ABOUT OUR COMPANY

CHI is a leading full-line property developer with headquarters at Ayala Center Cebu Tower, Cebu Business Park, Cebu City.


OUR GALLERY

Our Company

CEBU HOLDINGS, INC. (CHI) is a leading full-line property developer that owns and manages both Cebu Business Park and Cebu I.T. Park, where the most sought-after office, commercial, and residential spaces in Cebu are located.

In 32 years, it has developed, managed, and reinvested into these two flagship estates. Going beyond that, it has ventured as well into masterplanned integrated estates that are now emerging in the cities of Cebu (South Coast City), Mandaue (Gatewalk Central), and Lapu-Lapu (Seagrove). CHI was incorporated on Dec. 9, 1988, after its parent company Ayala Land, Inc. won a competitive bidding for the redevelopment of a golf course that sprawled on land the Cebu Provincial Government had owned. That land is now the 50-hectare CBP estate, which showcases the company’s operational excellence in strategic land management, integrated development, commercial business operations and management, and hotel  development operations.

 

Company History

In 1988, the provincial government of Cebu offered to sell via public bidding a 44.6 hectare piece of prime land previously leased to Club Filipino. The proceeds from the auction would be used as a counterpart funding by the provincial government for infrastructure and development projects. The floor price for the property was pegged at P220 million or approximately P493 per square meter.

A consortium of investors consisting of Ayala Land, Inc., Bank of the Philippine Islands, Kuok Philippines Properties, Inc., A. Soriano Corporation and the Philippine Long Term Equity Fund submitted the highest bid of P551 million or approximately P1,235 per square meter for the property.

Soon after winning the bid, Cebu Holdings, Inc. (CHI) was formed to act as the holding company of the consortium. On December 9, 1988, CHI was registered with the Securities and Exchange Commission with the primary purpose of engaging in the real estate business.

In 1990, CHI increased its total land holdings to approximately 50 hectares with the acquisition of a 5-hectare property adjacent to the Club Filipino property.

Pursuant to project management agreement dated January 10, 1989, CHI appointed Ayala Land, Inc. (ALI) as project manager for the development of the property of CHI in Cebu City of approximately 50 hectares, for a fee based on certain percentage of gross proceeds or revenues derived from the sale or lease of any portion of the developed property. The agreement provides that Ayala Land, Inc. shall undertake, among other things, the necessary functions and activities to develop the property into a multi-use complex consisting of office areas, shopping and entertainment centers, hotels and high density residential areas.

In its development of the Cebu Business Park, the Company transformed raw land into a masterplanned fully-integrated community by constructing roads and facilities required for the installation of water, drainage, sewerage, telecommunications and power systems. Certain areas in Cebu Business Park are reserved as open spaces for parks and common uses. In addition, the Company imposes certain restrictions on the construction of buildings on office lots it sells to ensure that the general character and value that it seeks to create for the property’s development are maintained.

The Company was listed in the Manila and Makati Stock Exchanges on February 14, 1994. The offering made available to the public 222.2 million shares of CHI stock.

In July 1995, after the terms and conditions of the tender offer were submitted for ratification of the stockholders, CHI acquired 76.26 percent of the outstanding shares of stock of Cebu Property Ventures and Development Corporation (CPVDC) for cash (P1.90 for every CPVDC share) and an exchange of the Company’s shares of stock (one CHI share for every 1.69 CPVDC shares) pursuant to the tender offer. About 51.5 percent of the tendered CPVDC shares was paid in cash. This was financed through a P700M long-term loan. A total of 201,957,581 shares were issued by the Company to CPVDC stockholders who opted for the share tender.

The tender offer enabled CHI to intensify its development efforts in Cebu while availing itself of CPVDC’s prime land resources. With the developments mentioned above, the Company’s ownership structure has also undergone changes. At present, CHI’s ownership profile include shares of Ayala Land, Inc., PCD Nominee Corp. and the public.

