Property experts are looking beyond Metro Manila for the next emerging central business districts (CBDs). But where in the islands would that be?
Claro dG Cordero Jr., Jones Lang La Salle’s head of research, consulting and valuation in the Philippines, told Inquirer Property that “Cebu and Davao have the potential to be the locations of the next big CBDs, due to the level of economic and commercial activities in these two areas.”
“In fact, both Cebu and Davao have various emerging urban districts (EUDs),” he added.
Cordero explained that in Cebu, aside from the Cebu Business Park and the Cebu IT Park (both developed by Ayala Land) which can be considered the traditional CBD areas, new EUDs are being developed by property giants SM Group (in the South Reclamation Project); Robinsons Land (on Maxilom Avenue); and Megaworld (at the Mactan Newtown Center in Lapu-Lapu City).
Cordero said the Filinvest Land project in the South Reclamation Project could also be considered as another EUD in Cebu.
Karlo Pobre, Colliers International’s research and advisory services manager, also gives a thumbs up for Cebu. “I think Cebu is somehow a few years younger than Metro Manila, but the current rapid rate of development suggests that it can grow faster moving forward.”
Pobre explained that there has been the emergence of major business districts, pioneered by the Cebu Park District, now followed by the Mactan Newtown and the 300-hectare South Road Properties. For completed residential condominiums, the supply grew rapidly by an average of 60 percent annually since the first project in 2005.
Enrique M. Soriano III, Ateneo program director for real estate and senior adviser for Wong+Bernstein Business Advisory, pointed out that a CBD serves as the “focal point” of a city; the commercial, office, retail and cultural center, and usually the hub for transportation networks.
So much promise
“Cebu, Davao and even Iloilo offer so much promise as the next-generation CBDs. However, it will only happen if—and it’s a big if—the city mayors, urban planners and eco-developers get their acts together. When that happens, these strategic areas may just be the next-wave cities in 2020,” said Soriano.
David Leechiu, Jones Lang La Salle country head, said that Cebu and Davao are, indeed, promising, but “Cebu is limited to the business and IT parks.”
“Davao is looked upon as the next labor frontier since it is perceived to be an untapped labor market. In Davao, many of the clients we have brought there have doubled in size in less than two years,” Leechiu said.
Cordero said that in Davao, the emerging business districts are those that are being developed by SM Group (the SM City Lanang development), Ayala Land (the Abreeza development) and the Villar group (the Northpoint development).
He said that both Abreeza and the SM City Lanang development consist of retail, hotel and office developments. Abreeza also has residential condominium development towers, while SM City Lanang has convention center facilities.
Pobre said that at present, the total residential stock in all of Cebu, Mandaue and Lapu-lapu cities is at 6,765 units, roughly about the size of Eastwood City. By the end of 2013, it would grow to the size of Ortigas Center. By 2015, it is expected to grow by over 70 percent.
“Meanwhile, Cebu likewise has its own share of the office market, which is still mainly driven by the BPO (business process outsourcing) industry. In 2012 alone, there have been 80,000 square meters of leasable office space, or about seven new buildings delivered, some 150,000 sq m more are expected to be completed by 2014. Currently, the average rental rate in Cebu is similar to that of Ortigas, between P400 and P600 per sq m per month,” Pobre revealed.
Healthy tourism market
Pobre said that Cebu is more appealing compared to Metro Manila when it comes to tourism.
“Even the frequently visiting Japanese and Koreans have found Cebu as their new home, which reflects in their acquisition of leisure residential units, particularly in the cities of Mactan and Lapu-Lapu.”
He added that the best thing about Cebu is its “business-plus-leisure environment.”
“You can be in your office the whole day, but find yourself enjoying a drink in Mactan Shangri-La in the evening; or at least an escape to the nearby beaches and islands during the weekends, which you can hardly do in Metro Manila,” said Pobre.
Cordero said the emergence of EUDs in Cebu and Davao presents local businesses an alternative to the traditional business districts in city centers, by offering masterplanned communities and high-quality space and accommodation.
“These EUDs are not at all different to the early years of the established CBDs in Metro Manila (such as Makati and Ortigas CBDs). These EUDs will eventually attract businesses and companies to locate in these areas.
He stressed that what would make these different from the established CBDs is for these EUDs to properly implement the masterplan and carefully provide easy access by introducing new modes of transport, which have been commonly neglected in business districts,” said Cordero.