Clothespin Management and Development has announced the relocation of its Cey Laya project to a new site within the Colombo Port City after engaging in discussions with the China Harbour Engineering Company (CHEC). Priyath Bandu Wickrama, the CEO of Clothespin, confirmed that the project is still underway and has been strategically moved to a different land block within the Port City.
Wickrama elaborated that the new location provides enhanced flexibility in Development Control Regulations, improves revenue potential, and boosts profitability while maintaining the original vision of the development. This update follows a report by FINANCIAL CHRONICLE regarding the expiration of the previous project agreement, which was not finalized within the required six-month timeframe leading up to January 2026.
The delays in finalizing the earlier land arrangement were attributed to broader national issues and concerns from international investors regarding Sri Lanka’s economic climate at the time. Wickrama noted that these factors had an impact on international financing processes. However, he expressed optimism as conditions have notably improved, and discussions with key stakeholders are progressing.
In a separate communication, Clothespin reaffirmed that the Cey Laya development is active and has not been halted. The updated project represents a significant investment backed by foreign capital, with an estimated total cost of around USD 595.69 million. Initially, the company had committed USD 540 million, with allocations of USD 75 million for land leasing and USD 465 million for construction.
With the strategic move to the new land block and adjustments to the project scope, the revised development plan is anticipated to yield improved revenue potential, enhanced commercial efficiency, and better long-term profitability. The Colombo Port City Economic Commission (CPCEC) had previously granted Clothespin a 25-year tax exemption in a Gazette published in July of the previous year. The original plan included constructing a remarkable twin tower complex, featuring a clock tower that would surpass Big Ben in size.
The development was intended to house the world’s largest art gallery on a designated plot of land totaling 24,324 square meters within Colombo Port City, as stated by the CPCEC in a prior gazette notice. Clothespin emphasized that the new site allows for greater flexibility in planning, design, land use, and revenue-generation aspects, which is expected to enhance the overall commercial viability of the project.
The company described the relocation as a strategic enhancement rather than a cancellation, asserting that the fundamental design and vision of Cey Laya remain intact. The project will continue to feature luxury accommodations, high-end residences, premium office spaces, retail and lifestyle facilities, cultural areas, AI data centers, an observation deck, and two rooftop helipads.
Regarding funding, the project sponsors have initiated a EUR 300 million secured debt investment structured through a Credit Linked Note associated with the Cey Laya development. This investment is set for a 10-year term, with repayments due at maturity. Following the relocation, the annual investor coupon has increased from 9.8% to 10.4%, reflecting the enhanced commercial profile of the project and offering a more appealing return for institutional and qualified investors.
The bond investors will receive the 10.4% annual coupon through semi-annual interest payments, ensuring a consistent income stream throughout the investment period, subject to the final investment agreement’s terms. The investment structure also includes a minimum collateralization of 120% and a minimum subscription amount of EUR 100,000.
The company is actively engaging in a global marketing campaign to attract institutional and qualified investors for the bond. In addition to the bond financing, the revised business model anticipates additional funding through advance booking fees and pre-sales linked to the luxury residential and hospitality elements of the project. Collectively, the EUR 300 million bond initiative and the expected advance sales will form the cornerstone of the funding strategy for the updated Cey Laya development.
Clothespin highlighted Sri Lanka’s strategic position between Dubai and Singapore, along with its proximity to major global shipping routes and the investor-friendly framework of the Colombo Port City Special Economic Zone, as critical factors supporting developments of this nature.
