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Sri Lanka has decided to lease six former ministerial bungalows in Colombo’s Cinnamon Gardens area for 30 years as part of an effort to turn underused state-owned properties into income-generating assets. The properties can be developed for tourism-related businesses, boutique hotels, cafes and restaurants, while ownership of the land and buildings will remain with the government. The move is linked to the government’s broader effort to reduce public spending on politicians and make better use of vacant state properties. Investors will be responsible for securing the approvals and other requirements needed to develop the properties.
The Sri Lankan government has decided to offer six former ministerial bungalows in Colombo on 30-year leases, allowing private investors to develop the properties for commercial purposes while the state retains ownership.
The bungalows are located in Cinnamon Gardens, one of Colombo’s established residential areas. According to the Ministry of Finance, the properties will be made available for tourism-related businesses, boutique hotels, cafes and restaurants.
The government has identified these properties as strategically located state assets that can be put to productive use through private sector investment. The objective is to generate economic value from properties that are currently underused while retaining public ownership of the land and buildings.
Some of the properties have a long association with Sri Lanka’s political administration. One of the bungalows served as the official residence of successive foreign ministers for more than a decade, while five others had traditionally been used as official residences by ministers under successive governments.
The decision also reflects the current government’s policy of reducing expenditure associated with maintaining official residences for politicians. The National People’s Power (NPP) government had pledged during its campaign ahead of the 2024 presidential election to reduce wasteful government spending, including expenditure linked to politicians.
Under the current administration, ministers are not being provided with official bungalows. As a result, a number of government-owned residences have remained vacant, creating an opportunity to consider alternative uses for the properties.
The selected investors will be responsible for obtaining all approvals, permissions and other requirements needed to make their proposed businesses operational. The government, however, will continue to own both the land and buildings throughout the lease period.
The move forms part of a broader discussion in Sri Lanka around putting underutilised state properties to commercial use. Earlier government planning had also considered a larger group of government-owned houses and bungalows for redevelopment through private investment, including uses such as boutique hotels, restaurants and other viable projects. A previous proposal had identified 24 properties for potential 30-year leases under a public-private partnership model.
Cinnamon Gardens is particularly suited to such proposals because of its central location and concentration of government institutions, diplomatic missions, heritage properties and established commercial and hospitality destinations. The area is also home to several prominent cultural and public landmarks, making tourism and hospitality among the potential uses for properties that receive development approval.
The approach also follows an existing pattern in Colombo where heritage residences and properties have been adapted for hospitality uses. For example, the former Bandaranaike family residence in Cinnamon Gardens was converted into the boutique Tintagel Colombo, showing how older residential properties in the area can be given commercial and hospitality uses while retaining their character.
For the government, the proposed leases offer a way to reduce the burden of maintaining vacant properties while creating a potential source of recurring revenue. For investors, the 30-year tenure provides a relatively long period in which to develop and operate businesses on centrally located government-owned land.
The final use of each bungalow will depend on the proposals submitted by investors and the approvals required for their respective projects. The government’s decision to retain ownership means the arrangement is focused on commercial use of the properties rather than outright sale of state assets.
Source PTI
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