Odel to invest US $ 106mn in mixed development project

Sri Lanka’s leading lifestyle retailer Odel PLC yesterday revealed plans to invest US $ 105.7 million in a mixed development project at Ward Place, Colombo 7.

To this end, Odel Properties One Private Limited, a fully-owned subsidiary of Odel PLC, has entered into an agreement with the country’s apex investment promotion agency, the Board of Investment (BOI).

The company however did not say in its filing to the Colombo Stock Exchange as to how it was going to finance the development and the Softlogic group, Odel’s parent company, is highly leveraged. 

Odel has commenced the development of its 600,000 square feet megamall on the land adjoining its flagship store at Alexandra Place, which is set to open in three years. 

The company however made no reference to this development in the disclosure made yesterday. 

Meanwhile, the company also said that it would notify the market the steps that would be taken to comply with the minimum public holding requirement set out by the Securities and Exchange Commission (SEC) last year.

This dismissed the earlier speculation that Odel PLC was mulling a delisting from the Colombo bourse. 

The SEC announced the enforcement actions for non-compliance in a notice made recently. 
As of June 30, 2017, Odel PLC had a free float of 2.43 percent among 5,409 shareholders and had a float adjusted market capitalization of Rs.171.9 million. 

The Softlogic group, which acquired a 93.2 percent stake in Odel PLC in 2014 from its founder Otara Gunawardene and her family, is led by its founder Chairman Ashok Pathirage, who has a flare for leveraged buyouts. 

Odel to lease retail space in Shangri-La’s One Galle Face

Fast expanding its footprint in the upmarket retail space, Odel PLC on Tuesday became the first local retailer to lease sizeable retail space at One Galle Face, the mixed development project by Shangri-La Hotels and Resorts. 

To this end, Odel PLC has already signed agreements with Shangri La Hotels Lanka Private Limited to take on lease for a total area of 52,454 square feet in ‘The Mall at One Galle Face’ for a period of five years from the date of the commencement of the project, which is renewable for another five years. One Galle Face is a US $ 450 million mixed development project, which consists of 390 apartments including 16 penthouses, a grade A office tower and a shopping mall. 

This project also includes a range of restaurants, meeting facilities that will be among the largest in Colombo, with over 4,500 square metres (48,438 square feet) of function space spread over three floors, fitness centre, spa, pools and outdoor tennis courts.

The Hong Kong-based leisure group, Shangri La Hotels and Resorts, which broke ground in February 2012 for the project, is expected to open the complex later this year.

The deal will significantly enhance the brand value of Odel in particular because of the higher visibility it may receive from associating with a global brand such as Shangri La Hotels and Resorts, which also has properties in the Asia Pacific, North America, the Middle East and Europe. 

Shangri-La earlier this year said over 50 percent of apartments had been sold and buyers were a mix of Sri Lankan diaspora and international investors. 

The price of the smallest 1,700-square foot three-bedroom apartment starts from US $ 800,000.
Last month, Odel PLC entered into a separate agreement with Colombo City Centre Partners Private Limited, the developers of a US $ 150 million mixed lifestyle development project in Colombo 2, to take on a lease for a total area of little under 40,000 square feet of retail space.