Wednesday, December 28, 2011
REAL estate in Cebu is booming and the industry is optimistic growth will continue next year, with the continued strong inflow of overseas remittances, low interest environment and growth in tourism and business process outsourcing (BPO).
“Growth in Cebu’s real estate industry continued as is evident in the number of construction projects in the city,” said Cebu Holdings Inc. president Francis Monera.
He pointed out accelerated development within the Ayala-owned Cebu Park District (Cebu Business Park and Cebu IT Park).
Monera said construction in Cebu has become more dynamic and diversified.
“This 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 some 460,000 square meters of usable area or 15 percent more than in 2010 in Cebu,” Monera said.
Growth drivers
Philippine Association of Realtors Board Inc. – Cebu Realtors Board Inc. (Pareb-Cereb) president Antonina Fritzche credited the growth of the industry to BPOs, foreign students like Koreans learning English here, foreign retirees, Cebu’s warmer climate, surge of overseas remittances and increased purchasing power.
OFW remittances went up by seven percent to $16.534 billion in the first 10 months of the year from $15.456 billion in the same period last year, according to the Bangko Sentral ng Pilipinas.
Attractive financing schemes also boosted the housing sector.
According to Rizal Commercial Banking Corp. first senior vice president and RBG deputy group head for VisMin sales Prudencio Gesta, lending activities this year increased because of the low interest environment. Car and home loans are also on the rise.
The Pag-ibig Cebu branch, meanwhile, reported releasing P688 million as of November this year to finance the home loan applications of 776 borrowers. Pag-ibig estimated 70 percent of these home loans are for house and lot; 15 percent for lot only, and five percent for condominiums.
“Generally, 2011 is a bullish year for property developments,” Fritzche said.
Innoland Development Corp., meanwhile, topped off its flagship mixed-used project Calyx Centre in the Cebu IT Park. The company also announced it will build Calyx Residences, a residential condominium project at Cebu Business Park and The Link, an office-space building also at Cebu IT Park.
Taft Property Venture Development Corp., meanwhile, broke ground last November for its first condominium project, Horizons 101, which will have a total of 1,468 units.
Taft Property chief operating officer Manuel Colayco said Cebu has an unserved requirement of 167,000 units for the middle income category for house units with prices ranging from P1.25 million to P3 million.
Maria Luisa Properties, on the other hand, recently announced its latest premier development, The Heritage, in Mandaue City.
Big players like Ayala Land Inc. and AboitizLand Inc. also unveiled their latest projects in Cebu like Alveo Land’s Solinea and AboitizLand’s Hanaya.
Monera said tourism is a key factor in the continued growth of Cebu’s real estate industry.
“In the past few years, the entry of foreign tourists, businessmen, returnees and local travelers amplified the range of hotel accommodation in the city, which now varies from boutique and businessmen’s hotels, leisure-oriented resorts, five-star luxury hotels and casinos to travelers’ inns,” he said.
Hotel rooms
Monera said Cebu has more than 30 established hotels or some 6,000 rooms that vary from economy to first class.
Developer Megaworld Corp. recently unveiled 8 Newtown Blvd., a condominium development in its 16-hectare The Mactan Newtown project in Cebu. The project is targeted at the retirees market.
“Similar to Hawaiian islands such as Honolulu and Maui, Cebu boasts both natural wonders and urban conveniences, which are appealing to retirees,” said Philippine Retirement Authority (PRA) general manager Veredigno Atienza.
Megaworld inked a partnership with the PRA to facilitate Special Resident Retiree’s Visa (SSRV) applications of qualified foreign clients through their investment with 8 Newtown Blvd.
The firm said construction is also under way for One World Center, a five-level office building designed to serve the needs of top firms in the BPO and IT industries at The Mactan Newtown.
Monera, meanwhile, said plans are underway to start construction of a BPO building within Cebu Business Park as well as the third sequel to the eBloc Tower within Cebu IT Park.
He said that with the success of 1016 Residences, Ayala Land Premier is also set to launch another residential condominium within Cebu Business Park. Avida, on the other hand, also plans to launch a third tower by next year.
Fritzche also said more developers will offer a resort feel and low-rise condominium developments. She said more projects will gear toward the “work-live-play” concept for the young professionals market.
Challenges
When asked about potential challenges in 2012, Fritzche mentioned the lack of support infrastructure and worsening traffic problem as some of the factors that might hamper growth.
“The challenge would be not in selling the development, but in convincing those investors to invest with us when we cannot sustain more buildings,” she said.
Meanwhile, the Philippine Allied Chamber of Real Estate Brokers and Licensed Salesman (PhilAcre) is also asking the government to come up with an effective promotional program to help them sell the Philippines as a vacation destination, especially that global property buyers are now slowly shifting their interest to Asia.
PhilAcre president Anthony Leuterio said international investors, largely Americans and Europeans, are now turning their attention to properties in Asia. He said bulk buying of condominium units is becoming a trend for global investors.
“If the Philippine Government will remain less supportive in promoting the Philippines as a long-term vacation destination like Hawaii, investors’ interest may be snatched by other Asian countries, which actively promote property investments,” Leuterio said.
Published in the Sun.Star Cebu newspaper on December 29, 2011.
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