Lanka Realty Investment PLC (“LRI”) announced that it expects enhanced cash flow visibility and a materially strengthened balance sheet following the acquisition of a controlling stake in Lee Hedges PLC, marking a key milestone in the Company’s ongoing turnaround strategy.
The transaction follows the successful monetisation of non core land assets, including the sale of the Baseline Holdings land, and reflects LRI’s deliberate pivot away from passive land banking towards a yield focused real estate platform centred on income
generating commercial properties.
With the acquisition of Lee Hedges PLC, the enlarged Group now benefits from a significantly strengthened recurring income base, supported by high quality real estate assets and disciplined capital allocation. Management expects the Group to operate on
a cash flow positive footing, while progressively improving profitability, capital efficiency, and financial resilience.
As at the end of the second quarter of the financial year 2026, Lee Hedges PLC holds approximately LKR 1.76 billion in cash and near cash resources, providing the Group with meaningful liquidity. This capital is expected to be deployed strategically to reduce
interest bearing liabilities, lower finance costs, and further enhance consolidated operating cash flows.
LRI has also approved a phased balance sheet optimisation strategy, aimed at reducing leverage and strengthening the Group’s financial position over the medium term.
The Company noted that its repositioning strategy is already delivering tangible results, as demonstrated by the performance of Onally Holdings, the owning company of Unity Plaza and HQ Colombo, as well as the Group’s hospitality portfolio.
As part of its ongoing focus on maximising asset yields, the Group recently launched the largest LED screen wall in Sri Lanka on the facade of the Unity Plaza building, leveraging its prime Colombo city location to create a new, high margin advertising
income stream. This initiative underscores LRI’s approach of unlocking incremental value from existing assets through innovative commercialisation strategies.
Through targeted asset upgrades, active management, and yield optimisation initiatives, these assets have delivered improved occupancy, stronger cash flows, and enhanced asset values, unlocking value for shareholders.
Commenting on the outlook, Mr. Hardy Jamaldeen, Managing Director of Lanka Realty Investment PLC, said:
“This acquisition represents a clear inflection point in LRI’s turnaround. Having monetised legacy land assets, we have now repositioned the Group around income generating commercial real estate with clear visibility on earnings, cash flows, and
capital deployment. Our focus going forward is firmly on optimising yields, strengthening the balance sheet, and delivering sustainable growth and value for our shareholders.”
Management said the combination of strategic asset recycling, disciplined acquisitions, and active asset management positions Lanka Realty Investment PLC to benefit from improving real estate fundamentals and renewed investor confidence in Sri Lanka, while
continuing to execute on its transformation into a resilient, cash generative real estate investment platform.
