While the rest of the Philippines is generally bracing for the worst to come in 2009, Cebu on the other hand is expected to emerge on top of the country’s other cities in terms of real estate developments.
Big developers will continue to keep an eye on potential properties to develop in Cebu. "Banks are lending again, and friendlier again, this allows developers to push for projects especially in Cebu in 2009," said CB Richard Ellis Group, Inc., chairman Rick Santos.
Aside from office building developments, more tourism-oriented projects are expected to rise in Cebu starting this year, despite the looming global recession that is seen to affect the Philippine economy in the middle of 2009.
Ayala Land Inc. (ALI) chairman Fernando Zobel de Ayala for his part said that the company is constantly looking at opportunities in Cebu, to build more projects, saying "there will be more to come."
Zobel said that with or without crisis, Cebu will continue to be a good area for ALI expansion, adding that more projects in both residential and commercial projects are coming.
Based on a study made by CB Richard Ellis Group, it bared that the number of residential condominiums is expected to rise starting 2009 as Cebu is now becoming a home to businessmen, expatriates, executives and Business Process Outsourcing (BPO) companies, among others.
Developers, who are targeting the upper middle and high-end markets, see the need for building condominiums since the costs of properties, like house and lots in subdivisions, are rapidly increasing.
"There are more residential buildings in the pipeline, which are presumed to start construction in 2009," the study further revealed.
For his part, Cebu Holdings Inc. (CHI) president Francis O. Monera said that although Cebu offers a tempting opportunity to speed up plans in pursuing residential and commercial projects in 2009, developers are also very careful in calibrating the Cebu market.
"We are not operating in a vacuum," Monera said, explaining that although Cebu economy in general is providing a positive economic outlook, it is also vulnerable to effects from the world's weak economic landscape.
CHI, one of the largest real estate developers in Cebu, is responsible for the existence of the posh Ayala Center Cebu, the 50-hectare Cebu Business Park, the 24-hectare Asia Town IT Park, and the luxurious sea-side subdivision called Amara in Lilo-an, northern Cebu.
Part of CHI's plan is to expand the accommodation of Asia Town IT Park and develop a BPO enclave through its subsidiary company Cebu Property Ventures and Development Corporation (CPVDC). Also in the pipeline is the completion of Ayala Center Cebu's final phase, which is to build another expansion of the shopping mall.
AboitizLand Inc., which is also into developments of residential and commercial projects, is also putting its plans in place for 2009, although intense caution is being adopted to find a good timing in the middle of global economic unrest.
AboitizLand Inc. president Andoni Aboitiz said the company has not turned off its radar, as it is always on the lookout for better opportunities in the coming years.
On the other hand, based on its market study result, CBRE revealed that industrial market in Cebu is expected to remain relatively inactive in 2009 citing global economic slump coupled with the slowdown in the local economy as main contributors of the weakening industrial market for next year.
"Local experts believe that the effects of the global economic crisis will begin to be strongly felt by the start of the second half of 2009," said Santos.
Santos, quoting the monthly integrated survey of selected industries of the National Statistics Office, said “for a year and a half now, the country's industrial output has been on a successive decline.”
He attributed the occupancy cost, including power, limits the entry of most multinational manufacturers to the Philippines.
On top of that, Santos echoed the general sentiment of local experts, saying the end of the crisis is still uncertain, which will leave most companies maintaining a "wait and see" stance in the months ahead.
However, Santos said that the CBRE-Philippines study showed that the industrial market is "more than prepared" to meet the requirements should the demand arise.
He said the different industrial parks in Cebu have adequate facilities and are very much capable of providing industrial space requirements of potential locators in the area.
"The upcoming infrastructure improvements in terms of transportation and power will make the industrial parks in the area even more attractive. The availability of skilled and qualified labor in Metro Cebu will also be one of the major selling points to potential locators," Santos said.
The prospect of attracting locators will be further enhanced by the greater economic stability of the local economy compared to neighboring cities and countries in Southeast Asia.
Santos noted that some industrial locators have pulled out from Vietnam and Indonesia and may consider relocating their activities in the Philippines, with Cebu, Clark and Subic as among of the major options.
Because of this development, Santos projected that developers will be forced to push on their planned projects this year, responding the increasing demand for office-space, housing needs, among others.
Meanwhile, the same study also found out that the market for residential resort complex developments is seen to go up in the coming years, and will kick off specifically in 2009, although interest of this market has started already in the last couple of years.
It emphasized that developers are targeting high-end markets as well as foreigners who are planning to settle in the area.
Developers also believe that the new program initiated by the Department of Tourism (DOT) dubbed "Live Your Dream" campaign, could also further boosts Cebu's real estate sector, as it has the qualities that foreign investors are looking for.
Filinvest Development Corporation head for sales and marketing in Visayas said that this new DOT campaign could generate fast sales turn-over of Cebu's real estate products, specifically condominiums, while Cebu is gaining popularity as one of the attractive sites for "vacation homes."
Through the DOT's "Live Your Dream, campaign, the agency is partnering with prestigious and giant developers in the country to push "investment tourism", inviting foreigners to buy vacation houses or condominium units in the Philippines.
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