 

Ownership Structure

Cebu Holdings, Inc. (CHI) was incorporated on December 9, 1988 as a company engaged in real property ownership, development, marketing and management. It has operated as a listed company (Philippine Stock Exchange) since February 24, 1994. Its publicly floated shares account for 28.8 percent of total, well above the requirements the Philippine Stock Exchange has set. As of Dec. 31, 2020, its authorized capital stock amounted to P3.0 billion

Mission and Vision Statement

We shall be the premier real estate company in the region, creating and enhancing integrated, masterplanned, and sustainable mixed-use developments through a customer-focused and empowered team of professionals.

We ensure the trust and confidence of our stakeholders with sustainable growth while improving the quality of life of the communities we serve with passion and integrity.

Core Values

• Focus on Customer
• Bias for Results
• Entrepreneurial Drive
• Teamwork
• Concern for People
• Empowerment of People
• Pursuit of Excellence
• Love of God
• Responsibility to the Community
• Enhancement of Quality of Life

 

Group Corporate Structure

Company’s Organizational Chart

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Membership in Associations

Business and Management

  • American Chamber of Commerce of the Philippines, Inc.
  • Ayala Business Club – Cebu Chapter
  • Cebu Business Park Association, Inc.
  • Cebu Chamber of Commerce and Industry
  • Chamber of Real Estate and Builders’ Association, Inc.
  • European Chamber of Commerce of the Philippines
  • Financial Executives Institute of Cebu, Inc.
  • International Council of Shopping Centers
  • Management Association of the Philippines
  • Mandaue Chamber of Commerce and Industry, Inc.
  • National Real Estate Association, Inc.
  • Philippine Retailers Association
  • Philippine Chamber of Commerce and Industry

 

Environmental and Ecosystems Conservation

  • Business for Sustainable Development
  • Cebu Uniting for Sustainable Water Foundation
  • Soil and Water Conservation Foundation

 

Joint Message from the Chairman and the President

The year 2020 started off on a high note for the company.  We had just opened Central Bloc, a new mixed-use development in Cebu IT Park (CITP).  This added 54,182 square meters of retail leasable space, two new office towers with a combined 72,172 square meters of office leasable space and 214 rooms at the brand new Seda Central Bloc.  Our commercial leasing business was poised for growth having expanded to close to 400,000 sqm of leasable area or 12% higher than 2019.

We were also looking forward to constructing at full blast and opening of our two co-living facilities:  The Flats in Cebu Business Park and Cebu IT Park as well as the completion of another Ayala Mall in our Gatewalk Central in Mandaue in 2022.

But these were not meant to be.

With COVID-19, we had to quickly and decisively refocus our attention to three key priorities – achieving financial sustainability, creating safe communities and keeping our people engaged.

 

Achieving Financial Sustainability

The pandemic bifurcated the business world.  While some businesses thrived, others were challenged. This was also seen among our different business lines.

Our office business was steady and continued to grow amid the pandemic with revenues of P963 million, 13% higher compared to 2019.  We maintained 100 percent occupancy across our six buildings in CBP and CITP. We are happy to report that we renewed 100% of the 17,375 square meters of leasable area up for renewal in 2020. We also signed up three new tenants for our recently completed Central Bloc Corporate Center One.

On the other hand, our mall business, which traditionally brings in almost half of our revenue, struggled as a result of the lockdowns.  Cebu suffered a spike in cases which led to strict barangay and city lockdowns, closing of shops and work sites except for essential services, limited mobility and the suspension of public transportation.

We extended up to 70% in rental concessions amounting to P707.4m – to assist our merchants through these trying times. They have been our partners for many years. Although this was a difficult decision, it had to be done.

Gradual recovery in our malls began in August, with gross sales eventually reaching 47% of 2019 levels and occupancy rising to 79 percent in December.

