Odel has shifted its Ward Place Mall project strategy, replacing planned luxury apartments with office space to stabilize revenue amid ongoing financial challenges. The move aims to address losses while ensuring sustainable development of the mixed-use property.
Odel converts Ward Place apartments to office space amid financial restructuring
Odel PLC has announced a significant change to its flagship Ward Place Mall project, scrapping plans for luxury apartments and repurposing the space into office units. The decision comes as part of a broader remedial plan to manage the severe financial pressures that have placed the retailer on the Colombo Stock Exchange’s Watch List.
The company disclosed this strategy in its annual report for the 2024/25 financial year, revealing a net loss of Rs. 4.45 billion. Independent auditors Ernst & Young highlighted a “material uncertainty” regarding Odel’s ability to continue as a going concern, citing accumulated losses of Rs. 12.7 billion and current liabilities surpassing current assets by Rs. 15.2 billion.
By pivoting to office space, Odel intends to create a more predictable and stable revenue stream. Management emphasized that office rentals carry lower development risks than residential apartments, offering a steady source of income that can help the company navigate financial challenges. The revised plan is also expected to reduce the total funding requirement for the project, currently valued at Rs. 17.8 billion in capital work-in-progress. To complete the mall under this new design, Odel plans to secure Rs. 4.5 billion in fresh funding, primarily through advances from office space sales and additional equity.
This shift is a key component of Odel’s remedial strategy, which also includes improving operational efficiency and rationalizing its retail footprint. The company has already closed 17 underperforming stores during the last financial year and introduced new value-focused ‘ODEL Brands Outlet Stores’ to serve cost-conscious customers. Additionally, dynamic marketing efforts aim to boost mall footfall, while alternative financing sources are being explored.
Debt management remains a central concern for Odel. As of March 31, 2025, total interest-bearing borrowings stood at Rs. 20.77 billion, with Rs. 8.2 billion tied to the Ward Place Mall project through a syndicated loan facility led by Hatton National Bank (HNB) and joined by Sampath Bank and Bank of Ceylon. The company is actively negotiating debt restructuring with the consortium, which has responded positively and is evaluating options to align repayment schedules with the updated project timeline.
Despite these challenges, Odel has shown operational resilience. Revenue for the six months ending September 30, 2025, rose to Rs. 3.3 billion, up from Rs. 2.7 billion in the same period the previous year. This growth demonstrates the company’s ability to maintain performance amid financial adjustments.
The revised Ward Place Mall plan illustrates Odel’s approach to balancing ongoing development with financial prudence. By replacing the apartment component with office space, the company aims to secure stable returns while completing the mixed-use project. The company’s broader strategy focuses on cost rationalization, strategic store openings, and seeking potential equity partners, including support from the Softlogic group, to strengthen its retail operations.
Odel’s efforts to stabilize operations, manage debt, and restructure its flagship project signal a cautious but proactive approach to navigating financial pressures. With continued monitoring, strategic marketing, and the introduction of flexible office rentals, the company is positioned to complete the Ward Place Mall project and maintain a resilient retail presence in Sri Lanka.