After nearly two decades of delays, billions of rupees in public investment and repeated failed attempts to revive one of Sri Lanka’s most recognisable unfinished developments, the Government has entered what could be the decisive phase in the sale of Canwill Holdings (Private) Limited, the state-owned company behind the Grand Hyatt Colombo project.
Sri Lanka’s EPF exited its non-yielding 5-billion-rupee investment in Canwill Holdings, transferring the stake to the government to redeploy capital. This move follows criticism over the fund’s low yields and management.
The Ministry of Finance, Planning and Economic Development has formally launched the divestiture of its entire shareholding in Canwill Holdings, appointing Deloitte India as transaction advisor to oversee the international bidding process. The move has drawn strong interest from both local and overseas investors, with eight parties submitting Expressions of Interest before the March 16 deadline, signalling renewed confidence in one of the country’s largest dormant hospitality investments.
Among the international names understood to have entered the process are India’s Chalet Hotels Limited and Juniper Hotels Limited, both established players in the premium hospitality sector. The bids are currently undergoing evaluation before the Government shortlists prospective investors for the next stage of negotiations.
The Canwill transaction has assumed unusual significance within the Government’s broader reform programme. While several proposed divestitures of non-strategic state assets remain on hold, Canwill Holdings has emerged as the only major state enterprise currently moving through an active privatization process, highlighting the urgency attached to unlocking a project that has remained idle for years.
Standing on 2.32 acres of prime oceanfront land in Colombo’s commercial district, the 47-storey tower has long dominated the city’s skyline as an unfinished landmark. Although its reinforced concrete structure and external façade have been completed, the building still requires all internal finishing works together with its mechanical, electrical and plumbing systems before operations can commence.
Industry estimates indicate that approximately US$120 million around Rs.36 billion at current exchange rates will be required to complete construction. Once operational, the development is expected to comprise 458 five-star hotel rooms together with 100 luxury serviced apartments, making it one of Sri Lanka’s largest mixed-use hospitality developments.
The sale also includes Canwill’s subsidiary, Sinolanka Hotels & Spa (Pvt) Ltd, which owns the Colombo Hyatt project, and Helanco Hotels & Spa (Pvt) Ltd, which retains leasehold rights over 9.42 acres of beachfront land in Hambantota despite the abandonment of plans for a separate Hyatt-branded development there.
The project’s troubled history stretches back to 2006 when it was launched by the Ceylinco Group as the luxury “Celestial Residences” development. Construction came to a halt following the 2008 Golden Key Credit Card collapse, leaving thousands of tonnes of exposed concrete as a visible reminder of one of Sri Lanka’s biggest corporate failures.
Following the Government’s acquisition under the Underutilized Assets Act in 2012, billions of rupees were injected into the project through EPF.