Demand for luxury condos on the rise in Cebu

CEBU, Philippines – Colliers International noted a rising demand for luxury condominiums in Cebu driven by high-spending tourists and executives working here.

"Luxury three-bedroom condominium units in Cebu are enjoying high occupancy rates due to continuously growing interest in the city as a key investment destination," Colliers said in its latest Cebu residential report furnished by Joey Bondoc, its research manager.

The property consultancy firm said much of the demand for luxury residential units is attributed to high-ranking local and foreign executives employed by Cebu’s burgeoning outsourcing and industrial sectors.

"High-spending foreign tourists and retirees also contribute to the sustained take up. Aside from their strategic locations, luxury condominiums in Cebu continue to enjoy high occupancies due to their hotel-like amenities and proximity to beach resorts and other tourist destinations," Colliers cited in the report.

Among the most in-demand luxury condos in Metro Cebu include Ayala Land Premier’s 1016 Residences, one of luxury Ayala brand's major developments in Metro Cebu. Its luxury three-bedroom units command an average rent of about P157,000 per month. 1016 is centrally located at Cebu Business Park and near Ayala Center Cebu.

Meanwhile, average rent in a three-bedroom Marco Polo Residences unit is around P156,000 per month. The property commands one of the highest rents in Cebu as it carries a global brand and residents are provided with hotel-like amenities and world-class services.

Robinsons Luxuria’s Amisa is also one of the top luxury condominiums in terms of rent as it is the very first leisure residential community in Mactan.

Other key developments that continue to command premium rents include Primary Homes’ Avalon, Cebu Landmasters’ Asia Premiere Residences, and Cebu Green Peaks’ Padgett Place, Colliers noted.

According to the property consultancy firm, these high-end units continue to enjoy low vacancies and stable growth in lease rates as they are located in prime locations around the city.

Cebu Business Park, Cebu IT Park, and Mactan Newtown are examples of master-planned communities where office, retail, and residential developments converge.

These business hubs connect residents to the city’s major thoroughfares.

These luxury condominiums’ common features include gyms with top-of the-line equipment; resort-like pools; spacious residents’ lounges; and function rooms where business executives can hold social or business gatherings. These high-end projects also offer adequate open space suitable for family-oriented events and round-the-clock security service.

Being the seventh most competitive outsourcing hub in the world, Cebu has attracted a multitude of multinational business process outsourcing (BPO) and higher-value knowledge process outsourcing (KPO) companies.

Among the largest outsourcing firms in Metro Manila that have established operations in Cebu include Accenture, Aegis People Support, Convergys, ePerformax, Teleperformance, and Xerox.

"The influx of BPO and KPO executives in the city has contributed to a surge in demand for luxury residential units strategically located within the Cebu Business Park and Cebu I.T. Park," Colliers said.

It projected the outsourcing sector’s contribution to total demand for luxury condos should be sustained by the continued inflow of foreign outsourcing investments into the city.

Aside from the outsourcing sector, Cebu’s luxury residential segment is also propelled by manufacturing and export firms located inside Mactan Export Processing Zone. Metro Cebu’s high-end condominium developments meet the discerning preferences of top foreign executives holding offices within Cebu’s industrial hub. 

"The demand for luxury three-bedroom units from this segment should be sustained by the continued dynamism of Cebu’s export sector," Colliers also said.

The latter will be driven by the economic recovery of the Philippines’ top trading partner, the United States; implementation of trade deals with neighboring ASEAN economies and the Eurozone; as well as sustained manufacturing investments from Japan and China.

Colliers said: "The continued demand for luxury condominium units is also fueled by the influx of high-spending foreign tourists. The presence of direct flights from Japan, Korea, and China to Mactan-Cebu International Airport has catapulted Cebu to become the Philippines’ most preferred tourist destination."

Some of the foreign visitors who initially stay in Cebu for short vacations eventually decide to retire in the city and its neighboring areas due to the comforts of an urban landscape balanced with natural attractions. These foreign retirees contribute to higher occupancies in Cebu’s prime residential condo units.

This sustained demand, the company said, is providing impetus for both local and national developers to intensify development of luxury projects across Metro Cebu.

Recently, holding firm Udenna Corp. obtained a provisional license from Philippine Amusement and Gaming Corp. (PAGCOR) to develop a US$300 million integrated gaming resort in Cebu. The project, called Lapu-Lapu Leisure Mactan, will house luxury condominium units, among other developments.

Among the recently launched luxury projects in Metro Cebu include The Residences at The Sheraton Cebu Mactan Resort, Sheraton’s first branded resort residential development in Southeast Asia. These major projects should sustain Cebu’s status as the largest luxury condominium market outside of Metro Manila.

These luxury projects in the pipeline are enjoying high take up especially among Singaporean, Taiwanese, Japanese and Korean investors who are looking for multiple units to invest in. Chinese investors are also becoming more aggressive in acquiring properties outside of mainland China.

Colliers sees this demand spilling over to the Philippines, including Cebu.

Colliers sees the development of luxury residential condos being sustained by the implementation of pivotal infrastructure projects such as the proposed light rail transit (LRT), Bus Rapid Transit (BRT), Metro Cebu Expressway, Cebu subway, Cebu-Cordova bridge, and the Mactan-Cebu International Airport expansion.  These public infrastructure projects should further unlock opportunities for residential developments in Metro Cebu. — (FREEMAN)