Cebu’s economic pillars remain upbeat in 2020

Johanna O. Bajenting - Katlene O. Cacho

THE year 2020 promises a vibrant feel for Cebu’s economic pillars—real estate, retail, tourism and information technology-business process management (IT-BPM) sectors.

For real estate, in particular, real estate broker Anthony Gerard Leuterio, founder of Filipino Homes, said there is an estimated P300 billion worth of real estate properties available for sale in 2020, of which 40 percent are in Cebu City.

“Real estate remains promising in 2020. We have plenty of properties to sell. It will still be a busy year for the industry,” said Leuterio, who earlier said that the continued momentum in the property sector will be driven by the release of License To Sell permits of projects stalled for eight months, the creation of the housing department and the overall healthy economic condition of Cebu province.

Besides the rapid urbanization of Cebu City, Leuterio said Mactan Island will be a frontrunner in terms of attracting both trade and tourism investments in 2020.

“More new projects are expected to rise in Mactan. Before you know it, Mactan will become like Singapore,” he said.

Besides the rise of condo and office towers in the three bustling cities of Cebu, Leuterio also sees the continued rise of more business districts in Cebu that will house integrated developments like retail, office and residential, among others.

“With the kind of lifestyle we embrace, plus the problem on traffic developers will be more keen on developing integrated projects,” he said.

In its Cebu Property Outlook report, Colliers International Philippines expects delivery of 5,460 condominium units from 2020 to 2021. The bulk of these will come from Cebu City, but quite a significant number of these units will also come from Mandaue City.

Retail

As for retail, leasing broker for commercial spaces Eppie Acusar, founder of iBuild Management Services Inc., said demand for warehouses and commissaries will continue to go up as food businesses will remain to be a big winner in the retail space in 2020.

“Cebuanos will also have to brace for the entry of new food concepts, both foreign and local brands. The Manila brands have been keeping an eye to expand in Cebu and they put on hold their plans due to the lack of retail space,” said Acusar.

Colliers pointed out that the short-term lease concept of pop-up stores offered by mall owners especially during special occasions, like Christmas and other holidays will continue to attract startup entrepreneurs and multinational companies to expand and introduce new retail offerings.

“From 2020 to 2021, we see developers adding an average of 60,000 square meters of new retail space per year,” said Colliers. “Between 2020 and 2021, we expect overall vacancy to hover between seven percent and nine percent per year. Colliers also sees rental rates rising by three to four percent annually over the next two to three years.”

As for tourism, Department of Tourism (DOT) 7 Director Shahlimar Tamano said they are eyeing new markets like the Indians, Thais and Russians to visit Cebu in 2020. Arrivals of Chinese tourists will also continue this year.

More promotion for Cebu

“Everybody will be very busy, with the Sinulog, so we’re starting it with a bang. There will be meetings, conventions, international events. Aside from courting new markets, we will also have a very aggressive domestic campaign,” he said.

Tamano said they are working on improving Cebu as a product to new potential tourism markets as they see the need to fill up the rooms in the city’s ever expanding hospitality portfolio.

Hotel, Resort and Restaurant Association of Cebu (HRRAC) president Carlo Suarez said 2020 spells more promotion for Cebu’s tourist spots to boost room occupancy.

Mactan-Cebu International Airport Authority general manager Steve Dicdican said with the construction of the airport’s second runway, they are anticipating more foreign tourist arrivals and another unprecedented growth for the year.

“We’re very excited for 2020 with the building of the second runway. The bidding will be completed in December and construction will start in January 2020. In two years’ time the second runway will be completed,” he said.

In the area of IT-BPM, industry stakeholders also see a rosy year ahead as IT-BPM companies continue to cement their footing in Cebu and move towards offering high-value services to their clients.

Coding is our edge

“We would like to believe that Cebu is on the right track. We’re the first city to have taken the coding training so we’re doing something pioneering and other cities are looking at us. We have a sustainable model in developing coding in the city,” said Wilfredo Sa-a, managing director of Cebu IT-BPM Organization Foundation Inc.

For her part, Maria Elena Arbon, Department of Trade and Industry (DTI) assistant regional director for Central Visayas, said the agency is constantly coming up with match-up activities for the continued development of Cebu’s startup ecosystem.

“We will hit the ground running in 2020 with the recent launch of the DTI 7 x QBO partnership. Over the next three months, we will run QBO programs in Cebu. It is a networking event which is similar to our StartupIsland mixers. In March, we will do a four-day bootcamp, plus other interventions,” said Arbon.

For the ICT space, Leo Cipriano Urbiztondo Jr., Department of Information and Communications Technology (DICT) Visayas Cluster 2 Director, said they will continue improving the internet connectivity in the region.

“We will see the entry of the third telco, the implementation of the common tower policy and the improvement of our disaster response efforts to back up signals during and after calamities,” he said.