Firm notes high potential for industrial properties in Cebu

THE industrial market holds the biggest potential in Cebu’s property business as demand goes up, yet the present supply continues to be limited.

The analysis came from Pinnacle Real Estate Consulting Services, Inc. in a Cebu market report presented to local property stakeholders last Tuesday while announcing the opening of its first Cebu office at the VCFI Building along Archbishop Reyes Ave. in Cebu City.

“The Metro Cebu industrial market is very healthy. In fact, the industrial zones in Metro Cebu were filled up more than four years ago, well ahead of their counterparts in Luzon,” the Pinnacle report reads.

At present, Metro Cebu has 27 IT Parks or IT Centers, seven manufacturing zones, two tourism economic zones, and one agro-industrial economic zone. This translates to an estimated 120 hectares of economic zones.

However, there seems to be a scarcity of industrial properties in Cebu as key cities are mostly concentrated in residential and commercial spaces.

Pinnacle said there are less than three hectares of industrial space currently available for lease. Estimated occupancy of industrial spaces in Metro Cebu is at a high 97.5 percent.

The property consulting company, whose services range from brokerage, asset management, and property management, said it welcomes the development of a 50-hectare light industrial park in a reclaimed area in the town of Minglanilla, a joint venture between the local government and Mingmori Development Corp.

A revival of the country’s manufacturing sector is being eyed as the rising cost of manufacturing in China and concerns on intellectual capital protection are discouraging some firms from operating there.

Ayala Corp. chairman and chief executiive officer Jaime Augusto Zobel de Ayala was quoted in recent reports during the Philippine Manufacturing Summit 2016 yesterday that the Philippines can take advantage of “highvalue manufacturing” in Southeast Asia, given the country’s healthy econom- ic fundamentals.

But while the industrial property market holds the biggest potential for growth, Pinnacle director for research and consulting Jojo Romarx Salas said the dynamism of the Cebu office market, whcih has been heavily driven by the BPO industry, cannot be disregarded.

By the end of 2016, Pinnacle said there will be close to 900,000 square meters of Grade A office spaces in Metro Cebu. This is a growth of about 50 percent in the past four years, or an annual average growth of 12 percent.

“Four years before that, from 2009 to 2013, the average growth was 15 percent. While the growth is slightly lower, it reflects the maturing market and the Philippine office market in general,” the company said.

In terms of vacancy, the Cebu office market registers a 17 percent vacancy rate due to the increasing office stock.

In 2014 and 2015, office space vacancy rates in Metro Cebu ran at 7.9 percent and 11.5 percent, respectively.