NATIONAL developers continue to launch projects in Metro Cebu as they are optimistic about the locale’s potential for growth even beyond 2024.
In its latest market report, Colliers Philippines noted that Cebu remains one of the most attractive and largest residential hubs outside of Metro Manila.
“Cebu is a top-of-mind option for national players planning to capture demand outside of the Philippine capital but still able to corner the growing demand from thriving, burgeoning upscale and luxury markets,” the property advisory firm said.
Colliers said the improving sentiment from businesses and individual investors and end-users will likely support Cebu’s residential sector’s growth.
In 2023, Colliers said about 5,600 condominium units were sold in Cebu, with the lower mid-income segment priced from P3.2 million to P7 million accounting for nearly half of the total take-up, or about 62 percent of total condominium units sold in the pre-selling market during the year.
The demand for these segments is partly sustained by investors who plan to rent out their units to outsourcing employees, the firm said.
More than half
Cebu cornered 83,800 square meters of outsourcing office space deals or more than 50 percent of total transactions outside Metro Manila in 2023. These segments should also receive sustained demand from local investors as well as Filipinos working abroad looking for viable investment options, the report said.
The affordable to lower mid-income segments also dominated the take-up for house-and-lot projects in Cebu, accounting for 55 percent of horizontal units sold in 2023, also supported by remittance-receiving households, especially as Cebu is part of Central Visayas region, one of the top sources of deployed overseas Filipino workers in 2022.
In addition, Colliers recorded the completion of 10,500 new condominium units in Metro Cebu in 2023. Among the notable completions during the year were Avida Land’s Avida Towers Riala, Cebu Landmaster’s Mivela Garden Residences, Casa Mira Towers Guadalupe and Casa Mira Towers Mandaue and Minglanilla’s first condominium project Thyme Residences.
From 2024 to 2028, the cities of Cebu, Mandaue and Lapu-Lapu will likely account for 97 percent of the new supply.
By 2026, Colliers expects Cebu’s condominium stock to reach 93,100 units with the average annual completion of 5,000 new units from 2024 to 2026.
National builders
Projects from national developers in the pipeline include Rockwell Land’s The Villas at Aruga, Megaworld’s Pearl Global Residences, 8990’s Urban Deca Homes Banilad (two towers) and Arthaland’s Lucima. These projects, classified as affordable to luxury in terms of the total contract price (TCP) per unit, are dispersed across the cities of Cebu, Mandaue and Lapu-Lapu.
Upscale, luxury market
Moreover, Colliers believes that the market for upscale and luxury residential units in Cebu is likely to expand so developers should further address investors’ and end-users’ appetite for these units.
Among the recently launched upscale and luxury projects are Rockwell Land’s The Villas at Aruga, the most expensive project in Cebu so far. The project has an average TCP of P101.3 million and an average price per square meter 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 supply is likely to be driven by local and overseas-based Cebuano investors looking for attractive investment prospects that are also viable hedges against inflation,” Colliers explained.
Options
With all these non-stop developments amid land scarcity and high land values, Colliers sees Cebu reaping the benefits of a recovering property market.
It noted that Cebu is well prepared to capture demand post-Covid as it has options that cater to the demands of end-users and investors.
It added that the island also has diversified projects that serve the residential needs of young employees to the more discerning and astute investors.
The continued growth beyond 2024 will be supported by sustained regional economic growth, a stable inflow of remittances from Filipinos working abroad, and sustained business process management investment, with Cebu cornering more than half of office space deals closed outside of Metro Manila in 2023.
“Developers should further explore opportunities in the market but these strategies should revolve around the continued offering of attractive promos and flexible payment schemes as well as exploration of alternative locations for residential development, covering condominium, house and lot and lot only developments,” it said.
Looking ahead, Colliers believes that it is essential for Cebu developers to further differentiate to stand out in a fiercely competitive market and satisfy the demands of discerning consumers.
Joint ventures
Homegrown developers with sizable parcels of developable land should explore the viability of forming joint ventures with national and even foreign developers.
Colliers also expects more projects that will feature green and sustainable features, more open spaces as well as upscale amenities.