CIPC: SRP management body underway

By Ehda M. Dagooc (The Freeman) Updated November 13, 2009 12:00 AM

CEBU, Philippines - South Road Properties (SRP) will soon install a Project Management Authority, and this idea is not new, as stressed by the Cebu Investments and Promotions Center (CIPC).

CIPC managing director Joel Mari S. Yu made this pronouncement following the statement made by opposition leaders Jonathan Guardo and Mary Ann de los Santos that SRP should be managed by an overseeing body like a management authority in order to have transparency in any transaction.

Yu said that the Mayor has already understood that the City-owned zone should have a project management agency, “We know that already, but it’s only a matter of time when the project management authority will be installed.”

CIPC is commissioned by the Cebu City government to promote the 300-hectare SRP, which is considered as the largest revenue generator of the City in the next few years, making Cebu City as the wealthiest LGU in the Philippines.

“It will come,” Yu said referring to the installment of a project management authority.

According to Guardo and de los Santos, a professional project management Authority should be installed in order for SRP to take off, and pursue transparent negotiations with investors, thereby contributing actual revenue to the City.

They said that because of the existing conflicts of the current Cebu City government with other Local Government Units (LGUs), the City has lost significant revenue generation.

SRP could have generated actual revenue for the City, if not of the current political conflict with other local government units (LGUs).

On the other hand, despite the unending controversies attacking the Cebu City developed South Road Properties (SRP), real estate giant Filinvest Land Inc. (FLI) has vowed to pursue with its P25 billion project at the area.

FLI vice president for the Visayas and Mindanao Tristan Las Marias earlier said that the company intends to break grounds at the SRP project early next year.

By year-end, FLI targets to finish the master-plan for the entire 40-hectare lot that is covered by its joint venture with the Cebu City government.

The multi-residential development, he said will give Cebu City another landmark that will have an international flavor, as well as attract the local investors.

Under the contract of the FLI-Cebu City joint venture, the development master plan for the property is to be approved by the City Council within 10 to 12 months after the contract signing last February.

He said Filinvest has commissioned the services of foreign consultants and international master planners for the development design.

“We want the development to have an international flavor to sell it not just locally but also internationally,” said Las Marias.

As of this point, FLI has not committed a name for the project yet, he said adding that as per the company’s commitment to the City Council, the development will be mainly multi-residential type with medium rise buildings, condominium units.

BPO sector keenly awaits Cebu's MBA hub outlook

By Ehda M. Dagooc (The Freeman) Updated November 16, 2009 12:00 AM

CEBU, Philippines - Business Process Outsourcing (BPO) industry players hope that Cebu will fast track its plan in positioning itself as MBA (Masters in Business Administration) hub in Southern Philippines, in order to attract higher level outsourcing investments.

Business Process Association of the Philippines (BPAP) former chairman, and chief executive officer (CEO) of Aegis PeopleSupport, applauded Cebu City Mayor Tomas Osmeña’s vision to make Cebu as “MBA Hub.”

According to Borja, the Mayor’s plan is seen to suit well the City’s bid to attract the new wave of outsourcing investments, which is the Knowledge Process Outsourcing (KPO), of which salary standard are much higher than the voice-outsourcing service like the call center.

Currently, investment banks in the US, and analysis jobs requirement in the Wall Street are being outsourced, and the Philippines has the capacity to capture this multi-million-dollar industry, as long as it has enough manpower pool.

Positioning Cebu as an MBA Hub, would well serve the City or the province’s bid in becoming the number one emerged outsourcing destination in the world, he said.

Earlier, Osmeña announced to BPO players here his plan to establish the first

University of the Philippines-MBA school designed solely for the call center agents or BPO workers, wherein schedule of classes will be adjusted depends on the convenience of the students.

“We will create brain-drain to the SRP,” Osmena said explaining that with the establishment of first UP-MBA school SRP will create a community of “bright” manpower pool to the SRP that will draw BPO investments to the area.

The Cebu City government will officially turnover a five-hectare property within SRP to the University of the Philippines-Cebu to establish the MBA school in the area. UP, on the other hand, is allowed to get industry partners to invest for the facility in the next three years.

The Mayor said that Cebu has recognized its weakness in providing good manpower supply to BPO investors, this is in the lack of middle-management or supervisory and managerial pool. Thus, the creation of the MBA school at SRP.

With this, Osmena said professionals will no longer consider call center agents as “dead-end” jobs, as it now provides after-work school “offering them a future”.

Meanwhile, an Australian investor expressed interest to partner with local institution to put an international MBA school in Cebu, to help arrest the problem of mid-management manpower pool that concerns Business Process Outsourcing (BPO) industry here.

Michael Burdette, chairman and director-finance for Tech Growth Solutions Cebu Inc., said that he currently on talks with local businessmen to venture an International MBA school here, so that Cebu will be able supply the much needed managers and supervisors for the BPO sector.

