Real estate, BPO to continue to grow

By Cris Evert Lato
Cebu Daily News, Inquirer
January 06, 2009

CEBU CITY, Philippines - The real estate sector in Cebu will continue to grow this year despite the projection of a challenging first two quarters of 2009, an official of an international real estate services firm said.

The growth will continue to be fueled by local and foreign tourists, business process outsourcing (BPO) industry, and overseas Filipino workers (OFWs), said Trenk Frankum, general manager of CB Richard Ellis (CBRE).

Growth in tourist arrivals will encourage investment in the hospitality industry, he said.

“There is still a huge opportunity for the Philippines to improve. At three million tourists (arrived) in 2007, it is still far from 14 million tourists of Thailand. With continued push from DOT (Department of Tourism), the three million can jump to four to five in a two-year period.”

In a recent economic briefing in Cebu City, CBRE listed seven ongoing and upcoming hotel and resort developments in Cebu.

This include the 400-room hotel Radission Cebu of SM Investments Corp. (SMIC), which will be managed by Carlson Hotels, the P500-million, six-star Kandaya Hotel of MSY Holdings Corp. in Daanbantayan, Cebu and the 550-room Imperial Palace Waterpark Resort and Spa of Phil. BXT Corp., which include a 70-hectare golf facility in Mactan Island.

Aside from these, Marco Polo Plaza is undergoing expansion of 98 studio-type rooms while Cebu City Marriott Hotel just completed its 300-room renovation last December.

SMIC will also build an 8,000-square meter convention center with 5,000 seating capacity. The center will be located near SM City Cebu.

Frankum said real estate growth will also be sustained with the government's spending on infrastructure such as roads, bridges and airports which will facilitate the easier and accessible travel and transport in the province.

Meanwhile, CBRE research director Vic Asuncion said BPO companies continue to see Cebu as the Visayas-Mindanao hub for operations with its strategic location to attract large talent pool.

“New graduates are still looking for more opportunities to grow in Cebu. Graduates will continue to go to Cebu and add up to the labor force,” he said.

While other cities and provinces have geared up to get their pie's share of the robust BPO industry, Asuncion said they do not have the necessary infrastructure, which Cebu already has.

“A lot of call centers would like to open facilities there but they have no fiber optic lines, which is a major consideration taken by any call center (company).”

Joey Radovan, CBRE vice chairman and head of Global Corporate Services, said residential properties in Cebu such as condominium hits is another potential growth area.

“Before Cebu market did not appreciate condos but now, we are seeing investors taking position as well,” Radovan said.