Our hotel business likewise experienced limited operations. We needed to quickly pivot to   serve a new need, shifting from business travel and tourism to serving employees of business process outsourcing companies and corporate clients. Seda Ayala Center Cebu average 74% in occupancy the previous year. In 2020, due to limited operations, combined occupancy for both Seda hotels, occupancy averaged at 35% by yearend. Throughout all this, our hotels continued to operate, remained self-sufficient and still provided livelihood for our 97 hotel employees.

In these difficult times, arduous decisions had to be made. We reined in our spending and cut back as much as 32% of our GAE or General and Administrative Expenses versus the previous year. We prioritized our capital expenditures focusing on projects that met any of 3 criteria: 1) in advance stages of development, 2) committed for delivery to our customers and 3) had an impact on health and safety. As a result of this judicious spending, we cut back 41% of our capex in 2020.

All told, at the end of 2020, we posted revenue of P2.9 billion and a net income of P392 million. This reflects a 39 % and 76% decline in Revenue and NIAT respectively, from 2019.  Despite these challenges, we continued to keep our balance sheet healthy with our debt at P6.3 billion — lower compared to 2019, thus resulting in a debt-to-equity ratio of 0.64.

 

Creating Safe Communities

For 32 years, CHI transformed nearly 156 hectares of land into Cebu’s prime central business districts. We are very proud of the impact we have had on the regional economy of Cebu being home to close to 50,000 jobs and more than 1,000 business establishments. These are truly noteworthy achievements.

But during the pandemic, it is the focus and attention to the well-being of each and every individual in our estate that we can be particularly proud of.  Be it a locator, a salesperson, a customer, an employee – we took special care to ensure the safety of all.

Our people on the ground enabled us to operate our offices, malls and hotels despite the risks.  This was accomplished by doing the following:

  • First: We strictly and effectively implemented the guidelines set by the IATF and the DOH. Given we were in unknown territory, rules were constantly being adjusted and we needed to quickly adapt and ensure we were always in compliance.
  • Second: We invested in tools such as thermal scanners and sanitation equipment to ensure that people within our developments were kept safe.  Some of our systems, like access to permits and forms, were shifted online to limit physical transactions. At our malls, we introduced A.N.A. or the AyalaMalls Neighborhood Assistant, which gives shoppers easy access to products from our hundreds of merchants from the comfort of their homes.
  • Third: and most important, we had a dedicated and hardworking group of men and women who remained on the ground, manning our estates and facilities through these hard times.  At the start of the lockdown, our property managers from Ayala Property Management Corporation (APMC) stayed on site, away from their families for weeks at a time, just to ensure they can keep our community safe. I would like to thank them for their unwavering commitment, despite the personal sacrifices this entailed.

 

Keeping Our People Engaged

We are grateful for, and proud of the way our Team CHI stayed dedicated to their responsibilities. They adapted quickly to new ways of working and meeting their commitments to the business, to the locators and customers, and to one another.   Like other organizations, we had to learn new tools and processes to be effective. As we had already started to transition to digital platforms before the lockdown started, there was barely any downtime and were up and efficiently running at full capacity.

Going beyond crisis management, we commend our CHI family for their generosity of spirit.

The employees themselves took part in Ayala Land’s fundraising efforts which generated P83m in donations. The amount was used to provide medical supplies and equipment to COVID-19 designated treatment hospitals and partly to help affected Filipino families through Project Ugnayan. Project Ugnayan is an initiative spearheaded by Ayala Corporation in cooperation with the Philippine Disaster Resilience Foundation (PDRF) which reached out and aided 1.5 million families affected by the pandemic and the loss of livelihood.

In their personal capacity, the employees of CHI responded to the needs of others by helping our outsourced personnel and the residents of the neighboring Barangay Luz in Cebu City.

To help address the need for quarantine facilities for patients with mild COVID symptoms in Cebu City, CHI contributed to the construction of the 350-bed New Normal Oasis for Adaptation and a Home (NOAH) Complex, at the South Road Properties.

