RESEARCH

METRO CEBU REAL ESTATE SECTOR REVIEW

METRO CEBUMARKET UPDATE 2H 2016

METRO CEBU CONTINUES TO BE THE LARGEST AND MOST PROGRESSIVE URBAN CENTER OUTSIDE NCRMetro Cebu remains to be one of the most vibrant economic hubs in the Philippines. In the NationalCompetitive Council’s 2016 Cities & Municipalities Competitive Index, Cebu City placed 5th among thecountry’s highly urbanized cities in terms of economic dynamism. In the same way, the cities of Lapu-Lapuand Mandaue both made it to the top 30 of the said index. The remarkable economic growth exhibited bythe various cities and municipalities of Metropolitan Cebu makes the area an attractive target for diverse realestate investments.

The Philippines is already regardedas a location of choice by the globalBusiness Process Outsourcing(BPO) industry. In the country,Metro Cebu is considered as the2nd prime BPO destination next toMetro Manila given its dynamiccompatibility with the westernculture and fluency in the Englishlanguage. In Cebu, while Filipino iscommonly understood and spoken,English is the language that iswidely used in businesstransactions and education.

Latest reports show that Cebu hadat least 200 BPO companies withabout 120 thousand employees inthe end of 2015. Given the 18%annual growth forecasted byindustry experts, at least 20,000new jobs would have beengenerated in 2016.

In the recent years, BPO companiesstarted shifting requirements fromcall center jobs to functionsdemanding skills in finance andaccounting, health management,network services and infrastructureservices and other roles includingbut not limited to customer service,medical transcription, sharedfinancial services, offshore legaltranscriptions, software animationand development. As a result, theneed for registered nurses, foreignlanguage speakers, informationtechnology experts and digitalmanagers has intensified. Thesizable talent pool in Metro Cebuservices the growing demand for

cheaper yet high value labor. MetroCebu’s present labor cost isabout 30% lower than NCR rates.

Metro Cebu is home to severalhighly regarded universities andeducational institutions such asUniversity of San Carlos, Universityof San Jose-Recoletos, University ofthe Philippines Cebu and CebuNormal University. These renownedschools produce graduates withmore complex work skills andcreate a competent workforcedesired and sought after by thecontinuously flourishing BusinessProcess Outsourcing industry.

In 2015, a total of 48,730 studentsgraduated from the StateUniversities and Colleges, LocalUniversities and Colleges, OtherGovernment Schools and PrivateUniversities and Colleges in theCentral Visayas Region. In 2016,the Commission on HigherEducation (CHED) estimated56,740 fresh graduates from thesame region. At the current rate,there will be around 66,000 Region7 graduates this 2017. Ceburepresents approximately ¾ of thegraduates in Region 7. Therefore,there will be around 50,000 newgraduates from Cebu seekingemployment in 2017.

With the Philippine BPO sectorgrowing at an average of 46% perannum, the Metro Cebu officemarket remains robust and showspotential of further growth that is

2

SNAPSHOTS

Economic Indicators

6.8%

3.3%

5.1%

5.7%

1.6%

49.11

GDP 2016

Inflation Rate December 2016

OFW Remittances2016

Ave. Bank LendingDecember 2016

91-Day T-BillDecember 2016

Ave. PHP-USDQ4 2016

3

parallel to the overall performanceof the BPO industry in the country.

Driven by the strong local BPOindustry, the continuous boom ofthe Cebu office sector triggers theupsurge of demand for decentresidential properties. This resultedto the fast appreciation of propertyvalues in the area.

As Metro Cebu draws more andmore tourist, investors andmigrators, consumer spendingcorrespondingly increasesbenefiting the retail sector. Touristarrivals in Cebu reached 3.22 millionin the first 10 months of 2016.Metro Cebu’s city attractions,culture and heritage nominate it asa top tourist go to place in thecountry.

