Goa developer Vianaar taps second-home market in Sri Lanka

Bengaluru: Cheaper land and continued demand for second homes have prompted Goa-based luxury developer Vianaar to enter the property market in Sri Lanka. 

Vianaar, which sells apartments and villas with a focus on the second home segment, recently launched a premium villa property in Ahangama, a coastal town in Sri Lanka's popular Galle district. The project named Pol Vatta Estate is spread across two acres and has just eight villas. Each villa priced at around ₹3.8 crore, has two bedrooms, a personal pool, with outdoor showers.

For Vianaar, which has been developing projects in Goa for nearly 15 years, this is a pilot or test project in the neighbouring country, after which it plans to do more projects there. It has already acquired another 20 acres in Ahangama, for future development. 

The second-home market gained favour in the aftermath of the pandemic, as demand for holiday homes soared, and continues to attract ultra-rich individual buyers as well as non-resident Indian (NRI) investors. The tiny coastal state of Goa has been possibly the biggest beneficiary as a destination of choice in the second-home segment.  

“Sri Lanka is what Goa was 15 years ago, and Ahangama is what Assagao (a village in Goa) was like then. There are a lot of Europeans coming into Sri Lanka, and buying land and building boutique hotels. The second-home market is still largely untapped. Land is cheaper, and about one-fourth the cost, compared to Goa today. It's a good time to enter the market,” Vianaar founder Varun Nagpal said in an interview.

The developer has started selling the villas, mainly to its existing Indian customers. 

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Second homes are typically bought for self-use for a certain number of days a year, and are also driven by rental income. At its post-pandemic peak, rental yields in Goa had reached 9-10%, as per property advisory Savills, possibly the highest in the country. With a lot of supply and escalating property prices, rental yield in Goa has moderated to about 6-7% now. 

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

Other operations

As a company, Vianaar also ties up with homeowners and manages the rental operations of its properties. 

Vianaar has sold over 1,000 homes in Goa, and has over 300 homes currently under construction. Its homes typically cost ₹2-15 crore, with a few villas that could cost up to ₹25 crore. 
Given the consistent demand for second homes in India, it will also launch its first project in Kasauliin the coming months. The project will have two—and three-bedroom villas priced between ₹3.3 and5.5 crore. 

“This will be our first project in the hills, and there is a lot of demand for second homes in Kasauli. Our primary focus however is Goa, where demand continues to be strong,” Nagpal added. 

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