On top of this, we still continued to take part in various Ayala Foundation initiatives in Cebu including Brigada ng Eskwela for students, Tuloy ang Byahe for affected jeepney drivers, and the BuyAnihan project where care packs sourced from local farmers and Ayala companies were distributed to neighboring communities.

 

Looking Ahead

Achieving financial sustainability, creating safe communities and keeping our people engaged, fired up our sense of purpose as a company to build and nurture sustainable communities.

The company remains resilient and strong and when this pandemic is controlled, we are ready and excited to meet the challenge of a V-shaped recovery.

South Coast City, a 26-hectare waterside estate located at the South Road Properties in Cebu City will create a new business and lifestyle address in Cebu.  The project is a partnership between Ayala Land and SM Prime Holdings.  With the combined investment of these leading property developers and the strengthening infrastructure in the area, there is no doubt South Coast City will redefine Cebu’s landscape the same way CBP and CITP have.

As business climate improves, we will resume the construction of Ayala Mall at Gatewalk Central in Mandaue, break ground on our hotel at Seagrove, Mactan and complete our co-living facilities at CBP and CITP.

2021 will be another year of change for CHI as we consolidate with parent company Ayala Land.  With this merger, we expect to achieve operational synergies, more efficient funds management and simplified reporting to government agencies.

This development will also create a wider shareholder base, increasing liquidity and allowing investors to focus on one listed company.

With the merger and a simplified organization, we will be in a better position for growth as we harness the full strength and power of the Ayala Land organization and … the strength of the brand. We look forward to even more projects and estates in the province.

Cebu Holdings was formed in 1988 with the vision to grow economic potential and become a partner in the progress of Cebu. Today, 32 years later, our company has grown with two established PEZA-accredited business districts, and three emerging master planned estates. Over the years, our developments have become platforms for businesses to thrive, and families and individuals to realize their aspirations. The lifestyle destinations we have created have become go-to places for big and small celebrations alike. Our developments have become entwined with the Cebuano way of life.

We are committed to the Cebuanos and will remain attuned to the community’s evolving needs. Together with our stakeholders, we will approach each challenge as a chance to build better. We believe this crisis will pave the way for many opportunities to recover…and grow even stronger.

We thank the Board for your steadfast guidance; all of our employees for your courageous commitment to embrace change; and our shareholders for your support, as we pivot and execute our plans for the future.

 

 

Our Businesses

 

Sustainability Performance Highlights

In 2020, the world had a decade left to meet the Sustainable Development Goals (SDG) that the United Nations had adopted in 2015. In the earliest days of the new decade, it seemed that while achieving the goals in 2030 would be a challenge, the conditions on which commitments to these goals were anchored were still in place.

Global economic growth remained possible, and the global connections that made cooperation and trade happen could still be depended upon.

More than ever, achieving these 17 SDGs and their 169 associated targets cannot be left entirely to the world’s governments, which have more urgent and localized stresses to address. Everyone must play a part so that decent work and economic growth, reduced inequality, and climate action become real conditions for more people.

As a builder of transformed and transformational communities, Cebu Holdings Inc. (CHI) remains firmly committed to contributing to the targeted goals that are within its competencies and resources.

 

SUSTAINABLE CITIES AND COMMUNITIES

  • Infrastructure enhancements which provide better services to customers and communities.
  • 46,737 workers in two operational estates
  • Provided master-planned, mixed-use developments that promote resilience, inclusion, and eco-efficiency.

