CHI delays expansion until the market ease

After the success of Ayala Center Cebu’s (ACC) two-phase expansion, the Annex and The Terraces, Cebu Holdings Inc. (CHI) plans to push through with the final expansion phase, the South Surface Parking, once the market eases.

Considering the global economic threats, CHI is currently holding off the original schedule of the final phase development, which is located in front of Rustan’s Supermarket now utilized as a car park.

The planned South Surface Parking is part of CHI's super-block within the Cebu Business Park.

 CHI president and chief executive officer (CEO) Francis O. Monera said that the company is still on a "push button" mode, while it is still calibrating the development of the global economy, which is also affecting Cebu.

“If next year's economy rebounds, then we may pursue the final phase [development]," he said.

CHI will be allocating fresh funds for the South Surface Parking development plan, on top of the nearly P1 billion budget spent for the Annex Building and The Terraces projects.

The initial building plan of the final phase is already in place. However, the current feasibility study will determine what kind of development CHI is going to pursue, after creating the leisure park-inspired food and entertainment destination, The Terraces, and expansion of the shopping choices via opening the Ayala Annex Building.

Because of Cebu's dynamic economic growth over the years, CHI's master plan for ACC had been realized ahead of time. The convertion of the formerly Lagoon area to The Terraces, was originally planned to be built by 2010.

"We have to exercise prudence. We are talking here of big projects," Monera said in an interview during the announcement of CHI for the grand launching of The Terraces, and re-launching of the newly refurbished Cebu City Marriott Hotel recently. CHI owns 37 percent of Cebu City Marriott Hotel.

In 2007, ACC registered a gross revenue of P427.7 million, registering seven percent growth compared to the 2006 earnings. The company attributed the financial improvement last year due to the higher sales per square meter, rental rate increases, and remarkable lease occupancy.

The completion of The Terraces will make Ayala Center Cebu the ultimate icon of style in Cebu, and a landmark of unsurpassed shopping and dining experience.

CHI is also celebrating its 20th year anniversary this month. Over the span of two decades the Ayala Land Inc. affiliate already invested over P10 billion for Cebu, in developing several projects such as the 50-hectare Cebu Business Park (CBP), the 24-hectare Cebu Asia Town IT Park, Cebu City Sports Club, Condominiums, and the upscale Amara, a sea-side residential project in the Northern part of Cebu in Lilo-an.

Although the year 2008 had been a "great" year for CHI, as the company raked in the highest financial performance in history, he said expansion plans next year will depend on the global economy's movement.