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FINANCIAL CHRONICLE™ » DAILY CHRONICLE™ » US-Brit investors willing to pump US$ 90mn plus for 7- star Gaffoor bldg hotel project, but…

US-Brit investors willing to pump US$ 90mn plus for 7- star Gaffoor bldg hotel project, but…

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CSE.SAS

CSE.SAS
Global Moderator
*Proposed 300 plus edifice on forty storeys runs into legal, ownership snags
By Ravi Ladduwahetty

A consortium of American and British investors are willing to inject a total sum of in excess of US$ 90 million for a 300 room plus seven star hotel project in the now virtually- collapsing Gaffoor building in Fort, but what is preventing the project from proceeding is the snags related to the ownership of the building.

"There are investors who are more than keen to invest over US$ 90 million for the project which is inclusive of an estimated land value far in excess of the market prices for the 117 perches of land that the building is on, and an unprecedented amount for the 300 plus seven star plus rooms which will be over 40 storeys so far spent for a five star hotel of this nature hitherto spent in Sri Lanka," sources close to the project told The Island Financial Review yesterday.

The investors will also come in with a star class internationally acclaimed brand, through it was premature to declare it yet. They have taken into cognizance the view of the Colombo port and the sea which is adjacent to it, the sources said.

Another major drawback is the ownership of the building. Although on paper, the EAP Group and the Edirisinghe family owns it, there are a series of others who are claiming ownership of the building which also includes the descendants of the original owners- the Gaffoor family and who have got injunctions against the sale of the building. Attempts by the consortium to acquire it outright has been futile for so- called owners who already have taken injunctions against the sale of the building which has scared the investor, sources point out.

They also said that this process has scared the investors as litigation would take indefinite periods of time and would delay the process.

The only practical way out for the collapsing building was for the government or the Urban Development Authority, which has given it a classification of a Grade I listing, to acquire it and call in for fresh proposals or by the time the legal snags were over, the entire building would be in a state of ruination so that no one could use it, they said.

A structural engineer, talking to this newspaper on the basis of anonymity, said that the external skin of the building was a separate structure which will enable any developer to retain the façade of the building without causing damage and the main development could be within this structure.

In addition to this, by preserving the peripheral structure, will also make the collonade (the undercover path round it which have got columns along it) and the collenade is an attractive feature which has been added by the British into many buildings in Colombo Fort enabling the user to walk round the natural element and protected from the sun and the rain).

The UDA had the powers vested in it to issue a conservation order to the owners of the building as it is a building that the UDA deems it of national importance, they said.

The sources also said that there were many buildings in Colombo which were of architectural and archaeological eminence which have been demolished d in the recent past by making use of loopholes in the legal systems in protecting such buildings and they appealed to the National Trust of Sri Lanka to probe in detail and intervene in protecting in the few such buildings which are yet standing which are yet a part of Sri Lanka’s national heritage.

Another drawback to the project being pursued is that there are squatters who have been at the premises who have been present and they too might also demand their squatters’ rights. So, the only way out to salvage the building is for the government and or the UDA to acquire it and call for fresh bids for investment taking into consideration its prime location and also to conserve the building while saving it from total collapse, they remarked.
http://island.lk/index.php?page_cat=article-details&page=article-details&code_title=56284

Malika1990

Malika1990
Senior Vice President - Equity Analytics
Senior Vice President - Equity Analytics
*Proposed 300 plus edifice on forty storeys runs into legal, ownership snags
July 8, 2012, 12:00 pm


By Ravi Ladduwahetty

A consortium of American and British investors are willing to inject a total sum of in excess of US$ 90 million for a 300 room plus seven star hotel project in the now virtually- collapsing Gaffoor building in Fort, but what is preventing the project from proceeding is the snags related to the ownership of the building.

"There are investors who are more than keen to invest over US$ 90 million for the project which is inclusive of an estimated land value far in excess of the market prices for the 117 perches of land that the building is on, and an unprecedented amount for the 300 plus seven star plus rooms which will be over 40 storeys so far spent for a five star hotel of this nature hitherto spent in Sri Lanka," sources close to the project told The Island Financial Review yesterday.

The investors will also come in with a star class internationally acclaimed brand, through it was premature to declare it yet. They have taken into cognizance the view of the Colombo port and the sea which is adjacent to it, the sources said.

Another major drawback is the ownership of the building. Although on paper, the EAP Group and the Edirisinghe family owns it, there are a series of others who are claiming ownership of the building which also includes the descendants of the original owners- the Gaffoor family and who have got injunctions against the sale of the building. Attempts by the consortium to acquire it outright has been futile for so- called owners who already have taken injunctions against the sale of the building which has scared the investor, sources point out.

They also said that this process has scared the investors as litigation would take indefinite periods of time and would delay the process.

The only practical way out for the collapsing building was for the government or the Urban Development Authority, which has given it a classification of a Grade I listing, to acquire it and call in for fresh proposals or by the time the legal snags were over, the entire building would be in a state of ruination so that no one could use it, they said.

A structural engineer, talking to this newspaper on the basis of anonymity, said that the external skin of the building was a separate structure which will enable any developer to retain the façade of the building without causing damage and the main development could be within this structure.

In addition to this, by preserving the peripheral structure, will also make the collonade (the undercover path round it which have got columns along it) and the collenade is an attractive feature which has been added by the British into many buildings in Colombo Fort enabling the user to walk round the natural element and protected from the sun and the rain).

The UDA had the powers vested in it to issue a conservation order to the owners of the building as it is a building that the UDA deems it of national importance, they said.

The sources also said that there were many buildings in Colombo which were of architectural and archaeological eminence which have been demolished d in the recent past by making use of loopholes in the legal systems in protecting such buildings and they appealed to the National Trust of Sri Lanka to probe in detail and intervene in protecting in the few such buildings which are yet standing which are yet a part of Sri Lanka’s national heritage.

Another drawback to the project being pursued is that there are squatters who have been at the premises who have been present and they too might also demand their squatters’ rights. So, the only way out to salvage the building is for the government and or the UDA to acquire it and call for fresh bids for investment taking into consideration its prime location and also to conserve the building while saving it from total collapse, they remarked.
http://island.lk/index.php?page_cat=article-details&page=article-details&code_title=56284

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