Year 2008 turned out to be the “best year” for Cebu’s real estate industry with both local and international investors eyeing Cebu for their project expansions.
Giant developers like Ayala Land Inc. (ALI), Filinvest Land, Robinsons Land, Aboitiz Land, SM Prime Holdings, Landco, Sta. Lucia, among others announced their strong interest to expand their respective land banks in Cebu to pursue bigger projects here, aside from their ongoing residential and commercial developments.
The dynamic tourism and Information and Technology sectors aligned with the growing interest of global Pinoys to invest their hard-earned cash in the Philippines, especially Cebu, buoyed the sales performance of residential projects such as condominiums.
One of Cebu’s biggest real estate developers, Land Asia Development Corporation revealed that Cebu’s real estate industry is experiencing a "real rebound" unfazed by the global recession.
Land Asia president Mariss Inting said like 10 years ago, after the regional economic crisis in 1997, Cebu likewise gained real estate rebound with local tourism hotspots gaining interest from the international market.
Inting said demand for seaside residential units has never skyrocketed as fast as this year, thus giving developers the cue to look for idle properties for development near the beaches or mountain side properties.
Cebu Holdings Inc (CHI), the developer of Amara reported a surprising sales performance this year, as the luxurious residential project has become one of the investment channels for wealthy Cebuanos.
Tetta Baad, head of the Real Estate Development Group for CHI, said that some consumers are now looking for good investment channels for their money, as some financial institutions, and giant investment firms are experiencing turbulent times.
Surprisingly, while other residential projects are banking on the foreign-funded sales, Amara is getting 67 percent of its total sales profile from the locally-generated funds, from businessmen.
Belt tightening measures, generally adopted by global consumers, has not affected the formal introduction of the limited lots available in this prime location in Amara North, off the northern part of Cebu, in Lilo-an.
The real estate industry in Cebu, is "somehow" gaining an advantage, while "moneyed" individuals are looking for good "real estate" investments that could provide good returns for their money.
"Real estate [investments] provides wealthy people a more secured place for their money, as real estate are one of the safest investment instruments," said CHI president and chief executive officer (CEO) Francis O. Monera
In fact, he revealed that 36 percent of Amara buyers are paying in "spot cash", which indicates that "people have money."
Based on a CHI study, only 33 percent of the Amara lot sales were from foreign funds. These are usually Filipino immigrants and professionals who are deciding to invest on good properties back home.
CHI put in a good amount of investments in other real estate projects in Cebu, including the building of Business Process Outsourcing (BPO) project at the Asia Town IT Park, to accommodate the robust demand for office space in the city.
Residential and commercial developer AboitizLand Inc. spent P2.3 billion in real estate projects for Cebu this year, providing new residential and commercial facilities, amid the projected slowdown of consumer spending.
AboitizLand Inc., president and chief operating officer (COO) Andoni F. Aboitiz said that the largest capital expenditure the company has made was the development of its Urban Village development called "Persimmon", of which P2 billion will be spent for the full completion of the project.
The company started to construct a Business Process Outsourcing (BPO) building at the Mactan Export Zone (MEZ-2) called iMEZ, that would incur at least P160 million for the building construction alone.
The five-story building is projected to be completed by next year.
Also, AboitizLand will open its phase-2 development of the zen-inspired chic residential project in the Southern part of Metro Cebu called Kishanta with a total investment of P150 million for the horizontal development of Kishanta subdivision expansion.
"There is always a need for housing, although interest rate is seen to creep up due to the double-digit inflation and high fuel prices. But we would rather continue on our project stream, rather than always waiting for the [perfect] timing," Aboitiz said.
The threat of consumer budget tightening has not discouraged the AboitizLand's expansion mode, hoping that this economic challenge could only last for short term. F3 Properties Inc., a company that had been focusing on its furniture export business has decided to take advantage of the fertile real estate sector in Cebu, through the opening of San Fermin Place, a P200 million seaside residential project in Mactan.
