study for a combined development of their properties situated adjacent to each other in Colombo 2.

However, the plans didn’t see the light of day.
“We are ready to form a joint venture with the John Keells group to embark on a very exciting development project in the heart of Colombo,” Finlays Colombo Chairman/Managing Director Hunter Crawford said.

“We believe that property development in Colombo 2 has significant long-term growth potential. The ultimate parent company of Finlays Colombo, the Swire Group, has a successful track record in property development in several parts of the world and Finlays will undoubtedly benefit from working with the John Keells group, which has substantial local property development experience,” he added.
When the joint venture commences, Finlays Colombo Limited will hold a 39.72 percent share and the John Keells group will hold 60.28 percent.  

“This is a very exciting addition to our current holdings on Vauxhall Street,” said John Keells Property Group President Suresh Rajendra.

“While we are in the process of drawing the master plan, we will lead with the development of this property in partnership with Finlays Colombo, a reputed business group in Sri Lanka. The project’s progress will be in conjunction with future developments on the adjoining properties and will tie in with our other property development projects spread across Colombo,” he added.

Simultaneously with developing its land bank in Central Colombo, the Finlays group of companies in Sri Lanka is embarking upon a strategic realignment of its business focus.  

This realignment will see significantly increased focus on its core tea business—both plantations and export packing—and divestment of its non-tea businesses—insurance, cold store, pest control, hygiene and courier services.

“Our non-tea businesses are all well-run and profitable enterprises in their own right and have done us proud. But with our decision to focus on tea, where Finlays is a global player, we need to find new owners who can take these non-tea businesses to the next level,” said Crawford.

Finlays Colombo also announced a US $ 3.0 million investment in new tea packing equipment for its factory in Welisara.  

“This is a significant investment in the capacity of our Sri Lankan tea packing business,” Finlays Colombo Director Gihan Jayasinghe said.

“We are committed to growing our Ceylon Tea business.  It is already an important contributor to Finlay’s global product and service portfolio and we have plans for further expansion,” he added.