Why Kurunegala is a success story
WHY KURUNEGALA IS A SUCCESS STORY
Countries are made of land and its people. Mankind’s biggest passion will always be owning land. History boasts of kings and emperors who conquered land to grow their political and economic strength. Whether they used war or other means to gain land, the greatness of a leader – be it Alexander the Great or King Dutugemenu – was mainly determined by the size of land they governed during their reign.
Time and names may keep changing, but countries, even at present, use land to their advantage. The oldest cities to the brand new reclaimed lands keep inventing the most efficient ways to grow. According to the Harvard Business Review, there are four types of cities and each has a way to prepare for the future.
The definition of “Legacy City” is explained as something that existed before – a road or building, or even a regulatory authority or an entrenched service business. The CBH Lands Intelligence unit has used this matrix to analyze Sri Lankan cities and concludes that Kurunegala falls into the category of “Emerging Economy, Legacy City”.
Cities such as Kandy, Galle, Colombo, Jaffna, and Anuradhapura are Legacy Cities, because they were selected as kings’ residences or ports many centuries ago. As a result, irrigation, agriculture, religious places, roads, and hospitals were developed and never completely abandoned. Even though local kings moved from Anuradhapura to Polonnaruwa to many other regions, the old cities remained. And those regions are still, up to date, populated districts.
In Sri Lanka, Colombo city has developed far greater than the rest. According to the Sri Lanka’s Department of Census and Statistics, in 2020, the average household income of a Colombo resident was over USD 8,600 and had a purchasing power per capita (PPP) over USD 25,000 (National PPP in 2020 was USD 7,871, which means Colombo’s PPP over three times higher). It's plain to see that the living standards, types of businesses available, and even the “thinking” in Colombo are different from other cities in the country.
So, are all cities in Sri Lanka “Emerging”? Are all cities “Legacy Cities”? No. Let’s look at Gampaha – the second most populated district in the country with a population of 2,417,000 (CBSL Annual Report, 2020), but with a higher voter base than Colombo! Is it a Legacy City? No. In comparison, there’s no vast history there. Why it became more populated was because the land was more affordable and was easy to commute from there to Colombo. This is the reason why the Kelaniya Bridge is mostly used in the mornings (school and office traffic), and back in the evening. So, in the Sri Lankan context, Gampaha is a “New City”, and so would be Athurugiriya – closer proximity to the financial capital of the country, affordable real estate, and road connectivity are the reasons for its growth. There’s heavy dependence on Colombo. This is why they market themselves as “few” kilometers to Colombo.
If a country invests heavily in developing a brand new city, would it work like Masdar City? Whilst Abu Dhabi’s Masdar City is a success story, it doesn't necessarily mean the results will be immediate. For example, Myanmar tried doing this by creating a brand new capital with a thumping investment over USD 30 billion by creating “Naypyidaw City” in 2002. This unheard-of city has 20-lane highways with three hotel districts and even replicas of their famous landmarks. But not many people live there. Malaysia’s Forest City is another example. A city that’s designed for 700,000 people has only a population of 500 now. These examples show that artificial development may not always bring timely projected results, because the biggest asset, “people”, cannot be “homed” artificially.
So what does this mean for Sri Lanka? Can a huge investment create the ultimate “Developed Economy, New City”? If that happens, will that be affordable for locals? Because Malaysia’s Forest City was unaffordable to the locals. Would it be an immediate success or would it take longer than projected like the Forest City?
This is why we say Kurunegala is a success story. Let’s look at what works right for Kurunegala. Kurunegala is not a new city, nor is it in close proximity to the financial capital like Gampaha. Kurunegala cannot market itself by saying only a few kilometers to Colombo. In other words, Kurunegala has not piggybacked on Colombo. Because of this, Kurunegala has developed independently.