F3 Properties managing director Peri S. Villarta said that it is ripe time to offer good real estate projects, especially those who want to invest their money outside of banks and other investment channels.
"Real estate [investments] is going to be there forever. There might be risks in the real property investment, but it is still considered as one of the safest investments," she said.
This is the first time that the company entered into the real estate business, diversifying its focus from furniture exporting. Although, the Cebuano-owned F3 Holdings still maintains a furniture manufacturing plant in China.
The San Fermin Place is situated on a 2.2 hectare property in Maribago, Mactan. It offers 14 available lots and 21 townhouses. This year also, Robinson's Land Corporation (RLC) announced its interest to expand its land bank in Cebu, to further take advantage of the province's dynamic real estate sector in both commercial and residential segments.
Meanwhile, RLC, the real estate development arm of conglomerate JG Summit Holdings Inc., started its real estate project activities in Cebu with several development projects launched, including the five-hectare condotel project called Amisa in Mactan, the
Business Process Outsourcing (BPO) building called Cybergate Cebu in Fuente Osmeña, and its recent acquisition of government-owned property at the North Reclamation Area (NRA).
G Summit Holdings Inc., president and chief operating officer (COO) Lance Gokongwei said that the company is looking at expanding its land bank in Cebu to prepare for more projects in the next few years.
The company recently acquired a 4-hectare property at the NRA, near the old White Gold Department Store, and is currently drawing up plans to develop the property for mixed use development, Gokongwei said.
He said the four-hectare land will have a hotel, commercial complex, residential units, and office buildings.
The young Gokongwei, who is now in-charge of the conglomerate's operation built by his Cebuano father John Gokongwei, said that Cebu offers huge opportunity for the group's several business arms, specifically retail, real estate and airline operations.
Although he did not divulge any specific preference of the companies property interest in terms of location, Gokongwei said the company is on constant lookout for opportunities to purchase or buy good real estate properties in Cebu, to add up to its existing land bank.
So far, the RLC's biggest investment venture in Cebu is the construction of the five-star resort and condotel coastline project called AmiSa in Mactan.
Reportedly, the Gokongwei group expressed interest to buy a property at the South Road Property (SRP).
More pocket-sized commercial projects were also introduced this year in Cebu, such as the first real estate venture of RobinLand Inc. with the building of its cyber RobinLand Business Center (RBC).
Food manufacturing and agri-business traders also took advantage of real estate trade in developing a five-hectare property as another Information Technology (IT) Park in Cebu.
"This is our first venture into the real estate business involving the IT industry. It's a good move to diversify our business," said Albert Go, who partly owns Qimonda Holdings Inc. (QHI), which is now starting an IT Park development at the Don Sergio Osmeña Boulevard, North Reclamation Area (NRA).
Go said the company is now fast tracking its construction of the Qimonda IT Center, which will transform the family-owned property into a commercial area. The project will cost an initial investment of P500 million.
Property- management firm Colliers International observed that while there were lots of property projects launched this year, or broke ground this year, developers have continually pursued their active land banking pursuits.
"Developers have continued to make their "land banking" in preparation for the global economic recovery," said Colliers International general manager for Cebu Rodulfo Lafradez.
As of end of 2007, there were a total of 181,257 square meters of office spaces in Cebu province. During this period five office buildings completed, adding of 30,924 square-meters to the Cebu office stock.
In the first quarter of 2008, this number has increased to 198,466 square meters of the space courtesy of the opening of Cebu IT Tower in Cebu Business Park.
Based on the market overview released by CB Richard Ellis, a property management company, it observed that the Metro Cebu residential market remained generally healthy despite the current economic crisis.
The motivation to own a house continues to be sustained by the local market, which is partly driven by the increased spending capability of a number of local residents as a result of the growing BPO industry and the continuous remittances from the Overseas Filipino Workers (OFWs).
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