In addition, the population of Ceburises by approximately 60,000 everyyear. Hence, it is reasonable toanticipate additional money to becirculating within the Metro Cebuarea in the coming periods.Moreover, Household FinalConsumption Expenditure growthwas recorded at 7.3% in the first 3quarters of the year compared to6.1% in the same period last year.

FIGURE 1Highly Urbanized Cities Ranking in Terms of Economic Dynamism

Source: National Competitiveness Council Philippines

0

5

10

15

20

25

1 2 3 4 5 6 7 8 9 10

Mak

ati

Pas

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Man

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Ceb

u

Man

dalu

yong

Par

anaq

ue

Dav

ao

Cal

ooca

n

Gen

eral

S

anto

s

Sco

re

Rank

Improved employment conditionsresulting from increasing BPOcareer opportunities is perceived asthe major factor strengtheninggrowth in household consumption.

The industrial and hospitalitysectors similarly experiencedgrowth together with the other realestate sectors due to Metro Cebu’soverall desirability emerging from itsculture of professionalism andcraftsmanship, vast highly skilledmanpower resource, fair weather,relative peace and business-friendlyatmosphere.

Source: Philippine Daily Inquirer

Cebu City Skyline

ENTRY OF GLOBAL BRANDS RESHAPING THE CEBU OFFICE MARKET

4

Office | Office supply coping-up with demand

The Cebu office sector is furtherexpanding as global brandscontinue to inject multi-billion pesoworth of investments in the realestate market of the city. The yearconcluded with new partnershipsfrom local developers andinternational companies sealingdeals to better transform the fertileland of Cebu to a world-class citylandscape.

Four Cebu-based developersventured into agreement withinternational firms developing officespaces and residential towers. TaftProperty Ventures DevelopmentCorporation and Cebu LandmastersInc. are two of the local developersin Metro Cebu who are expandingtheir office portfolio in the area. Thesaid developers have secured theirpartnership with Hong Kong Land,Inc. for Taft Properties, and TheAscott Limited, for CebuLandmaster Inc. In addition,Arthaland Corporation has awardedthe construction of its newlylaunched office building, CebuExchange, in Cebu IT Park to ChinaRailway Dongfang Group andKnusford Berhard of Malaysia.

Taft Properties and Hong KongLand will be developing 25 towersin its township project namedMandani Bay. The said project will

feature office, retail, and residentialtowers. The construction of theoffice building is set to start afterthe completion of the first 4residential towers.

Cebu Landmasters Inc. is presentlyconstructing its Base Line Centerproject which has 4 towers. Towerone is already under construction. Itwill feature commercial spaces onthe ground and 2nd floors whileoffice spaces will be located on the3rd to 8th floors. The office spaceswill cater to small, medium, andlarge scale businesses and will haveover 4,800 square meters of grossleasable area. Moreover, CitadinesCebu City which will be managedby The Ascott Limited as a condotelwill be situated on the 9th to 21st

floors.

With new developments in the city,the procurement of marketableoffice spaces in Metro Cebu hasbeen evident as sound businesssentiments continue to drive inmore investment prospects.Average selling price in Cebu IT

Park (CITP) is now at PhP 135,000to PhP 145,000 per square meter.

Cebu Exchange is currentlymarketing its units with a typical cutof 95 to 1,100 square meters.Supply of offices in fringe area isalso growing and sale of office unitsis an observable trend. Office unitsare currently selling in the Fringeareas at an average selling price ofPhP 104,000 to PhP 112,000 persquare meter.

Another remarkable indicator ofgrowth in the Cebu office market isthe vacancy rate of offices. MetroCebu’s overall vacancy improvedwith a decline of 5% from 16.36%of the previous half of the year.Cebu Business Park (CBP)significantly affected the downwardpull in the overall vacancy as itdeclined to 7.01%, which is half ofthe first six months of 2016. Thefast take-up of BPO officescontributed to the drop in thevacancy of CBP as it slid to 9.49%from the 20.14% of the first half ofthe year. Ayala Center Cebu (ACC)

Source: Santos Knight Frank Cebu Office

Source: Santos Knight Frank Research

FIGURE 2Development Pipeline (sq. m)

0

20,000

40,000

60,000

80,000

100,000

120,000

140,000

160,000

180,000

2017 2018 2019 2020

Cebu Business Park Cebu IT Park Fringe Area

Philam Life Corporate Center

5

Tower contributed the most in thelowering of vacancy rate in MetroCebu as its vacancy dipped from44.05% of 1H 2016 to 14.99% of2H 2016.

