A slice of Dubai, a dash of Singapore, and South Asia’s next big thing, Port City Colombo, is estimated to attract USD 15 billion in total Foreign Direct Investment upon reaching full commercial maturity
By Angitha Pradeep
As urbanisation accelerates and economies pivot towards resilience and diversification, the race to create integrated, sustainable city developments is heating up. Across the globe, smart city projects are booming, with projections estimating a staggering USD 5 trillion investment by 2030. Asia and the Middle East are leading the charge, driven by the need to diversify beyond traditional revenue streams and adapt to rapidly shifting global markets.
Amidst this backdrop, Port City Colombo stands out as a visionary project redefining South Asia’s economic and urban landscape. Nestled in Sri Lanka’s bustling capital, this Special Economic Zone (SEZ) is much more than a business district. It is a meticulously planned ecosystem that blends opportunity, sustainability and cosmopolitan living, tailor-made for discerning investors.
For investors from the Middle East, Port City Colombo represents an intriguing case study in urban innovation. It combines the strategic appeal of South Asia’s growing economic significance with a forward-thinking model that prioritises sustainability and seamless business integration.
Port City Colombo rises from 269 hectares of reclaimed land stitched to Colombo’s existing Central Business District, forming Sri Lanka’s first foreign-currency-designated Special Economic Zone. Featuring transactions in designated foreign currencies with more relaxed capital and exchange controls, the SEZ is ring-fenced from domestic macro-shocks, and its runway—both geographical and regulatory—points straight at Gulf investors hungry for diversification.
“Real estate development remains an area of intriguing opportunity, especially as an alternative investment tool in an era where traditional investment tools are proving to be volatile,” says Shalaka Wijeyaratne, Executive Director for Investment Promotion and Marketing at Port City Colombo.
He continues: “Demand for commercial property currently outpaces supply in the Middle East, prompting investors to explore more profitable locales that offer a non-aligned hedge with lower entry costs and higher long-term yields.”
Port City Colombo’s location, he adds, “provides unparalleled access to South Asia, Africa and Southeast Asia,” giving investors reach into 25 per cent of the world’s population while sitting just four to five hours’ flying time from key GCC cities. Five character districts anchor the master plan:
Headline hospitality comes via an Integrated Resort—over 1,000 hotel keys, a world-class theme park and Sri Lanka’s first regulated offshore gaming venue, pending the Gambling and Sports Regularisation Bill now before Parliament. “These facets directly mirror the diversification priorities of Gulf sovereign wealth funds and family offices,” Wijeyaratne notes.
The 2021 Colombo Port City Economic Commission Act created a single‑window regulator able to license, regulate and administer the zone. Initially conceived purely as a real‑estate reclamation project, Port City Colombo has since evolved into a fully-fledged multi‑service SEZ designed to export modern services.
“This Special Economic Zone provides a progressive regulatory environment underpinned by a liberal policy framework that prioritises investment facilitation and the ease of doing business,” Wijeyaratne explains.
Incentives include 100 per cent foreign ownership, personal income tax benefits, preferential long-term visas (including for spouses and children), an on-site international arbitration centre, and attractive fiscal benefits for eligible businesses such as enhanced mobility of capital and profits, corporate income tax exemptions, and customs and border tariff waivers. The framework, he says, “is also conducive to Sharia-compliant finance and Islamic banking.”
Port City Colombo also styles itself as Sri Lanka’s first “Green and Blue SEZ.” “The city’s masterplan, initially conceived by Sweco and optimised by JLL and Surbana Jurong, draws inspiration from Singapore’s urban planning,” the executive director notes. Shaded walkways, dedicated cycle lanes and other amenities are expected to reduce car dependence, while developers earning top-tier green ratings gain a five per cent bonus in gross floor area. One-third of the land is reserved for parks, beaches and blue corridors, with 40 hectares of it already mapped.
WATCH: Port City Colombo
“The Marina District at Port City Colombo is the most fascinating aspect of the project,” Wijeyaratne believes. The Luxury Marina Development—33,776 sq. m, USD 120 million—broke ground in January 2025 and will berth 200 to 250 yachts, linking cruising circuits from Dubai and the Maldives to Singapore and China. “The development will establish the island as a perfect transit hub between yacht hotspots in East Asia, South Asia and the Middle East,” he says. Construction is slated for 24 to 36 months.
Momentum is also accelerating inland. In May 2025, Port City Colombo commemorated the formal handover of office space to anchor tenants at the Business Centre, a key milestone marking the operationalisation of commercial activity within the SEZ. Officially breaking ground in March 2024, the Business Centre represents a USD 5 million foreign direct investment by China Harbour Engineering Company (CHEC), and comprises nine low-rise office buildings, including a dedicated IT hub and commercial cluster. Approximately 80 per cent of its space has been leased to Authorised Persons approved by the Colombo Port City Economic Commission.
CHEC, the primary project developer, has already invested around USD 1.4 billion into Port City Colombo, making it Sri Lanka’s largest foreign direct investment and public-private partnership to date. Parent company CCCC, a Fortune 500 enterprise active in 145 countries, views Port City Colombo as one of its most strategic global ventures. The Business Centre is envisioned as a catalyst for knowledge exchange, innovation, and high-value job creation.
Furthermore, in a significant milestone for the Port City Colombo Special Economic Zone, the Colombo Port City Economic Commission and Government recently officially designated four major real estate projects as Primary Businesses of Strategic Importance—IFC Colombo 1 (Private) Limited, Ceylon Real Estate Holdings (Private) Limited, Clothespin Management and Development (Private) Limited, and ICC Port City (Private) Limited.
This formal recognition, announced via gazette notifications issued on 14 July 2025 by President Anura Kumara Dissanayake in his capacity as Minister of Finance, Planning and Economic Development, unlocks a suite of exemptions and incentives for the companies involved, unlocking a cumulative foreign direct investment inflow of around USD 1.2 billion, thus further accelerating development momentum aimed at creating a vibrant commercial, residential, and tourism hub within Port City Colombo.
According to Port City Colombo, discussions are currently underway for an international university, school and hospital. Investor interest is already locked in for one of three Marina District residential parcels, with construction anticipated before year-end, while other residential, commercial and hospitality plots move steadily toward financial close.
Anchor backing comes from Browns Investments PLC, the strategic arm of LOLC Holdings, whose portfolio spans the Luxury Marina, Marina Hotel and the Colombo International Financial Centre. In addition, Port City Colombo’s adviser list reads like a who’s who—Boston Consulting Group, AECOM, PwC, KPMG, EY, JLL, CBRE, Knight Frank, Pinsent Masons and Bird & Bird—while partnerships with the Commonwealth Enterprise & Investment Council and SLASSCOM widen global trade and tech corridors.
“Port City Colombo is currently undergoing an exciting phase,” Wijeyaratne says, flagging the steady march of piling rigs across the marina waterfront. For Gulf capital looking east, the message is blunt: a car-lite, currency-secure, sustainability-led enclave now sits midway between Suez and Singapore, positioned to attract Middle Eastern capital seeking long-term, high-yield opportunities.
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