Luxury Expert: the time to invest in Mactan is now
Luxury Expert: the time to invest in Mactan is now
Philippine coastlines have long been a draw for tourists seeking stunning beaches and glass-clear sea, but Mactan in particular is catching this investor’s eye – here’s why
As an investor, I understand that it’s easy to be drawn to places which claim to be ‘undiscovered’ and ‘up and coming’. On a recent trip to the Philippines, however, my attention was drawn to an area that cannot claim to be either.
Mactan, the most densely populated island in the Philippines, is home to more than 400,000 people in just 65 square kilometres. It’s a popular destination for Filipinos and foreign tourists alike, and it’s not hard to see why. The town is bustling, the beaches are plenty and snorkelling excellent due to the coral reef. There are also enough sightseeing opportunities to keep the culture vultures happy.
Although it’s an island, Mactan is officially part of the sprawling Cebu metropolis, connected to the mainland via two bridges. Proximity to Cebu means that big city amenities are easily found by those wanting to blend peaceful island life with urban convenience.
Cebu itself is a force to be reckoned with. It’s the country’s second biggest city and business centre, and the Mactan-Cebu international airport has flights to all major Asian destinations such as Singapore, Hong Kong, Taipei, Tokyo, Osaka, Busan and Seoul, as well as significant global routes including Los Angeles and Dubai. Some 4.5 million domestic and international passengers now pass through here every year, and upon arrival it’s a mere 20-30 minute drive to most major resorts or condos of Mactan.
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Mactan also boasts an industrial tax-free zone and factories, many of which are Japanese owned and housed in the Mactan Export Zone. There also appears to be a strong Korean business presence, which is perhaps understandable given the close to 50 weekly flights to Korea.
These companies pull in droves of their own. These expats rent properties and many of them end up buying condos, creating a steady demand for new projects. In turn, these rather wealthier corporate expats create business opportunities for other compatriots who also move to Cebu and Mactan to service them, be it restauranteurs, travel and sightseeing agents, language school masters or diving instructors. These in turn also rent properties and commercial spaces, creating more returns for landlords and investors.
Still, I believe Mactan’s true potential as an investment destination is yet to be unlocked.
The primary complaint I have is the poor roads. Although an expansive road network covers the island, these tend to be narrow and poorly maintained, meaning relatively short commutes can quickly become frustrating. Such infrastructure failings need to be addressed by the local authorities if the area is ever to truly thrive as a resort destination – something we investors rely on.
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When looking to invest in a development that’s in its infancy, investors should be advised to do a background check on the developers.
Flashy brochures don’t always turn into projects being delivered as promised, so if you are unsure of the developer’s credentials and financial strength, tread with care.
Naturally it’s safer to buy into the projects that are almost completed, however by doing so a significant early discount might be missed, so if a project is intriguing to you, go for it in the early stages, so long as you are satisfied with the credibility of those behind it.
Similarly, look into who is going to manage and maintain the property. Reputation here is one of major points to be checked before committing the funds.
In spite of these downfalls, there are some notable projects for investors – both established and in construction, that caught my eye.
As a Luxury Expert I will concentrate on the higher end of these developments.
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Within these properties I focused more on the smaller units, which are usually more popular with investors due to their good rentability and faster turnover.
In general, developers in the Philippines offer 8% discount on cash payment. Since foreigners can’t get loans from local banks, many take on this option, unless they are able to take partial financing from developers, which is sometimes available.
Generally speaking, most of the smaller units are studios or one bedroom units in the range of 30sq.m to 70sq.m The range of prices are USD70,000 to USD130,000 with most of the units coming with kitchen and electric appliances and even fully furnished.
The Reef was one of the most interesting of the developments I saw.
Located right on the seafront, it is a 25-storey beach front luxury condo which has been created to be in harmony with nature, and offers total luxury lifestyle living.
It’s design credentials are impressive. The Philippines preeminent architectural and interior design firm Budji and Royal teamed up with the world famous industrial designer Kenneth Cobonpue, whose client list includes Queen Sophia of Spain and Angelina Jolie, no less.
With such big names behind the project, it will come as no surprise that most of the units have already been snapped up, however, at the time of writing there are still some studio units (45-53sqm) going at around USD 130,000.
I was also interested by Arterra Residences at Discovery Bay.
The seafront location of this resort offers panoramic ocean views and sits at the edge of Punta Engano, the famed diving spot. It is also situated on the same strip as most of the popular five star hotels on the island, including Shangri-la.
One and two bedroom units are available in the range of 63 – 65sqm going for USD154,000 to USD160,000.
These are available either as personal residential units or as condotels, which fall under Sta. Lucia Land management, which also successfully manages other condotels in Mactan.
Another interesting project to consider is Tambuli Seaside Living, a beach front resort condo, which is developed by a local property family. Tambuli comprises of three buildings and a beach club.
When I visited the place over a year ago, there were no signs of construction. This time around I was impressed by their progress and could see the buildings coming up nicely. The show rooms are well appointed and I can see the attraction for the local families to buy into this project as their holiday home, as well for foreign investors, who can use their units for holidays but also for permanent stay.
Northeast of Tambuli there is the lovely Crimson Resort and Spa, which is located next to the upcoming Reef.
While Crimson is a 5 star seaside resort and beach club, they are planning to build condo buildings just next door.
Currently they are promoting only the first building off-plan. The showroom is well laid out and tastefully furnished.
Their units are bit bigger and they are pre-selling a 2 bedroom unit at around USD172,000.
The location of the condos is behind the resort, so it is not a beach front property. Nevertheless, buyers can be insured of access to already up and running successful resort and its facilities and to the excellent beach club. The construction has yet to begin on the first building with plans to have another three in later stages.
Finally, there is Mactan Newtown.
This is the largest scale project I have mentioned, offering plenty of residential and commercial properties to chose from. Mactan Newtown is developed by Megaworld, a major developer behind many high end townships all around the Philippine archipelago.
Located next to Shangri-la, it boasts several multi story condominiums atop a shopping and commercial centre. There are also other commercial buildings with numerous amenities and even a university. The size of the project means it has a city-living feel to it. Nevertheless, the developer is promising access to their beach club of the upcoming beachfront resort, which is right next to this mega project.
The prices of residential units are along the lines I stated earlier. They’ve got nice one-bedroom fully furnished units at the starting price of around USD70,000.
In my opinion Mactan is not to be missed by anyone wanting to be part of the Philippine growth story.
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About the Author:
Alex Shlaen is an economist and holds an Executive MBA from Kellogg School of Management and HKUST. He is the founder of Panache Management Pte Ltd which represents Aston Martin Interiors, Tonino Lamborghini Casa, Formitalia design lines in Asia. He is also a serial real estate investor. He writes as the Luxury Expert for Property Report South East Asia.
Source: Property Report