Other BPO offices in CBP that alsoshowed a decline in vacancyinclude Cebu IT Tower 1, Cebu ITTower 2, and FLB CorporateCenter. Lowering of asking ratesdirectly affected the vacancy dropas developers offered discounts tocall centers and business processoutsourcing (BPO) companies.Lease rates in CBP decreased toPhP 546.18 per square meter fromthe PhP 550.87 per square meter ofthe first semester. Traditional officerates remained flat. This, however,could not offset the slight drop inrental fee attributed to BPO offices.

More than 42,000 square meter ofgross leasable area is expected toadd to the CBP supply in 2017.One of the upcoming office projectsto look forward to is Philam LifeCorporate Center, which will throwin more than 18,000 of additionalgross leasable area to CBP. It islocated along Cardinal RosalesAvenue and is right across ACC.This twin tower project is scheduledto be turned over in the secondquarter of the year and will feature afuse of modernized office buildingfacilities. Philam Life CorporateCenter is LEED Silver Core andShell pre-certified and now at thefinal stage of receiving LEED Goldcertification.

In Cebu IT Park (CITP), minimalchange in vacancy was recorded asit decreased to 3.40% of 2nd half of2016 from 4.00% of 1st half of2016. Interestingly, CITP has thelargest growth rate in rental fee forthe last half of the year with 6.18%compared to CBP and fringe areaswith -0.85% and 4.86%,respectively. Growth in asking rateswas caused by the tight supply inthe market and continuousstrengthening of demand. Therewas no new office developmentthat was turned over in the last sixmonths of the year, althoughmassive construction of offices wason-going. Skyrise Building 4 Source: Ayala Land Inc.

Gatewalk Central Concept

FIGURE 3Weighted Ave. Lease Rate vs Rental Growth Rate (in PhP)

-10%

-2%

6%

14%

22%

30%

350

390

430

470

510

550

2009

2010

2011

2012

2013

2014

2015

2016

Lease Rates

Rental Growth Rate

Source: Santos Knight Frank Research

FIGURE 4Philippine GDP Growth Rate

5.6 6.

75.

5 6.6

5.2 5.

86.

0 6.3 6.

97.

07.

16.

6

0.0

2.0

4.0

6.0

8.0

Q1

2014

Q2

2014

Q3

2014

Q4

2014

Q1

2015

Q2

2015

Q3

2015

Q4

2015

Q1

2016

Q2

2016

Q3

2016

Q4

2016

Source: Philippine Statistics Authority

Tower B and Filinvest CyberzoneTower 2 are the latest buildings thatare expected to be available in2017 catering to tenants who wishto locate in Cebu IT Park.

Additionally, 9 office developmentsoutside the major CBDs areexpected to open in the market,giving potential investors morechoices for office spaces withbigger cuts, cheaper prices yet ofgood quality. As of the 2nd half of2016, only Kings Properties’ newmixed use building, Avenir, startedits operation. The city is also lookingforward to the construction of thenewly launched Gatewalk Centralby Ayala Land Inc. which is inpartnership with AboitizLand andlocated in Mandaue City. Theproject is a mixed-use developmentstretching at about 17.5 hectareswith an investment cost amountingto 10 billion pesos. It will house ashopping center, office buildingsand residential towers. The officebuilding will add a supply of 20,000square meter of gross leasable areaby the 1st quarter of 2020.

