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"Jaffna has much potential - it is a new market," Cargills (Ceylon) managing director Imtiaz Wahid told LBO.
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"There aren't many retail complexes in Jaffna so there is a need for a shopping and entertainment complex."
The northern Jaffna peninsula is undergoing a remarkable transformation after the end of the 30-year ethnic war in 2009, with many banks having set up branches and several hotels planned.
Money from members of the minority Tamil community who migrated during the war is also pouring in.
Cargills (Ceylon), which runs Sri Lanka's biggest supermarket chain under the 'Food City' brand, announced this week it will invest 500 million rupees to build a shopping and entertainment complex on Hospital Road in the heart of Jaffna town.
Wahid said the building, for which the ground