?Kurunegala is a Legacy City with a colorful history and has all the required elements needed for a city, such as schools, international schools, hospitals, and people. It is the third most populous district with a population of 1,729,000 people (CBSL Annual Report, 2020) in the country and is the second largest contributor to Sri Lanka’s GDP.
Location is everything. Other than “Galle Road”, Kurunegala (even without the Central Expressway) has access to almost all main roads in the country: Kandy Road, Dambulla Road, Puttalam Road, Negombo Road, and Colombo Road. The Central Expressway is a springboard for sure, but it's not the only highway that’s connecting the district to the rest of the country. According to the Road Development Authority, by 2030, three more highways will be intersecting through Kurunegala;
Kurunegala’s biggest real estate advantage is its affordability. Like Forest City in Malaysia, if a country has to invest USD 30 billion to develop a brand new city, chances are that you also have to attract foreigners to invest in these real estate developments. If foreigners were able to own land in Sri Lanka (which they cannot directly), locals will not be able to afford land. Right now, land prices are affordable in Kurunegala in comparison to Gampaha and Colombo.
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Real Estate Decision Triangle
CBH Lands Intelligence “Real Estate Decision Triangle”
Our research unit has studied and come up with the compromises one has to make when purchasing real estate.
?The triangle consists of three areas: Space, Location, and Budget – in which, one usually compromises/sacrifices one for the other two. Let’s assume that you want to reside in Colombo 7 and have a specific budget, then almost all the time, you must compromise on the space/size of the property. It will be smaller than the property you can get for the same budget in Colombo 5, for example. Sometimes, to stay in a spacious property in the location needed, one will sacrifice the budget and even go to an extent where ownership is compromised – you will select the option of renting/leasing instead. To keep the location and budget intact, you would choose an apartment over a house. But what happens if you wait to decide?
Let’s add the fourth element of time into the triangle. What happens if you wait?
Just like time waits for no one, nor does real estate. The only time the real estate market took a downturn was during the tsunami attack in December 2004. The prices of beachfront real estate in the southern coast and other coastal areas took a short-lived downturn. With amended property development laws, hotels started rebuilding, brand new operators came into the picture, and tourism boomed once again. In November 2011, the Southern Expressway was declared open, and property prices since then have increased exponentially. A new demand was created: Property closer to highway exits (than along the Galle Road).
Kurunegala: Emerging Economy, Legacy City
Real Estate Decision Triangle: What will you compromise?
If you agree with the research we have shared so far, you will know that there is no compromise if you invest in Kurunegala right now.
You will also know that this is real growth with real assets (like that of the southern belt) and is not due to any artificial reasons. It’s not an exercise to build a brand new city, but to boost an economy that already exists, and that would grow exponentially if logistical infrastructure is further developed. Phase 4 of the Central Expressway will be connecting Dambulla to Colombo via Kurunegala. Dambulla, as you may know, is the central agriculture trade hub of the country. Therefore, this highway, along with the other highways (connecting to Jaffna and Trincomalee), will benefit locals and trade. Whilst the southern property belt was developed through tourism, the north-western/northern belt will be developed through trade.
So, would Kurunegala be a tourist city? Not immediately. Since Kurunegala was not marketed as a tourist destination, it never got into the limelight. That is why its humble growth never got any attention. But with these giant infrastructure developments and its people, it will be the next biggest city in the country – a trade hub. We envision it to grow to be a business city like Chicago in the US and Manchester in the UK.
Why Kurunegala, why now is simply because right now, you don’t need to compromise. Whether you are looking for a property to build your first home or next home, or whether you wish to have a commercial property closer to the highway exits, there’s no necessity to compromise the location, space, or the budget.
And what’s in Kurunegala? It’s a Legacy City with existing infrastructure and people who have lived there for generations.
So don’t wait. Because, unless you add “luck” into the equation, the early bird catches the worm.
(CBH Lands Intelligence holds the copyright to this research finding. Reproduction, distribution, or commercial exploitation of this research finding is prohibited without written permission from CBH Lands Intelligence)
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