'TOURISM, MASSIVE INFRA DEVELOPMENT KEEP CEBU'S REAL ESTATE ROBUST'
Cebu is expected to have this much office space available by 2020, says real estate service provider Santos Knight Frank
Real estate service provider Santos Knight Frank says Cebu will continue to enjoy gains in the property sector.
Cebu is well on its way to becoming a global city. The Metro Cebu real estate market recorded an upbeat performance across all sectors, showing no signs of slowing down.
RICK SANTOS
Growth in Cebu’s real estate property shows no sign of slowing down.
Manila-based real estate service provider Santos Knight Frank expects Cebu will continue to enjoy gains in the property sector on the back of its strong local economy, thriving tourism, abundant labor pool, and new infrastructure projects.
“Cebu is well on its way to becoming a global city. The Metro Cebu real estate market recorded an upbeat performance across all sectors, showing no signs of slowing down,” said Rick Santos, chairman and chief executive of Santos Knight Frank, during a press conference in Radisson Blu Cebu yesterday.
The group cited the accelerated progress in Cebu’s office space, which remains driven by the business process management (BPM) industry.
“The BPM industry will continue to drive office space takeup with large commitments from IT and BPM companies,” said Santos.
He noted that the additional come-on for investors to locate their businesses to Cebu is the opening of the Terminal 2 of Mactan Cebu International Airport, which is seen to increase tourism and facilitate greater inflow of capital, on top of other infrastructure projects.
Joey Radovan, vice chairman and head of occupier services and commercial agency at Santos Knight Frank, said Cebu will not have problems in terms of office supply.
In fact, he said that by 2020, the greater Cebu districts will have close to one million square meters of total space serving the office market.
Around 350,000 square meters of additional office space is set to open from 2018 to 2020, said Radovan. This represents 47 percent growth in Cebu’s current office supply.
“The IT-BPM industry will continue to drive commercial demand and traditional office operations will have the opportunity to upgrade to new, modern buildings for their front office needs,” he said.
Moreover, Radovan cited the province’s captive labor pool and young demographics as some of the key factors that will convince foreign investors to expand their operations in Cebu, on top of the competitive office lease rates.
According to Santos Knight Frank, weighted average asking lease rates increased by about two percent to P548.31 per square meter during first half of 2018, from P536.96 in second half of 2017.
Done deals tracked by the company were recorded with transacted rental rates of P600 to P650 per square meter, a nine percent increase from last year’s transacted rents.
Meanwhile, office capital values typically range from P150,000 to 200,000 per square meter.
Besides the continued investments in the BPM industry, another opportunity in the office market is the surge of offshore gaming.
Santos said foreign investors such as the Chinese are looking into Cebu as a top alternative destination.
Idyll Ann Lacson, director at Santos Knight Frank-Cebu, said they have helped facilitate the transaction with Chinese investors who took an entire building for offshore gaming and residential to house their agents at a prime property in Mactan.