- Raises objection over Government valuation
- UDA-Azotels Hospitality signed MoU in July
- New investment expected for project: UDA
The Japanese investor has reportedly decided to pull out of the ‘Visumpaya’ deal, citing exorbitant valuations provided by the Government Valuer, The Sunday Morning reliably learns.
It is learnt that the Government’s appraisal of the property is twice as high as the valuation conducted by the Japanese company.
Visumpaya, which was used as the residence of many State leaders, was earmarked to be converted into a boutique hotel by the Urban Development Authority (UDA) to attract foreign investments to Sri Lanka.
Accordingly, a Memorandum of Understanding (MoU) was signed by the UDA and Azotels Hospitality Ltd. on 7 July at the UDA auditorium. The agreement was signed by UDA Chairman Nimesh Herath and Hong Kong Azotels Hospitality Ltd. Chairman Adrian Zecha.
Through the MoU, the Visumpaya building has been handed over to Azotels Hospitality under a 50-year lease. Azotels Hospitality was to run this as a super hotel along with Hunas Holdings and Japan’s Partner Consortium.
Confirming the issues pertaining to the already entered MoU, UDA Additional Director General Mahinda Withanaarachchi stressed that new investments were expected for the development of Visumpaya.
“There were issues related to the valuation of the property and the Japanese investor will most probably walk away from the project,” he said.
As per the proposed project, the Visumpaya building was to be turned into a super hotel under this programme. Based on the economic situation of the country, the aim is to develop such ancient buildings through private and public partnerships without UDA money being spent.
The property was to be developed as an eco-friendly high-end boutique hotel, with luxury rooms, common areas, and restaurants to accommodate high-end tourists.
Built on 24 August 1835 by King William during the colonial period at Union Place in Colombo, this building was used as a hostel for officers of the Ceylon Rifle Regiment for a long time. The building, constructed according to foreign architecture, was first known as Acland House.
Highlighting the current investments, Withaanarachchi stressed that the UDA had embarked on four mega development projects, including Visumpaya.
The Government has given the green light for several development projects after months of pandemic-induced setbacks. The projects that have now received the go-ahead include market buildings in Gampaha, Avissawella, Panadura, and Ampara, and the Boralesgamuwa multi-purpose building.
He noted that while projects valued at less than Rs. 100 million were still awaiting approval, the larger-scale initiatives, often structured as Public-Private Partnerships (PPPs), were already in motion.