Colombo land value continues upward trajectory

• Residential segment leads gains

Colombo District’s land market maintained its upward momentum through 2025, with the Central Bank of Sri Lanka’s Land Valuation Indicator (LVI) showing sustained growth across residential, commercial, and industrial segments.

Data released for the second half of 2025 shows the LVI rising 10.6 percent year-on-year, following an 11.4 percent increase in the first half. Residential land recorded the strongest annual gains, with a 12.4 percent rise in 2H25, moderating slightly from the 14.4 percent jump in 1H25. Commercial land increased 11.3 percent in 2H25 (vs. 11.5 percent in 1H25), while industrial land grew 8.0 percent (down from 8.4 percent in 1H25).

On a semi-annual basis, growth was more moderate in the second half, though both residential and commercial segments saw stronger increases compared to the first half. Analysts note this reflects continued urban demand, particularly in Colombo’s residential and commercial hotspots, while industrial land prices showed steadier, measured growth.

The LVI trends indicate persistent investor confidence in Colombo’s prime locations, even as overall growth rates moderate slightly from the first half. Residential and commercial lands continue to attract speculative and end-user demand, whereas industrial land reflects longer-term development planning.

The LVI, which has been compiled on a semi-annual basis since 2009 and rebased in 2017, provides a composite measure across residential, commercial, and industrial land prices using data from the Government Valuation Department.

Technical revisions introduced in 2022 ensured the indicator more accurately reflects prevailing market conditions, with Colombo’s 13 divisional secretariat areas fully represented.