LRI unlocks Rs. 2.26 b through strategic transfer of Unity Plaza investment, completing a landmark transaction that strengthens Lee Hedges PLC as the Group’s dedicated commercial property platform while enhancing Lanka Realty Investments PLC’s financial flexibility for future growth.
LRI unlocks Rs. 2.26 b through strategic transfer of Unity Plaza investment to Lee Hedges PLC
Lanka Realty Investments PLC (LRI PLC) announced that it has successfully transferred its 50.88% controlling stake in On’ally Holdings PLC to Lee Hedges PLC for approximately Rs. 2.26 billion. The strategic transaction forms part of the Group’s long-term plan to streamline its corporate structure, unlock shareholder value and establish a focused listed commercial property platform.
The transfer follows several years of active asset management by LRI PLC, which acquired its investment in On’ally Holdings during a challenging period for Sri Lanka’s commercial real estate sector. Recognising the untapped potential of Unity Plaza, the Group invested more than Rs. 400 million to modernise the property through infrastructure upgrades, refurbishment of common areas and improvements to the tenant mix.
These enhancements delivered significant operational improvements. During LRI PLC’s ownership, annual revenue increased from Rs. 181.70 million to Rs. 413.85 million, while occupancy rose from 86.90% to 96.37%. Retail rental rates climbed from Rs. 332.53 per square foot to Rs. 966.73, while office rental rates increased from Rs. 122.25 to Rs. 289.12 per square foot.
The Group said these results demonstrate the effectiveness of its active asset management strategy in transforming a well-known commercial property into a higher-performing income-generating asset.
Including dividends of approximately Rs. 525.31 million received during the investment period, the transaction generated total cash value of approximately Rs. 2.79 billion for LRI PLC. The company also expects to record an estimated separate-company gain of approximately Rs. 834.09 million, before transaction costs, taxation and final audit adjustments.
For Lee Hedges PLC, the acquisition significantly expands its portfolio by adding Unity Plaza, one of Colombo’s most established retail and office complexes. The property has remained a leading destination for technology retailers and office tenants for more than three decades, generating stable rental income through a diversified tenant base and consistent visitor traffic.
The addition of Unity Plaza is expected to strengthen recurring earnings, improve long-term revenue visibility and provide a solid platform for future acquisitions within the commercial property sector. The Group believes this positions Lee Hedges PLC as its flagship listed property company with greater operational scale and enhanced opportunities for shareholder value creation.
Meanwhile, the transaction provides LRI PLC with greater financial flexibility by releasing approximately Rs. 2.26 billion in capital. The proceeds are expected to improve liquidity, strengthen the balance sheet, reduce borrowings and create capacity to pursue new strategic investments and acquisitions.
Importantly, although LRI PLC has transferred its direct ownership in On’ally Holdings, it continues to maintain an indirect strategic interest in Unity Plaza through its controlling shareholding in Lee Hedges PLC. This structure enables shareholders to retain exposure to the future performance of the landmark asset while benefiting from a simpler and more efficient corporate framework.
Commenting on the transaction, LRI PLC Chairman Sarravanan Neelakandan said the deal reflects the successful execution of a disciplined multi-year strategy focused on asset enhancement, value creation and capital recycling. He noted that consolidating Unity Plaza within Lee Hedges PLC establishes a dedicated listed commercial property platform with recurring income and future acquisition potential while allowing LRI PLC to strengthen its financial position and invest in new growth opportunities.
The Board also acknowledged the contributions of Executive Directors Hardy Jamaldeen and Archie Warman in delivering the transaction.
The successful completion of the deal marks another important milestone in the Group’s long-term investment strategy. With Lee Hedges PLC positioned as its dedicated listed commercial property company and LRI PLC benefiting from improved financial flexibility, both entities are expected to pursue future investment opportunities while continuing to deliver sustainable long-term value to shareholders.