Additional supply to boost Cebu office market by H2
Unlike before, Filipinos have embraced generic drugs much more nowadays at a time when prices of almost all basic necessities have been soaring.
Generika Drugstore, for one, is seeing this demand to continue particularly in Cebu.
“Cebu is a good market for us. We're doing good here,” Peewee de Vera, national operations head, told The FREEMAN in an interview over the weekend.
He said that generic drugs have been accepted by more Filipino consumers already unlike some 15 years ago.
Years back, generic medicine was perceived to be low-class quality and inferior compared to the pricey “branded” medicines that consumers have been accustomed to.
“The industry has seen a growth of at least 40% year on year. Filipinos little by little have accepted generic medicine due to economic reasons like prices of goods have been increasing,” de Vera said.
He noted that consumers buying generic drugs can save as much as 85%.
“As the reception to generic medicine among our countrymen increases, we continue to see positive growth,” he said.
To date, the Ayala-led drugstore now has over 750 stores nationwide, of which 118 are in Visayas and at least 40 branches are in Cebu.
In July 2015, Ayala Corp's subsidiary AC Health acquired the 50% stake in Generika owned by the family of Julien Bello.
Generika started in 2003 and was one of the first to engage in the retail distribution of affordable generic medicine.
Generic drugstores which have mushroomed in Philippines in recent years have changed the game in the retail pharmaceutical industry as they compete with well-known pharmaceutical manufacturers.
Aside from Generika, Ayala's healthcare business also includes FamilyDOC, a chain of community-based primary care clinics. AC Health is also investing in health technology through its HealthTech arm, Vigos and MedGrocer, an FDAlicensed online pharmacy.
“Our partnership with Generika is a key pillar in our vision to provide accessible, affordable, and quality healthcare to a greater number of Filipinos,” Ayala Corp president Fernando Zobel de Ayala said.
“With Generika, we have an established retail health footprint that serves as the first point of care in the community. With this, we see the enormous potential for Generika to become an enabler of preventive health and wellness,” he added.
Cebu's office market is expected to get additional supply in the second half of this year amid the rising demand from both outsourcing and traditional tenants.
For the second half, international realtor Colliers International sees the delivery of nearly 30,000 sq m of new leasable office space. Megaworld is set to complete its Pacific World Tower while Premiere Diamond Developers is due to deliver its HM Tower within the period.
Cebu's office stock reached 960,000 sq m of gross leasable area (GLA) as of end-2017. The figure is four times larger than Metro Cebu's stock 10 years ago.
As of second quarter 2018, Metro Cebu's office stock reached 1.01 million sq m following the completion of three new buildings – Mabuhay Tower 1 and Filinvest Cebu Cyberzone Tower 2 in Cebu IT Park and Tech Tower in Cebu Business Park.
The new towers were developed by Filinvest Land, Enrison, and Cebu Holdings. The three buildings delivered a combined 53,000 sq m of new leasable office space. Colliers sees Cebu's office stock reaching 1.04 million sq m before end-2018. This is more than double Metro Cebu's office stock in 2011.
Both national and local developers are cashing in on the rising demand from both outsourcing and non-outsourcing tenants.
The Canadian real estate consulting firm expects Cebu Business Park and IT Park to continue to command the highest lease rates across Metro Cebu.
In second quarter, Cebu IT Park recorded the fastest rise in office lease rates – at 11% to 13%.
"We project average lease rates in these sub-markets to grow between 3% and 5% annually from 2019 to 2021. We still see upward pressure in rent given the strong demand in these sub-locations. Lease rates in other districts should grow at a more conservative 2% to 3% per annum from 2019 to 2021," the company said.
“Overall, Colliers believes that Metro Cebu's competitiveness as a desired BPO investment hub will be sustained as it serves as the gateway to the Visayas Islands. This is complemented by the completion of the new terminal of Mactan-Cebu International Airport. Aside from being a manufacturing base, its economy is being propelled by the BPO industry. Both sectors are major contributors to office space take up in Metro Cebu,” said Dom Fredrick Andaya, the company's office services director.
“Expatriates also prefer Cebu because of its beach resorts and other tourist destinations. Lastly, Metro Cebu has been enticing foreign and local investors as businessmen continue to enjoy the comforts of an urban landscape balanced with natural attractions,” Andaya stressed.