Amidst challenges, Metro Cebu willremain to be the gateway of localand international companies insearch for leasable office spacesoutside Metro Manila. The area isstill a great choice for investorsgiven its competitiveness in terms

Continued on Page 10…

BULLISH MARKET SENTIMENT DRIVES RESIDENTIAL DEMANDResidential | Affordable and high-end projects enjoys fast take-up

6

The demand for vertical residentialdevelopments has reached newheights as various stakeholdersbecame rather more bullish aboutMetro Cebu’s local condominiumsales market. The country’ssustained growth momentum andfavorable demand-drivingindicators, which lingered over thelast 6 months of the year, hascontinued to fuel the interests ofmarket players to partake in theprovince’s growing investment pie.

A major acceleration in monthlytake-up rates across all residentialclassifications was evident in thelast semester of 2016. Affordablecondominiums, with a monthlytake-up rate that increased by 5units from the same period lastyear, currently commands thehighest with 11 units being sold permonth. Demand was mostly pulledby pre-selling projects that werewell-received by both foreign andlocal investors taking advantage of

the growing local workforce,particularly in the business processoutsourcing (BPO) sector.

Condominiums targeting the uppermiddle to high income marketlikewise recorded a 5-unit increasefrom the previous half. At present,high-end projects are selling at 9units per month which stems fromforeign and local retirees as well asaffluent individuals looking forresidential units infused with alifestyle-focused living concept.Some developers have alreadystarted incorporating such conceptin their projects including VistaLand’s first undertaking in theprovince, Vista Suarez Cebu inCebu City, and the world classdevelopment by Hongkong Landand Taft Properties in Mandaue,Mandani Bay Suites. In less than ayear, both projects have alreadysold 73% and 93% of theirrespective inventories.

The performance of mid-endcondominiums, on the other hand,was a tad slower compared to the

to the other classifications. Havingbeen able to increase by 2 unitsfrom the same period last year,monthly take-up stands at 7 unitsper month originating from the brisksales of pre-selling projects which, ifcompared to ready for occupancy(RFO) ones, offers relativelyinnovated concepts. This justifiesthe slow take-up for RFO unitsreflecting the changing appetite ofthe middle-income market,particularly new home owners.

The upswing in monthly take-uprates provide enough attestation ofa healthy residential market in MetroCebu which further validates thecurrent selling prices and flexiblepayment schemes. Condominiumunits in Cebu City, which arecomplemented by their proximity tomajor office and commercial areas,still rank the most expensive with anaverage price of approximatelyPhP106,300 per square meter. Thisis followed by resort and leisure-themed units in Lapu-Lapu Cityselling at an average of PhP105,700per square meter, while typicalcondominiums in Mandaue starts atan average of PhP88,000 persquare meter.

The growth in demand andresidential prices has allowedproperty developers to ramp up theconstruction of their respectiveprojects to meet turnoverschedules. During the period, 9projects, equivalent to 1,815 units,opened their doors to the market,specifically in the 4th quarter, in timefor the holiday season. Majority ofthe projects are situated in CebuCity such as Azalea Place byRobinsons Land, Avenir by KingProperties, 32 Sanson’s Raffia andGmelina buildings by Rockwell,

Continued on Page 10…

FIGURE 5Allocation of Residential Condominiums Per Classification

Source: Santos Knight Frank Research

32%

58%

10%

High-end Mid-end Affordable

8.7

6.9

10.6

0.0

2.0

4.0

6.0

8.0

10.0

12.0

High-end Mid-end Affordable

FIGURE 6Monthly Take-Up Rates of Condominiums Per Classification

Source: Santos Knight Frank Research

INCREASING RETAIL OPPORTUNITIES SEEN IN CEBU MARKETRetail | Metro Cebu retail sector displays positive outlook

7

The Cebu retail landscapecontinues to grow but at a relativelyslower pace. The retail marketfurther benefits from the variousinfrastructure projects and the influxof real estate developments varyingfrom mixed-use, residential andoffice developments. Increasingconsumer spending is observed inMetro Cebu which resulted to theupward movement of localstatistics. The inflation rate, one ofthe significant indicators ofeconomic growth, was recorded at3% in December 2016. This is a0.4% increase from January of thesame year.

