Apartment sales give fillip to Overseas Realty September performance

• Residential property sales showing signs of slowdown amid soaring inflation, interest rates 

Overseas Realty (Ceylon) PLC reported some robust financial performance in the nine months through September but the most recent quarter performance reflected signs of slowdown in the residential property market amid the soaring interest rates and inflation. 

The property developer reported revenues of Rs.2.26 billion for the July-September quarter, up 14.2 percent from the same period in 2021. 

Apartment sales at its Havelock City Residential project brought in Rs.1.65 billion revenues, up 27.01 percent, while the rental income generated Rs.499.2 million, down 1.8 percent from the same period last year. 

However, for the nine months through September, the company’s revenues soared 159.4 percent to Rs.12.79 billion over the same period last year, on the back of Rs.10.9 billion in revenues from the apartment sales, which were up by a massive 268.7 percent over the same period last year. 

In the nine months, its rental incomes edged up 1.51 percent to Rs.1.58 billion and the bulk of it was generated by its iconic World Trade Centre (WTC) twin towers, which is celebrating its 25th anniversary this year.  

The company said the rental income from WTC rose by 3 percent to Rs.1.55 billion amid the increase in rental rates.

The company’s share added 10 cents or 0.68 percent to close at Rs.14.90 last Friday.  

Based on its experience seen in selling its Havelock City Residential units, the company said it witnessed a slowdown in the residential market, after the first four months of this year.

In April, Sri Lanka’s economy fell into a deep crisis following a debt default, firing runaway inflation and sending interest rates through the roof, which together sent shockwaves across all markets, including property and real estate. 

“The strong growth in revenue and profitability was fronted by the robust performance of Havelock City Residential sales during the first four months of 2022. Since then, the steep increase in inflation and interest rates has slowed down demand for residential property,” the company said in a press release. 

Overseas Realty last week inaugurated the Mireka Tower at Havelock City, its mixed-used development project, comprising of a shopping mall and an office tower, consisting of 50 stories, 600,000 square feet and Grade A premium office spaces.

The company for the third quarter reported earnings of 90 cents a share or Rs.1.12 billion, compared to 64 cents a share or Rs.789.76 million in the comparable period last year.