Developer focuses on middle-range market

By Rhia de Pablo Updated April 02, 2009 12:00 AM

CEBU, Philippines - Since not a lot of developers are concentrating on the middle-range real estate market, Nexus Real Estate Corporation is targeting this specific segment looking at it as a growth area in Cebu’s continually thriving real estate industry.

In an interview with Shanna Louise T. Lopez, Nexus Real Estate Corporation’s vice president for operations, she said that since owning a house is still a basic necessity, they have not yet notice a decline of their sales despite the economic recession.

“We can say that our operation has not been affected with the crisis because so far we still do well in terms of sales. A house is still a basic need and people will always find their own place to stay,” said Lopez.

She said that they have noted that the market prefers pocket developments so they saw a huge market for middle-cost housing.

Currently, Nexus Real Estate Corp. is marketing its Kamalaya Residences in Tunghaan, Minglanilla which will have an open house this month after model houses have been constructed.

The project is 30 percent sold and is composed of 31 units for its phase one and 80 units for its phase two.

This May, Nexus will already start the construction of its Villagio de Dolce Vita project, another middle-cost housing project which will have 300 units.

Lopez said that they are currently pursuing middle-cost housing projects because they see immense growth potential in this market segment especially in these times of global recession.

She said that their units range from P1.5 million to three million pesos specifically catering to the middle-end sector.

She revealed that due to the anticipated economic slowdown, they have decided to put on hold their high-end development called Coral Point in Mandaue with units that would range from six million to eight million pesos.

“There is definitely a market for middle cost projects especially ready for occupancy units. We also do not feel much competition in this segment because not a lot developers venture into it so we see this as a big market. As a developer, we do not want to go low as we want to keep our quality and standard,” said Lopez.

To caution their company against the positive negative impacts of the economic recession, they have started to keep their costs down although they still use high quality materials making their houses look high end but at a mid-range price, she added.

Lopez said that the phase of take-outs is still almost the same as last year’s so they still did not see a direct effect of the crisis to their business.

She said that the profile of their market is concentrated 80 to 90 percent on overseas Filipino workers and their families.

“We were lucky to get the OFW markets that were not affected by the displacements abroad so our sales have not been affected. Here in Cebu, the market is still there and there is still no slowdown,” she said.

She said that as an area for development, Cebu still have more rooms for growth because its real estate market is still far from congestion.

The continues viability of Cebu as an area is the reason why Nexus continue to be bullish in doing real estate developments in the area, in fact, Lopez revealed future plans to do a resort development in Bantayan but this will take off after another five years when the economy is already stable.

The company is also eyeing to venture into developing retirement homes as well as do more housing projects in Minglanilla as well as other areas in Cebu province.