Positive business outlook in thearea prevails amidst uncertainties.Cebu City remains one of MetroCebu’s growth drivers due to thelarge number of existingdevelopments and new projects inthe pipeline. Cebu City’s highdensity is extremely favorable toneighboring cities andmunicipalities. Developments arenow directed towards areas outsideof Metro Cebu allowing moreinvestors to penetrate intountapped market. Maturing marketin highly urbanized areas like LapuLapu and Mandaue City indicatesthat other locations are becomingmore conducive to businessprospects.

Local spending, backed byincreasing tourist arrivals in MetroCebu, projects a sound retailmarket which boosts local andinternational retail brand entry. SMMalls, Metro Retail Stores Group,Ayala Malls and Robinsons Mallsremain dominant in the Cebu retailmarket with generous amount ofretail spaces available toaccommodate incoming retailbrands. Brands such as Yakimix,Chat Time, and Mizuno haveopened in SM Seaside togetherwith other local retail brands.

Retail expansions in RobinsonsGalleria Cebu is likewise evident,with Luminox, G2000, Levi’s, Vans,Hap Chan, Daiso and Samsungscheduled to open their respectivestores soon. Retail openings inclothing apparel garnered 55% ofthe total retail openings, followed byfood and beverages with 27% andother retail sectors, such ashomeware and other consumergoods with 18%.

Future retail expansions of brandssuch as French Baker, Tim HoWan, Ichiban, Kyochon, BestRamen Sachi, Yoshinoya, Phat Pho,Baskin Robbins, Seattle’s Best,Parfois, Yves Rocher, Mango andother local brands are stillanticipated. Overall retail vacancyrate in Metro Cebu is projected at6% and is expected to increase asmore developments currently in thepipeline are slowly unveiled andcompleted in the coming years.

In maintaining a mall’s commercialdistinction, developers thrive toinnovate and follow through ideasand concepts that are timely andsuitable. The Ayala Mall in CebuBusiness Park still have a number ofvacant spaces that led to theintroduction of the Lifestyle Fair andGienda Mayor concept wherevarious booths sell local delicaciesand crafts. Spaces occupied by thefair is estimated at 100 sq. m. fittingin 18-20 retailers with retail rentsranging from Php29,000 to 40,000per month. The event is scheduledto run from November 2016 toMarch 2017.

A number of restaurants alsoparticipated in the SM food carnivalheld in December. SOI, The Pitstop

Pink Heaven, Zawadi coffee andgelato, and other food tenantspromoting their products anddifferent cuisines joined in thecelebration of the mall’s firstanniversary.

Clothing bazaar, food bazaar andpop-up stores are some of the retailtrends used by shopping mallowners and operators to generaterevenues from vacant spaces.

Competition in the market is verystiff making developers aggressivein securing market shares.Upcoming mixed-use developmentsare much awaited considering thatmajority of these projects come witha retail component mostly cateringto the local employees andresidents of the area.Supermarkets, coffee shops,convenient stores and other foodchains are expected to occupy thefuture retail spaces.

With the provincial governmentsnow exerting efforts in developingother areas outside of Cebu Cityand as local demographics continueto improve, doing business in MetroCebu becomes more enticing toboth local and foreign investors.

FIGURE 72H 2016 Cebu Retail Openings By Sector

Food and Beverage

27%

Clothing and Apparel

55%

*Others18%

*Consumer Electronics and HomewareSource: Santos Knight Frank Research

CEBU DELVE INTO DEVELOPABLE ECONOMIC ZONE OUTSIDE URBAN CENTERSIndustrial | Increasing demand for economic zones

8

Improving macroeconomicfundamentals paved way for MetroCebu’s sound local demographics.The region continues to be one ofthe most efficient in terms of GrossRegional Domestic Product (GRDP)in the country following MetroManila, Region IV-A, CALABARZONand Cordillera AdministrativeRegion. The region is projected toexperience a 6% to 7% growth rateconsidering all other factors aresustained.

