M.H. Jamaldeen, Managing Director of On’ally Holdings and Tharsini Sarveshwaran, Executive Director – Operations, share insights into the journey, growth and prospects of one of Colombo’s iconic landmarks, Unity Plaza.
__How has On’ally Holdings PLC’s journey evolved since its founding in 1982? And what key milestones have contributed to the company’s success in the real estate market in Sri Lanka? __
In 1982, Mr On’ally Gulam Hussain founded On’ally Holdings, responding to the government’s initiative to redevelop key areas in Colombo. With an initial capital of Rs100 million, he embarked on a groundbreaking mixed-use project, which was truly transformative. At that time, the Sheraton area lacked shopping centres or mixed developments like Unity Plaza, Liberty Plaza, and later, Majestic City. These mixed-development projects later on would emerge as distinctive additions to Colombo’s urban landscape.
Unity Plaza was a pioneering effort in the realm of public-private partnerships with the Urban Development Authority (UDA). The UDA invested funds into the project, a collaboration that stands out given the rarity of such government investments today. The project was also closely linked to the Board of Investment (BOI), which provided tax incentives and other advantages to attract critical investments.
Without the invaluable support from these entities, Unity Plaza would never have become a reality. Over time, it evolved into a hub for various shops and offices, including government agencies, Janashakthi, and immigration offices. At one point, even the Western Province Governor’s office briefly operated from this location. Organically, IT retailers became the dominant presence in the retail segment over the years.
Recognizing Unity Plaza’s potential, Lanka Realty Investments leveraged our extensive property expertise as we set our sights on acquiring Unity Plaza. In 2020, we acquired a controlling stake of 51%, driven by our goal to replicate a successful strategy which we had implemented in the UK. This strategy involved strategically clustering retail tenants to create a mutually beneficial environment.
In Sri Lanka, there is a prevailing perception that neighbouring businesses are competitors. However, Lanka Realty aimed to break this mindset by creating an ecosystem where the presence of similar businesses attracted more customers, benefiting everyone involved. We planned to expand this model from the lower ground, ground, and first floor, which boasted the highest average rental income, to encompass five floors of retail.
To achieve this vision, we had to address a significant challenge: vertical movement within the building. The existing configuration featured only one escalator connecting the ground and first floor; forcing customers to navigate across the building and take elevators to access higher floors. This hindered the customer shopping experience journey within the retail centre.
Our solution was the installation of additional escalators to seamlessly connect all five retail floors. We had to reengineer the building design and overcome various structural challenges. The final result was successfully cutting through the building’s core to accommodate new escalators, significantly enhancing the overall shopping experience at Unity Plaza.
Tharsini Sarveshwaran, Executive Director – Operations
And going back to the point where you said that a predominant number of tenants are from the IT and computer industry. What do you think incentivized this majority of IT and computer retailers?
In reality, tech and IT companies stumbled upon the fact that Unity Plaza had organically become the go-to destination for IT needs across the country, entirely by chance. People were naturally flocking here for IT services, and this realization led us to adopt a more structured approach through the implementation of scientific retail cluster design.
Through our market research, we discovered that approximately 60-65% of the country’s IT retail and distribution were centred at Unity Plaza. Our objective was to elevate this figure to 90%. To achieve this goal, we conducted in-depth research to identify the remaining 15-16 key players we needed to bring on board. Our approach was strategic, as we invited them to occupy vacant spaces in a targeted manner. Assessing each tenant’s potential rental capacity became a pivotal consideration, emphasizing the importance of unit sizing.
In line with our vision of Unity Plaza as a focal point for IT services, we made deliberate changes. We removed the outdated bookshop, which no longer aligned with our goals. We relocated Perera and Sons, placing a firm emphasis on establishing Unity Plaza as a dedicated destination for IT enthusiasts. For those seeking food options, we designated a separate food arcade on the second floor, catering to their needs without diluting the primary IT focus.
What are your plans for this complex?
Looking ahead, our vision for Unity Plaza expands to encompass the creation of a comprehensive ecosystem. Our plan involves repurposing upper floors by removing certain offices to make room for an auditorium. This auditorium will play a crucial role as a venue for tech launches and tech training, addressing the current shortage of suitable training spaces for both our home-grown start-ups as well as the international tech companies which operate in the market.
Additionally, we envision the introduction of an organized storage facility that will greatly benefit tenants with limited shop space. Our storage facilities will allow for efficient management of equipment and supplies through trackable software, ensuring that stocks are well-maintained and safe. This concept is designed to help reduce the costs associated with acquiring larger shop spaces solely for storage purposes.
In line with our ecosystem-building initiative, we have ambitious plans to establish IT training schools, providing further support for IT enthusiasts and professionals. We are also set to allocate an area within Unity Plaza for angel investors and startup businesses, offering affordable rents to promote the growth of new ventures. Our overall vision here is to provide the resources necessary to nurture, develop, and build the IT sector within the country. This sector is important for the future of Sri Lanka, and we want to do our part in nurturing a thriving ecosystem which pushes this.
Our ultimate objective is to attract young startups and entrepreneurs, fostering a dynamic and vibrant atmosphere within Unity Plaza. This approach benefits not only these startups but also draws in a diverse crowd of individuals who can contribute to and support the existing tenants.
Returning to the concept of retail clustering, we are meticulously organizing high-end gaming shops, computer and laptop retailers, repair shops, and accessory stores into specific designated areas. This strategic organization ensures that customers and visitors know precisely where to find what they need, greatly enhancing the overall shopping experience. The meticulous planning of retail clustering stands as a crucial and integral component of our overarching strategy.
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