The Cebu office market is attractive investors as projects in the area continue to be rolled out but the lack of infrastructure development and poor connectivity remain obstacles to its growth, real estate services provider KMC Mag Group said.
The real estate consultancy firm said Cebu that has long been pegged as one of the country’s bright spots and recent transactions have shown how bullish the local developers are in shaping the city.
Some of these major transactions were the bidding to develop 23.6 hectares of land within the 300-hectare reclaimed South Road Properties (SRP) which was won by the consortium of Ayala Land and SM Prime Holdings for P10 billion and the bidding for a 19.2-hectare property also within SRP which was won by Filinvest Land Inc. for P6.7 billion.
KMC Mag Group’s managing director Michael McCullough said that the planned development of South Road Properties into a mixed-use central business district would
definitely influence the real estate dynamics of Cebu’s real estate market.
“With townships becoming the norm, these deals may also encourage local developers to become more aggressive, especially if similarly sized parcels become available in Cebu in the near future,” McCullough said.
Major developers are ramping up their activity in the Cebu office market including Filinvest, which has rolled out the first tower of its Cyberzone complex worth P5 billion, and Norkis, which is expected to complete the first office tower of Norkis Cyberpark this year.
Meanwhile, Ayala Land is spending P8 billion for its Central Bloc project at its Cebu IT Park while Megaworld is expected to add 150,000 square meters to its Mactan Newton property by 2021.
KMC Mag group noted that although the country’s property market has a lot of advantages to offer investors, poor infrastructure and connectivity remain to be drawbacks.
McCullough stressed that the government should address these issues as it also affects the country’s economic growth.
“Low rental costs can bring investors into the Philippines, but the quality of the infrastructure and limitations in connectivity can keep the Philippines from sustaining and even improving on its growth,” said McCullough.
He added, “The government cannot afford to have these issues further impact the ease of doing business and the quality of life.”
McCullough emphasized that it was vital to improve transportation and communication across the country to be able to compete with the rest of Southeast Asia and the world.
“Otherwise, other markets will find a way to take up the slack and the rest of its advantages will become irrelevant,” McCullough said.