RESIDENTIAL developments are mushrooming not only in Metro Manila and Luzon, but also in the Visayas and Mindanao, according to a top executive of a Cebu-based real-estate company.
Cebu Landmasters Inc. (CLI) President and CEO Jose Soberano III said the robust Visayas and Mindanao construction activity is indicative of the unprecedented residential demand in both regions that now matches that of the metropolis.
Citing the recent report of Leechiu Property Consultants (LPC), he said this trend could be attributed to the continued growth of the information technology-business process management (IT-BPM) industry and steady inflow of remittances from overseas Filipino workers (OFWs). The IT-BPM sector generated $22.9 billion in revenue last year, providing direct employment to some 1.15 million Filipinos.
While 70 percent of the total projected work force will still remain in Metro Manila, the national government’s all-inclusive plan IT-BPM Road Map 2017 to 2022 will positively impact expansion in rural areas.
Provincial employees are estimated to grow by 60 percent in the next five years. The number of full-time workers in the countryside will increase from 1.2 million to 1.8 million by 2022.
LPC CEO David Leechiu said business-process outsourcing (BPO) locators in the provinces will keep on offering relocation incentives to interested applicants.
Meanwhile, OFWs will remain a main pillar of the property industry, making up a major part of the widening middle-income market.
Data from the Bangko Sentral ng Pilipinas showed that the total amount of money sent by OFWs back to the country grew by 5 percent to $26.8 billion in 2016 from $25.6 billion in 2015.
He said more than 60 percent of their remittances go to real-estate investments.
As per data from the Philippine Statistics Authority, there are 15.7 million square meters of floor area of approved building permits in 2015, whose constructions are still ongoing. Of the totality, single houses account for 52 percent; townhouses, 20 percent; and residential condominiums, 28 percent.
Location-wise, Region 7, or Central Visayas, accounted for 10 percent, same as Metro Manila.
This is the first time construction in other regions are as lively as the latter due to continuous development projects of both the national and local property players, Leechiu noted.
CLI, for instance, is investing some P12 billion in the Visayas and Mindanao due to growth potential of both regions.
Its application for an initial public offering to raise up to P3.8 billion was recently approved by the Securities and Exchange Commission.
The Cebu-based firm is the second-leading local housing developer in the Visayas and Mindanao regions as regards the number of residential condo units sold in 2016, next only to real-estate giant Ayala Land Inc.
Due to the quick market absorption of its projects, the company aims to further expand its footprints and become the region’s dominant local player in three years with new projects in Davao, Dumaguete, Cagayan de Oro, Bacolod and Iloilo.
Soberano said that they are keen on Regions 6 and 9 (Western Visayas and Northern Mindanao), where residential developments also rise as shown by the significant increase in building permits filed in 2015, with the former accounting for five percent as the latter partaking six percent.
The builder is intending to bolster supply with townhouse projects that carry its Casa Mira brand that offers units ranging from P800,000 to P1.7 million, catering to the economic segment, or those with P15,000 to P40,000 income.
Also seen boosting the inventory are its residential condominiums priced from P1.8 million to P5 million and targets the mid-market with incomes from P50,000 to P90,000.
The CLI president and CEO observed that, being a homegrown Visayas and Mindanao brand, the firm has been able to offer projects priced right for the market and perceived to be offering more by way of location and amenities.
Consequently, its key projects have sold out in less than a year. For example, the 725 housing units of its economic offering in Metro Cebu, Casa Mira Linao, were already taken up in just one month.
“Our ability and capacity to serve the full range of residential-market segments gives us great flexibility in the Visayas and Mindanao area,” Soberano said. “This allows us to meet the demand for high-end projects in well-developed markets, like Metro Cebu, as well as to meet demand for economic housing in places like Bohol and Dumaguete.”
Incepted in 2003, CLI currently has 28 completed, ongoing and newly launched projects in the Visayas and Mindanao. Two of its projects were named the fastest selling residential condominium developments in Cebu City by Santos Knight Frank in 2016.
Its first venture in Cagayan de Oro called MesaVerte Residences already sold out 504 units in phase one in just 10 months.
Just recently, 80 percent of the 694 units of MesaTierra Residences in Davao was already bought in just one month of selling. Total sales of CLI in 2016 stood at P2.17 billion, or 40 percent higher than P1.54 billion posted two years ago. Net income grew by 30 percent, from P537.17 million in 2015 to P702 million last year.