Cebu ‘attractive’ to global investors
Jonathan Umali, director of investments and asset management of the Arch Capital Management Co. Ltd., (center) poses with other speakers of the recent Big, Better, and Berde Forum organized by Urban Land Institute of the Philippines, Wednesday afternoon. CDN PHOTO/ JOSE SANTINO BUNCHITA
Global investors in the real estate industry are looking seriously at Cebu as a potential investment destination in the country.
Jonathan Umali, director of investments and asset management of the Arch Capital Management Co. Ltd., said that the Philippines and Cebu’s unique and booming Business Process Outsourcing (BPO) industry, remittances from Overseas Filipino Workers (OFWs), and tourism and infrastructure spending attract international investors to Cebu.
Umali said in a recent forum in Cebu that these qualities of the province and the country in the macro level contributes much to the economy and enables its people to spend more.
“There is wealth being created (in Cebu). The per capita GDP (gross domestic product) is increasing. We follow where the wealth is created and where infrastructure is created,” said Umali.
Arch Capital Management Co. Ltd. is a fund management company that gathers investors from Europe, United States, Middle East, and Asia to invest in real estate in the Asian region.
Half of their current businesses are located in mainland China while the remaining half are spread in Hong Kong, Macau, Thailand, and the Philippines.
Arch Capital currently has 42 investors pouring $1.4 billion worth of investment projects. These include over 29,000 homes built and 40.3 million square meters of residential, retail, office and mixed-used segments across Asia.
“Why we like the Philippines is because we have a unique story to tell. We’re not like any other country. That unique story is because we have the BPOs. Aside from India and the Philippines, nobody else has this kind of business,” he said during the Big,
Better, and Berde Forum organized by Urban Land Institute of the Philippines Institute held on Wednesday at the
Cebu Exchange Gallery Along Salinas Drive, Cebu City.
“It’s quite strong in the Philippines because of our unique culture, the language we speak, the work ethics of our people, and the youthful population,” he added.
Umali explained that the BPO industry contributes $24.5 billion in revenues to the economy while OFW remittances reached $31.3 billion.
These two segments contribute 20 percent to the country’s total GDP, he said.
Real estate industry
Umali said the need for more investments in the real estate industry in Cebu is driven by the lack of space at the Cebu IT Park.
He cited data showing that vacancy at the Cebu IT Park has remained low at 0.8 percent as of the third quarter of 2017. On the other hand, rents increase by at least 4.8 percent year-on-year.
While additional supply of spaces are expected, he said vacancy rate is expected to remain below 10 percent as a result of the strong demand and pre-commitments from BPO companies.
Rapid urbanization, where people flock to the cities, is also fueling demand for real estate, Umali said.
In terms of tourism, Umali said the country is on track with its strong stance in promoting the tourism industry, wherein Cebu is also a strong player.
He said though that the country is still far behind with only six million tourists a year. In comparison, he said Phuket, Thailand gets the same number, while the whole of Thailand gets 35 million tourists annually.
Another tourist attraction, Macau, also gets 33 million tourists a year.
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