Acacia Hotel Opens in Davao
Puregold Price Club, Inc. (PPCI) inaugurated Acacia Hotel in Lanang, Davao City on November 22, 2019. This is the company’s third Acacia hotel in the country after its initial sites in Manila and Bacolod. The development houses 260 guest rooms and nine areas for meetings, incentives, conventions, and exhibitions (MICE). The hotel project aims to generate additional jobs in the province.
In our opinion, upcoming infrastructure developments, like the Davao public transport modernization project, and the introduction of new hotels like Acacia in Davao City will likely support the region’s goal of positioning itself as a meetings, incentives, conferences and exhibitions (MICE) destination. International direct links to Doha, Jinjiang Quanzhou, and Manado Indonesia offered by Qatar Airways, Xiamen Air, and Garuda Indonesia, respectively, were also launched in 2019, further improving Davao’s connectivity to the world. To take advantage of the robust tourism growth, we recommend that developers acquire available land in the city that can be developed into hospitality and retail projects Colliers also recommends developers to look into the viability of constructing convention centers as the province has been attracting the attention of major events like the MICE Conference 2020, to be hosted by Davao City within the year.
CLI to Spend 10B for Three Projects in Davao
Cebu Landmasters, Inc. (CLI) continues to expand its investments in Davao City by allocating PHP10 billion (USD196.1 million) for three projects in 2020. These include Paragon Davao, Davao Global Township (DGT), and the Lyceum of the Philippines (LPU) township. The developer is currently constructing the second out of seven towers scheduled in the pipeline for Paragon Davao while planning the retail component and access roads of the 25-hectare (61.8 acres) DGT. A portion of the money will also likely be used for the construction of access roads and the first residential tower of the LPU township.
Based on the 2019 preliminary report of the Department of Trade and Industry in Davao Region (DTI-Davao) some PHP4.18 billion (USD81.96 million) of investment entered the region as of Q3 2019 with the largest projects under the real estate industry at PHP1.7 billion (USD33.33 million). This reflects the growth of property development in the province. An example would be CLI’s continuous investment for its township projects in the city. Colliers believes townships and mixed-use developments offer a better value proposition as compared to stand-alone projects especially with the attractiveness of the live-work-play lifestyle. Colliers recommends buyers and investors to look into viable investment options in the city such as the residential projects built within integrated communities which will likely have greater capital appreciation potential due to their location. National developers planning to expand their township projects within the province should also consider partnering with local players that own parcels of land in the area and are more familiar with the preferences of Davao end-users and investors.
Cebu Office Tower On Track For Turnover
The 26,000 sq metre (279,900 sq feet) JEG Tower @ One Acacia is on track to be delivered by Q1 2020. The recently topped off PHP1.04 billion (USD20.4 million) office tower offers 22-storeys and is located along Archbishop Reyes Ave. in Cebu City. According to JEG Development Corp., the office tower intends to cater to knowledge process outsourcing (KPO) and business process outsourcing (BPO) tenants as well as traditional corporate firms.
Colliers sees office space demand in Cebu being fueled by the sustained growth of the information technology-business process management (IT-BPM) industry in the province. According to Cebu IT-BPM Organization Foundation Inc. (CIB.O) managing director Wilfredo “Jun” Sa-a, outsourcing companies continue to thrive in the province and demand is now also coming from higher-value services such as coding and programming. A number of BPO companies have also expressed their plans to increase their workforce by 2020. These include Tech Mahindra, a BPO company located in Cebu City, that aims to increase its workforce from 3,000 to 4,500 employees by 2020. Colliers believes that upcoming office buildings in 2020 such as JEG Tower, Cebu Exchange, and Latitude Corporate Center will likely benefit from sustained take up from the outsourcing sector. Colliers recommends that tenants eye office spaces in upcoming buildings and take up available space in Cebu Business Park and Cebu IT Park and their fringes due to the benefits of operating within an integrated community. These benefits include access to retail and residential components and ease of commute for employees due to proximity to public transport terminals.