Santos Knight Frank Updates on Metro Cebu Real Estate Market

To disclose the most recent findings on Metro Cebu’s real estate market, renowned real estate services company Santos Knight Frank held an exclusive media roundtable at Radisson Blu Cebu yesterday.

Santos Knight Frank Chairman and Chief Executive Officer Rick Santos opened that, “With a strong economy, large pool of talent, and new infrastructure in place, Cebu is extremely well on its way to being a topnotch global city.”

He, along with Vice Chairman and Head of Occupier Services & Commercial Agency Joey Radovan, MCR, Associate Director of Investment & Capital Markets Kash Salvador, and Director of Occupier Services & Commercial Agency Idyll Ann M. Lacson, discussed the latest findings on real estate.

Secure Office Market

With regards to the office market, Metro Cebu’s weighted average lease rate rose by 2.11 percent from 536.96 PHP last year to 548.31 PHP this year. Overall vacancy rate dropped from 10.69 percent last year to 8.31 percent this year as well, whereas Metro Manila in average has a vacancy rate between 4 to 6 percent depending on city. Occupancy rating also shows desirable results with a whopping 91.69 percent.

Cebu Business Park and Cebu IT Park continue to be the most popular in the office market. For office supply in the metro, there is no issue as it is typically driven by robust BPO demand. In fact, approximately 350,000 square meters of additional office supply is expected to manifest within three years.

Residential Demands

Because of the traffic problem, demand for residences is growing by the numbers and is generally found in the city center where workplaces are more accessible. South Korean, Japanese, and Chinese buyers are also reported to purchase condominium units in bulk.

The average take-up in the residential real estate market is 9 units per month, with the quickest selling projects being Mandani Bay Quay Tower – 1, J Tower Residences,and Avida Towers Riala – Tower 4. In 2018 alone, 145 projects were marketed. The affordable sector stood at 10 percent, mid-end by 60 percent, and high-end by 30 percent.

Additionally, Cebu City, Mandaue, and Lapu-Lapu have favorable absorption rates with 91.2 percent, 73 percent, and 92.9 percent, respectively. Overall absorption rate totaled to almost 90 percent.

Booming Tourism Market

For both the years 2016 and 2017, Korea, Japan, and China remain as the top 3 markets in Cebu with 41.24 percent, 20,09 percent, and 10.4 percent of foreign arrivals in 2017 respectively. The three are followed by USA, Australia, Taiwan, United Kingdom, Germany, Canada, Singapore, and others with foreign arrivals ranging between 1.33 to 9.06 percent.

Cebu developers forged partnerships with international hotel operators to sufficiently accommodate the surge of tourists. Among the partnerships made were Sheraton with AppleOne Mactan, Dusit Princess Cebu with Grand Land, Inc., Dusit Thani Mactan Cebu with Robinsons Land Corporation, and Citadines Cebu City and Iyf Cebu City with Cebu Landmasters.

Considering Cebu is also a potential gaming destination and may attract more arrivals for that reason, Metro Cebu designed integrated resort projects such as the Emerald Resort and Casino of Udenna Development Corp. in Lapu-Lapu City, and the Isla Dela Victoria of Universal Hotels and Resorts, Inc. in South Road Properties.

Noteworthy Projects

According to Rick Santos, you can’t stay static. Thus, projects and developments are ongoing or in-the-works to keep Cebu bustling and growing. Among these are the infrastructure developments of Cebu-Cordova Link Expressway, Cebu-Bohol Link Bridge, Cebu-Negros Link Bridge, and New Cebu International Container Port.

Projects such as Mactan Newtown, City Di Mare, Taft East Gate, Central Bloc, Mandani Bay, Gatewalk Central, and Montage are also to be expected in the near future.

More than that, there are new growth areas in the region as well: Bacolod and Iloilo, as the two exhibit growing commercial and development projects.

Things are certainly looking up. Cebu wields a longer trajectory of growth and is one of the leading investment destinations in the country. As Santos said, “now is the perfect time to invest in Metro Cebu.”