CEBU - ArthaLand has entered the Visayas and Mindanao market by recently acquiring a prime property along Salinas Drive in Cebu City.
The company eyes the region’s burgeoning information technology and business process management (IT-BPM) sector as its primary target market.
The property is strategically located at the Cebu IT Park area where multinational IT-BPM offices currently operate.
ArthaLand presently looks at developing a world class green office building which will provide at least 51,000 square meters of high grade space to the local market on the first phase.
“We are bullish on the VisMin market given its fast paced growth in the past few years. We believe that Cebu, being a global hub in this part of the country, plays a major role in further lifting Central and Southern Philippines’ economy,” said Angie de Villa-Lacson, ArthaLand’s president and chief executive.
According to Lacson, “further growth potential is there because of well-educated Visayans and sound business environment.”
“ArthaLand will be a strong partner in the growth of Visayas and Mindanao by bringing in our experience in building world class, boutique, and sustainable projects in Cebu,” she stressed.
The Cebu property was acquired through its subsidiary, Cebu Lavana Land Corporation.
“With our investment in Cebu, our objective is to make meaningful contribution to the local economy. With our planned project, we will be able to provide more opportunities to Cebuanos and the rest of VisMin to participate in the global business,” Lacson said.
ArthaLand’s flagship residential project is Arya Residences, a two-tower boutique condominium in McKinley Parkway, Bonifacio Global City (BGC) which will be completed by the first quarter of 2016.
It is currently constructing its second project, ArthaLand Century Pacific Tower, located at the corner of 5th Avenue and 30th Street in BGC and is set to be delivered by the third quarter of 2017.
Both projects are on target to achieve dual green building certification from the United States Green Building Council’s Leadership in Energy and Environmental Design (LEED) program and the Philippine Green Building Council’s Buildings for Ecologically Responsive Design Excellence (BERDE) program.
ArthaLand is a publicly listed company whose major shareholder is Century Pacific Group Holdings, Inc., (CGPHI). CPGHI is the parent company of Century Pacific Food, Inc., (CPFI) the largest and the leading player in the Philippine canned food industry. Under CPFI are major brands such as Century Tuna, 555, Argentina Corned Beef, Angel Milk, Birch Tree, and Swift, among many.
The company is also partly owned by international investment firm, AO Capital Group.
GLOBAL BPO DESTINATION
ArthaLand’s foray into the Cebu market is largely driven by the
strong prospects in the city’s business process outsourcing (BPO) sector.
“Cebu has progressed into an alternative BPO location and is currently ranked 8th as a global outsourcing destination according to Tholons, a global services and investment advisory firm. The entry of BPO companies has transformed and paved way to the growth of the office sector in Cebu,” said Michael McCullough, managing director for KMC MAG, an international affiliate of Savills.
According to McCullough, Cebu City hosts some of the largest business process outsourcing companies such as Accenture, Convergys, IBM, JP Morgan Chase, Teleperformance, and Teletech.
“Given that it is the educational hub for the Visayas and Mindanao regions, Cebu has a well-educated labor pool with high English-speaking proficiency, thus drawing BPO operators to locate here,” explained Julius Guevarra, director for Research and Advisory Services for Colliers International.
“Cebu has become the second largest BPO location in the country following Metro Manila, and some BPO locators have established operations here so that they have a redundant site to back-up their offices in the national capital region. Costs are also lower in Cebu, thereby attracting these operators.” Guevarra added.
CEBU TO GROW FURTHER
“The drive that foreign companies have to improve profitability through the reduction of operating costs has resulted to the influx of BPO investments in Cebu and this has direct impact to the rising demand of office spaces here,” McCullough said.
“Based on the information released by PEZA, new and expanding BPO players in Cebu are still largely voice operations but we see that there are significant number of non-voice locators entering Cebu, specifically involved with data encoding, transcribing, engineering and architectural design services, creative services, software development, and other IT-enabled services,” he added.
On his part, Colliers’ Julius Guevarra is also optimistic of the market.
"From what I have seen, Cebu is still dominated by voice services. Higher value KPO services are also growing such as those involved in accounting, engineering, health care, and web design. Many operators that already have presence in Cebu are also expanding, highlighting the strength of this market as a BPO location," said Guevarra.
LIVABLE PROGRESSIVE CITY
For several years now, Cebu has been considered among the most progressive and livable cities in the Philippines. This has largely contributed to the city’s attractiveness to most multinational players.
“Apart from the deep labor pool and lower cost compared to Metro Manila, Cebu offers a more relaxed lifestyle. While Cebu has grown as a city that features many urban conveniences, it is also close to many natural attractions such as its popular beaches in Mactan.
It offers a more balanced lifestyle compared to the hustle and bustle that one is used to in Metro Manila,” Guevarra explained.
"Cebu’s economy has done very well in the past few years since it is quite diverse. Apart from the BPO industry which has exploded recently, Cebu has always had a large manufacturing base and is also driven by the local tourism industry with its many natural attractions. Because of this, the regional GDP of Central Visayas usually outperforms the national average. With this kind of economic activity coupled with a growing population, demand for traditional office occupiers has grown over the years, driving occupancy rates up in the central business districts of Cebu," he added.
“Cebu is known to expatriates and foreigners as a very livable city with many tourism spots and friendly locals. The government is currently focusing on improving the infrastructure in Cebu with the upcoming world-class terminal in the Cebu-Mactan International Airport and the Bus Rapid Transit (BRT) aimed at making the city more accessible for investors and visitors,” said Yves Luethi, vice president for KMC MAG.
“Taking all things in consideration, as the local economy of Cebu continues to grow over time, it is expected that more foreign investors will be drawn in to extend their business operations in the metropolitan area, sustaining current positive sentiment,” Luethi projects.
ARTHALAND'S GREEN BUILDING
ArthaLand’s entry into Cebu’s office market is expected to change the local landscape. With its experience in building the country’s first and only top-end residential and office developments that are on target to achieve dual green building certification in both USGBC LEED and PhilGBC BERDE, it is seen to take the lead in the greening of the local property sector in Cebu.
Green buildings are designed to operate efficiently, thus lowering resource consumption.
“BPOs are by nature very cost sensitive; the main reason why their clients outsource their activities offshore is because of cost. BPOs can take advantage of the offerings of a green building wherein operating costs would be lower due to the more efficient design of the building and its use of green technologies. It could also be used as an employee retention tool since green buildings are healthier to work in, and in many cases provide desirable amenities such as showers so that employees can bike or jog to work. These would draw employees to work in such facilities,” Guevarra said.
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