Cebu property poised for upswing

Colliers Philippines with Rockwell Cebu team

(First of two parts)

The Colliers Philippines team had an action-packed roadshow in Cebu last March 11 and 12.

After a series of face-to-face briefings in Metro Manila, we decided to touch base with our clients from the Queen City of the South. Our team, led by Colliers Philippines managing director Richard Raymundo, updated our clients on the latest, unbiased property insights and shared data-backed recommendations. We were joined by Colliers consultant Ieyo de Guzman, Capital Markets and Investment Services senior director Julius Guevara, Advisory Services senior director Tim Teodoro, Landlord Representation director Maricris Sarino-Joson, and Colliers Cebu’s Ohara Rosales-Sagun.

What I can conclude from our discussion with our clients is that Cebu is indeed viable for more property projects, further cementing its stature as a major property investment destination across the Philippines.

As I highlighted previously, Cebu remains an important location for property developers looking to expand foothold outside the Philippine capital, as supported by continued landbanking and launch of more integrated communities. National developers continue to launch in Metro Cebu as they are optimistic of the locale’s potential for growth even beyond 2024. In our view, the improving sentiment from businesses and individual investors and end-users will likely support the Cebu residential sector’s growth.

Alveo with Colliers Philippines officials

With immense potential for further expansion, Cebu’s property market is definitely well-positioned for an upswing. It is ready to pivot for further growth.

Test the market for upscale and luxury units

Among the recently launched upscale and luxury projects include Rockwell Land’s The Villas at Aruga, the most expensive project in Cebu so far on a per sqm basis. The project has an average total contract price (TCP) of P101.3 million and an average price per sqm of P589,600. Meanwhile, Robinsons Land also launched an upscale project, Mantawi Residences, priced at P16.3 million.

The supply of upscale and luxury residential projects in Metro Cebu is relatively small compared to Metro Manila. But the demand is likely to be driven by local and overseas-based Cebuano investors looking for attractive investment prospects that are also viable hedges against inflation. Just like in Metro Manila, we see these investors banking on the capital appreciation potential of these upscale and luxury residential developments.

Alternative sites for vertical projects

Colliers encourages national players as well as local or homegrown firms to look for alternative sites for condominium development outside of Cebu, Lapu-Lapu, and Mandaue cities. Colliers has observed that these locations are among the most popular sites for condominium projects under the upscale and luxury price segments, offering condominium units prices at least P12 million a unit.

Colliers Philippines team with Vista Land officials

Meanwhile, property firms should look at parcels of developable land in Mandaue, Cebu IT Park, and Cebu Business Park that are ideal for higher-priced condominium projects. Established national developers may explore tie-ups with Cebu-based developers for their planned pockets of development. Other areas that developers should consider exploring for vertical developments include Talisay city, Liloan and Minglanilla.

More leisure-oriented developments

In our view, demand for leisure-oriented properties will partly be sustained by the recovery of leisure and travel sector. Aside from local investors, the demand for these residential projects is also likely to come from foreigners. Colliers believes that developers planning to capture demand from the foreign market should explore the attractiveness of leisure-oriented and resort-themed projects especially in Mactan.

Over the near to medium term, the demand for resort-themed developments should be propelled by the rising number of foreign and domestic tourists. No surprise given that Cebu is one of the country’s major tourist destinations, thanks to its recently expanded and modernized airport. (To be continued)