Cebu's real estate sector remains upbeat in 2011

By Ehda M. Dagooc (The Freeman) Updated December 27, 2011 12:00 AM

CEBU, Philippines - Cebu’s real estate industry proved to be the most dynamic sector in 2011, and this is expected to sustain in the next few years, as the province gains interest from both local and foreign developers as well as property buyers.

“Growth in Cebu’s real estate industry continued in an upward trajectory as is evident in the number of construction projects in the City, particularly within the Cebu Business Park and Cebu I.T. Park-collectively called the Cebu Park District,” said Cebu Holdings Inc. (CHI) president Francis O. Monera.

Together with its mother company Ayala Land Inc., (ALI), CHI launched several real estate projects in Cebu 2011, bringing in the different brands of ALI, such as Alveo, Ayala Premier, Avida, among others.

For ALI and CHI alone, the company has calculated at least P10 billion projects in the next few years for Cebu, including already CHI’s expansion of the Ayala Center Cebu which will start early 2012, that will incur the company at least P2 billion investments.

“Construction activities around the city have become more dynamic at present with more developments in the pipeline that continue to diversify from horizontal to vertical projects,” said Monera saying that this development reflects the increasing number of condominium units which is expected to grow by 74 percent to over 5,000 units to complete in 2011.

“Together with an expanding office space that may reach to some 460,000 square-meter of usable area or 15 percent than the 2010 inventory in Cebu,” said Monera.

Well known developers had strengthened its presence in Cebu and built series of projects, including new real estate sector investors, some are exporters who diversified their businesses to the booming sector.

Despite the fear of supply glut in the next few years, specifically in the condominium inventories, brokers’ believe that Cebu will not experience what Metro Manila is experiencing, wherein value of condo units dropped to their lowest levels, due to oversupply.

In Cebu however, real estate brokers are confident that thousands of condominium inventories in Cebu will be sold out in the short-term, while interest from both local and foreign buyers is getting stronger.

Anthony Leuterio, president of the Philippine Allied Chamber of Real Estate Brokers and Licensed Salesmen (PhilAcre) said that Cebu will benefit on the movement of international investors particularly from the United States and Europe, looking at Asia as their preferred property investment site now.

Cebu, with its good image in tourism, and as an investment destination is seen to lure more foreign property buyers,--condominium units in particular.

According to Leuterio, based on the profile of property buyers in Cebu in the last few months, his company—Leuterio Realty Company, with a network of over 200 brokers selling properties within the Philippines noted a tremendous increase of foreign buyers in condominium in Cebu. These buyers do not only buy one or two units, most of them are buying bulk number of units—largely for investment purposes.

Leuterio said Cebu’s decision to position itself as a preferred “vacation destination” has paid now, regardless the lack of full support from the government in terms of promotion. He believes that Cebu is blessed with its “Hawaii-like ambiance”, and international investors are preparing to take advantage of this opportunity.

While the international buyers pushed the active and strong confidence of developers to provide more condominium units, Leuterio said some developers also in Cebu are also maximizing the interest of local buyers with their equally strong interest in buying house and lot properties within the Metro Cebu area, as well as in the beachfront countryside locations.

Real estate marking consultant and educator Jun Garing held the first real estate sales forum, designed for condominium selling in the middle of this year.

Garing said, the event was held to equip licensed brokers and learn from the pitfalls of condominium marketing, so that Cebu will be able to be saved from supply gut in the next three years, and inventories of condos will be sustained by strong interest especially from the foreign market.

While interest from the developers continue, Garing whose company is commissioned to market the Filinvest property at the South Road Property (SRP), and also owned a real estate training facility—Salesman’s Centre, said that there is no time for Cebu to prepare for a professionalized condo marketing—but now.

This is because, Garing noted that Cebu’s real estate selling culture, still lacks uniqueness and still has to embrace its maturity level.

In fact, he said Cebu has to adopt different strategies in marketing condominium properties, such as introducing package-selling, condo-tel concept and even fractional-ownership.

Amid the interest from industry players, and buyers, Garing said Cebu has to address the concern of providing good property management services.

Garing, a seasoned real estate seller, said while there are a lot of projects being built here, property management service here has not take off yet.

The boom of real estate in Cebu is here, he said adding that this development should be complemented with the proper and right support services. Otherwise, glut in supply that will result to slide of property value in the next few years will be experienced.

As of latest count, there are a total of 36 developers whose projects have been approved for condominium buildings. This is worth over P100 billion worth of investments. (FREEMAN)