Approved Foreign Investmentsreached 13.59 billion pesos whichis significantly higher than lastyear’s 11.69 billion pesos of foreigninvestments. Major growth drivers inthe industry were manufacturing,trade and real estate including otherrenting and business activities.Investment in manufacturingremains upbeat registering a 53.2%growth rate followed by investmentpledges in electricity, gas, steamand air conditioning, andadministrative and support serviceactivities with a growth rate of25.4% and 9.4% respectively.

Investors have expressed theirinterests in the Cebu industrialmarket as some of the availableindustrial spaces in the market havealready been occupied, varyingfrom manufacturing spaces towarehouses. Very few availablespaces are left in the economiczones, some of which are in MactanEconomic Zones (MEZ) I and II andCebu Light Industrial Park. MEZ Iand II have approximately 15,000sq. m. of available space formanufacturing and warehouseswhile Cebu Light Industrial Park has1,700 sq. m. of available space formanufacturing.

Available lot areas in West CebuIndustrial Park and Naga Valley

Industrial Park are still open in themarket, however, investors havealready looked into these areas andare expected to occupy the vacantspaces in the coming quarters.Other special economic zoneslocated in Mandaue City, Lapu-Lapu City, Naga City, Danao Cityand Balamban town are beingendorsed to satisfy the urgent needfor industrial spaces.

With the increasing investor interestfrom other countries, majority ofwhich are coming from fellow Asiancountries, expansions in economiczones are imminent. This is in orderto cater to the rising demand in themarket. Philippine demographics isideal for investors and canpotentially be an easy access in theASEAN market for globalcompanies venturing into theindustry. Opportunities in renewablepower ventures, agri-businessopportunities, agriculturaltechnologies and othermanufacturing activities are some ofthe possible investment activitiesthat can be highly favorable tocompanies wishing to invest in thecountry.

The country also offers incentivesand perquisites through thePhilippine Economic Zone Authority(PEZA) that lure in more investors.Moreover, towns and municipalitiesin the Central Visayas region arecurrently being assessed andconsidered as potential economiczone sites outside of known urbancenters. Infrastructuredevelopments in these rural areasare needed in order to be morecompetitive and attractive to foreignand local investors alike.

The Cebu industrial sectorcontinues to benefit from growthpatterns experienced in the

country. With the sustainedindustrial activities and vast investorcommitments, economic zones indifferent areas in the region areexpected to reach full capacity inthe coming years.

12.5

6.8

9.4

7.4 7.8

4.8 6.

0

0.0

2.0

4.0

6.0

8.0

10.0

12.0

14.0

2010

2011

2012

2013

2014

2015

2016

E

y-o-

y %

Gro

wth

FIGURE 8Central Visayas GRDP Growth

Source: Philippine Statistics Authority

STAKEHOLDERS TEAM UP TO BOOST CEBU’S TOURISM ACTIVITIESHospitality | Reaping gains from the regionalization of growth

9

Cebu maintains its position as oneof the top tourist destinations forforeign and domestic travelers.Data from the Department ofTourism (DoT) reveal that visitorarrivals in the 2nd half of 2016registered a 9% increase from2,741,057 foreign tourists recordedin the previous year. In terms ofvisitor entrants via air, Ceburemains on the second spot,following Metro Manila, as itwelcomed approximately 16% to20% of the total visitor volumeduring the period.

The robust influx of tourists in Cebucan be partly attributed to airlinecarriers that have secured a go-signal from the DoT to launch newand additional routes. AirAisarecently added direct internationalflights from Cebu to Taipei andCebu to Singapore. At the sametime, since Cebu acts as a gatewayto the Southern part of the country,Cebu Pacific added daily domesticroutes to cater to the increasinginter-island travel demand in theVisayas region particularly in Leyte,

Capiz and Samar. Japanese airline,Vanilla Air, will also begin offeringdirect flights between Narita inJapan and Cebu by the end of2016.