Burdette said he is willing to invest in a school facility that will also tap international MBA instructors in partnership with existing universities or colleges here.

“Cebu has huge potential for BPO investments, compared to other places in the Philippines, like Manila. Cebuanos are intelligent, hardworking, your tech sector is good,” he said stressing that establishment an immediate establishment of an international MBA school may further push up Cebu’s position as BPO investment magnet.

He said his investment here in Cebu, which provides backroom services for clients all over the world, is meant for long term, the reason why he is serious in working with local traders to fund or put up world-class MBA school here.

BPO sector keenly awaits Cebu's MBA hub outlook

By Ehda M. Dagooc (The Freeman) Updated November 16, 2009 12:00 AM

CEBU, Philippines - Business Process Outsourcing (BPO) industry players hope that Cebu will fast track its plan in positioning itself as MBA (Masters in Business Administration) hub in Southern Philippines, in order to attract higher level outsourcing investments.

Business Process Association of the Philippines (BPAP) former chairman, and chief executive officer (CEO) of Aegis PeopleSupport, applauded Cebu City Mayor Tomas Osmeña’s vision to make Cebu as “MBA Hub.”

According to Borja, the Mayor’s plan is seen to suit well the City’s bid to attract the new wave of outsourcing investments, which is the Knowledge Process Outsourcing (KPO), of which salary standard are much higher than the voice-outsourcing service like the call center.

Currently, investment banks in the US, and analysis jobs requirement in the Wall Street are being outsourced, and the Philippines has the capacity to capture this multi-million-dollar industry, as long as it has enough manpower pool.

Positioning Cebu as an MBA Hub, would well serve the City or the province’s bid in becoming the number one emerged outsourcing destination in the world, he said.

Earlier, Osmeña announced to BPO players here his plan to establish the first

University of the Philippines-MBA school designed solely for the call center agents or BPO workers, wherein schedule of classes will be adjusted depends on the convenience of the students.

“We will create brain-drain to the SRP,” Osmena said explaining that with the establishment of first UP-MBA school SRP will create a community of “bright” manpower pool to the SRP that will draw BPO investments to the area.

The Cebu City government will officially turnover a five-hectare property within SRP to the University of the Philippines-Cebu to establish the MBA school in the area. UP, on the other hand, is allowed to get industry partners to invest for the facility in the next three years.

The Mayor said that Cebu has recognized its weakness in providing good manpower supply to BPO investors, this is in the lack of middle-management or supervisory and managerial pool. Thus, the creation of the MBA school at SRP.

With this, Osmena said professionals will no longer consider call center agents as “dead-end” jobs, as it now provides after-work school “offering them a future”.

Meanwhile, an Australian investor expressed interest to partner with local institution to put an international MBA school in Cebu, to help arrest the problem of mid-management manpower pool that concerns Business Process Outsourcing (BPO) industry here.

Michael Burdette, chairman and director-finance for Tech Growth Solutions Cebu Inc., said that he currently on talks with local businessmen to venture an International MBA school here, so that Cebu will be able supply the much needed managers and supervisors for the BPO sector.

Burdette said he is willing to invest in a school facility that will also tap international MBA instructors in partnership with existing universities or colleges here.

“Cebu has huge potential for BPO investments, compared to other places in the Philippines, like Manila. Cebuanos are intelligent, hardworking, your tech sector is good,” he said stressing that establishment an immediate establishment of an international MBA school may further push up Cebu’s position as BPO investment magnet.

He said his investment here in Cebu, which provides backroom services for clients all over the world, is meant for long term, the reason why he is serious in working with local traders to fund or put up world-class MBA school here.

When Is a Real Estate Agent a REALTOR®?

A real estate agent is a REALTOR® when he or she becomes a member of the NATIONAL ASSOCIATION OF REALTORS®, The Voice for Real Estate®, the world's largest professional association. The term "REALTOR®" is a registered collective membership mark that identifies a real estate professional who is a member of the NATIONAL ASSOCIATION OF REALTORS® and abides by its strict Code of Ethics.

Founded in 1908, NAR has grown from its original nucleus of 120 members to more than 1 million today. NAR is composed of REALTORS® who are involved in residential and commercial real estate as brokers, salespeople, property managers, appraisers, counselors, and others who are engaged in all aspects of the real estate industry.

Members belong to one or more of 1,700 local associations/boards and 54 state and territory associations of REALTORS® and can join one of our many institutes, societies, and councils. Additionally, NAR offers members the opportunity to be active in our appraisal and international real estate specialty sections. REALTORS® are pledged to a strict Code of Ethics and Standards of Practice.

Working for America's property owners, the NATIONAL ASSOCIATION OF REALTORS® provides a facility for professional development, research, and exchange of information among its members.

Check out the Public Awareness Campaign television and radio spots that encourage consumers to rely on the expertise and integrity of REALTORS®.