The new and additional flights arebasically an indication of increasingpassenger traffic originating fromforeign and domestic tourist travels.However, the healthy inflow ofvisitors during the period waslargely due to business activities aswell as meetings, incentives,conventions and exhibits (MICEactivities). Several hotels creditedthe considerable occupancy levelsto MICE activities amidst the leanseason in the 3rd quarter of theyear. Reported hotel and resortoccupancy rates ranged from 70%to 80%.

In terms of accommodationservices, Cebu is equipped with8,916 fully-operational hotel roomsbased on latest DoT statistics. 78%of the total supply are situated inCebu City as it caters to individualsor groups either on leisure, businessor MICE purposes. Lapu-Lapu Cityand Mandue follow with 14% and5%, respectively. The supply isexpected to breach the 10,000mark as hotels scheduled to openin the next six months are estimatedto add around 1,251 rooms. Thisincludes Toyoko Inn and Bai Hotelin Mandaue.

International and local hotel playersare likely to ramp up their portfoliosto provide more accommodation inCebu. Mactan Leisure City is one ofthe newest hospitalitydevelopments in the pipeline towatch out for. It will occupy 14-hectares of land in Mactan Islandand is a collaboration betweenCalata Corp, Sino-America Gaming

Investment Group, and MacauResources Group. This joint ventureproject rests on the idea ofintegrating other tourist-attractingcomponents to the traditional hotelconcept. Expected to beoperational by 2020, it will becomprised of 3 hotels, a casino andentertainment complex,commercial, retail, conferencefacilities, and a yacht club.

Moving forward, Cebu’s hospitalityindustry will continue to thrive in theshort-term as several big-ticketevents are expected to boost visitorarrivals as well as hoteloccupancies, alongside thegovernment and private sector’scombined marketing efforts. In thelong-term, the currentadministration’s stance ofexpanding business and economicactivities in the countryside,particularly thru aggressiveinfrastructure developments, areanticipated to unlock more businessand tourism opportunities in theprovince.

FIGURE 9Allocation of Hotel Rooms Per Area

78%

14%

5%

2%

Cebu City Lapu-Lapu City

Mandaue City Other Areas

Source: Department of Tourism-Region 7

10

Continued from Page 6 Residential

East Tower B of Grand ResidencesCebu by Grand Land, and Tower 2of Bamboo Bay Community byContempo Properties Holdings Inc.In other areas, the North Tower ofAmaia Steps Mandaue was alsodelivered.

New project launches, on thecontrary, were slightly at par withthose that have been turned over. Atotal of 1,486 units were unveiled,mostly under the mid-end andaffordable classifications. Theseprojects include Apple One BanawaHeights Villa 5 by Apple Propertiesin Cebu City, Tambuli SeasideLiving Tower E and F by TPDI inLapu-Lapu City, and Grand SanMarino Residences by LandTradersWorld Properties Corp. in MandaueCity. The new additions brought the

supply in Metro Cebu to a total of32,277 units as of 2016.

The positive momentum of MetroCebu’s residential market is likely topersist in the coming periods. Theheightened demand is expected tobe sustained provided that interestrates remain at favorable levels,overseas Filipino (OF) remittancesdisplay robust growth, and the BPOindustry continues to expand. Allother things constant, the remainingunsold units or about 18% of thetotal stock is expected to be fullyabsorbed in the next 2.2 years.

Continued from Page 5 Office

of cheap labor, richness in skilledworkers, presence of cost efficientfacilities and availability ofinfrastructures. Cebu City willcontinue to hold its title as thebusiness capital of the Visayasregion and is projected to attractmore investors in the coming years.

The location of Cebu was deemedeven more desirable backed by thegovernment’s thrust of empoweringother cities outside the busymetropolitan of Manila with thehopes of decongesting the latter.More developments are in thepipeline and robust optimism isnotable in the island as moreinfrastructure projects are directedtowards the Visayas and Mindanaoregion. A large number ofopportunities await the businessdistricts of Visayas presenting thepotential of being the next big starof the country, following thefootsteps of Metro Manila.

Source: Santos Knight Frank Research

Tambuli Seaside Living Masterplan

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