The NAR advertising campaign runs February through November on network and cable television and network and satellite radio, helping consumers understand the real value of working with REALTORS®. From their voluntary adherence to a Code of Ethics to their incomparable knowledge of real estate processes, REALTORS® are the experts of residential and commercial property transactions.

Analysis of Stock Market vs Real Estate Investing

Have you ever wondered, how does investing in stock market compares with real estate investment? Well they both have their merits and demerits and are suitable for different sections of people.

While stock market is accessible to mass retail investors and is far more liquid, real estate investment requires more upfront commitment and may not be liquidated that easily.

Stock investing and real estate investing have the same basic financial objectives. People invest money in both to make money from growth and/or income. Growth through price appreciation (increase in value or market price) is where you really make the big bucks.

Here we have tried to compare these investment options from a very objective perspective and have considered both these avenues from pure investment vehicles.

For simplicity, we have assumed that both stock and real estate investment grow at same rate of 10 percent per annum. Further, same amount of investment at same periodicity is considered in both the options. The time horizon for investments to mature is taken to be 5 years.

Suppose you decide to buy a real estate house valued at 50 lacs by taking maximum i.e. 85 percent financing. This means you put 7.50 lacs as down payment and rest spread out as equated monthly installments at 9% reducing rate of interest for a period of 15 years, which comes out to be Rs. 43,106 per month. Further an additional Rs. 385,000 would be required for covering registration of your house property and loan processing costs. An additional cost of maintenance of house property at the rate of 1 per cent per annum of the value of the house is considered.

You on the other hand invest the same amount of Rs. 7.50 lacs in stock market index fund i.e. 7.50 lacs starting investment and a regular investment of Rs. 43,106 per month during the investment period.

After acquiring your house property, you decide to rent it out at prevailing annual market rent of 2 to 3 percent of the property value to start the income stream. Although you can get dividends in stock investments, we have kept it out of consideration as dividend rates and assurance of dividends are not guaranteed. Further, dividends are paid out on the face value of the stock rather than on the market value of single share of that stock.

At the end of 5 years, you decide to sell off your investment in both these asset classes. The net value in real estate investment means the realized value after repaying the balance loan amount.

Stock Investing vs. Real Estate Investing

Let’s compare the profitability of these investment options.

Year	Invested Amount	Stock Investment	Real Estate Investment
		Net Value	Net Value	Income	Costs
Year 1	1,267,276	1,370,190	1,414,042	156,000	438,250
Year 2	517,276	2,055,323	2,146,086	168,000	59,000
Year 3	517,276	2,812,197	2,953,109	186,000	65,000
Year 4	517,276	3,648,327	3,842,805	210,000	71,667
Year 5	517,276	4,572,010	4,823,658	234,000	79,083
Total Value	3,336,380	4,572,010	4,823,658	954,000	713,000

Particulars	Stock Market	Real Estate
Total Investment (Amount Invested + Costs)	3,336,380	4,049,380
Total Amount Realized (net value + Income)	4,572,010	5,777,658
Return	37.04%	42.68%

Stock investing: The stock investment would generate a return of 37.04 percent in 5 years. Over the long term the stock market provide a return close to 10 percent plus per year. In this example our assumed growth rate was 10 percent per annum, plain and simple.

Real estate investing: The real estate investment yielded a return of 42.68 percent in 5 years. You may however decide, not to rent out your property but in such case your returns may also drop considerably as the costs involved in maintaining the property will have to be borne by you as out of pocket expense. Although, we have assumed a 10 percent per annum growth in property prices, however, real estate has shown far greater appreciations in the past. Investments in property is considered a safer bet when it comes to investing as you are investing in a “real” asset.

Investment Liquidity

Most important differences in these two investment options is liquidity. Selling a property can be costly and time consuming. On the other hand, stocks offer high liquidity, meaning that you can sell a stock investment quickly and easily with low costs.

This difference is critical, as you need to have a very high holding capacity in case you are not able to sell your real estate investment at the desired price.

Further, Real estate properties require active management, and lack good liquidity as an investment. Although, active management is required if you are investing in individual stocks and have not invested in an Index fund (as in this example) or have taken the Mutual Fund route to invested in stock market.

Awareness is the key to maximize returns

You and I both know that when you invest money to make money your success really depends on how well you know and play the game, no matter what arena you invest money in. For example, if you are good at selecting, improving, managing and financing real estate properties you can do much better than the above example.

You can also make over 10 percent a year in stock investing if you know how to invest in the stock market. The problem for most of us is that we don’t know how to invest in stocks, we are uninformed. Hence, stock investing for most of us is a risky business.

On the other hand, traditionally many of us are comfortable with real estate investing because we are more familiar with real estate market (we see it every day and better understand the factors that affect the real estate prices around us). Real estate properties have historically gone up in value without many violent downswings. The stock market usually experiences a greater degree of volatility.