 

RESPONSIBLE CONSUMPTION AND PRODUCTION

  • Zero Plastics to Landfill Challenge
  • A total of 34.3 kgs of plastic laminates and clear plastics were diverted and recycled to produce eco-bricks.
  • Collected a total of 829 kgs of PET bottles for the River “Trip Trap System.” This was done in support of the rehabilitation of the Mahiga River.
  • Collected 70 cubic meters of silt, which can help to ease the fl ooding during the rainy season
  • CBP and CITP effl uent quality: Beyond Compliance
  • 2,676 kgs of glass bottles were used as components in paver

 

GOOD HEALTH AND WELL-BEING

  • Volunteers spent a total of 430 hours to pack 1,940 Educare Kits provided by Ayala Foundation for the entire Visayas.
  • Provided assistance to CHI’s front liners, who were housed inside for safety during ECQ.
  • Provision of access to CHI Plus, wherein employees learned new skills and attended webinars to maintain connection and avoid burnout.
  • E-learnings, community involvements, employee engagements, and wellness were provided to the employees and workers

 

CLIMATE ACTION

  • Combined allocation of over 11,000 sqm. Of space intended for the native tree nursery
  • Preservation of native trees in Seagrove estate
  • Raised awareness on ecosystems services and protection
  • Vegetable gardening Harvested 72 kgs of various vegetables and fruits in Cebu IT Park
  • Composting site at Upland Greens 16 tons of yard waste for compost production

 

REDUCE INEQUALITIES

  • 46,737 jobs generated
  • Women in board and senior leadership
  • Number of male and female employees

 

PARTNERSHIP FOR THE GOALS

Strong partnerships were built with the local market and communities

  • The local market sold fresh produce and seafood items to the unit owners, residents, BPO workforce, and stayin personnel during the enhanced community quarantine in Cebu.
  • Assisted the Ayala Foundation with LGU coordination for its #BuyAnihan Project

 

MARKET OUTLOOK

The national economy contracted by 9.5 percent in 2020, the sharpest drop in 70 years.

Travel bans and quarantine restrictions, especially in April and May, severely hit the services sector, which accounted in recent years for more than 60 percent of the Central Visayas economy.

Foreign arrivals in the Mactan Cebu International Airport dropped from 1.68 million in 2019 to 289,115 in 2020. That 82.7 percent decline (practically the same as the national figure) directly hit tourism and retail.

For 2021, Colliers Philippines is projecting an 18 percent vacancy in Metro Cebu’s offi ce spaces. It expects, however, that rates in key business districts like Cebu IT Park will recover fastest.

When the vaccine rollout allows confidence to pick up, the safety and sustainability measures we’ve adopted in the Cebu Business Park and Cebu IT Park will keep them in high demand.

Prudence has compelled CHI to pace the development of Seagrove in Lapu-Lapu City and Gatewalk Central in Mandaue City in 2020. Yet we continued to develop South Coast City in Cebu City’s South Road Properties, where we broke ground in January 2020. There will be plenty of room to grow when this pandemic abates.

 

Strategies

WORKING TOGETHER WITH STAKEHOLDERS TO ENSURE MUTUAL BENEFIT

We continue to emphasize sanitation protocols, preparedness, and property management as part of our commitment to the well-being of all our tenants and customers. High customer satisfaction feedback on how we sustained COVID-19 precautions within our office buildings reinforced an already strong relationship with our tenants.

We pivoted as quickly as possible so that services to our retail, office, and residential customers would proceed smoothly, yet safely. Responding to the changing needs of our stakeholders remains a crucial part of the trust that keeps our relationships strong.

 

PREPARING OUR ESTATES FOR POST-PANDEMIC DEMAND GROWTH

While we paced the work on our Gatewalk Central and Seagrove estates as part of fiscal prudence, land development on South Coast City in the South Road Properties continued all throughout 2020. The decision to develop this block will serve the needs of committed buyers.

When it is feasible to do so, work on Gatewalk in Mandaue and Seagrove in Lapu-Lapu City will be ramped up. Your company’s commitment to create these new growth districts will support Cebu’s efforts to recover from the economic impacts of the pandemic. It will help disperse opportunities to more areas of the province.

CHI is in a good position to capitalize on opportunities as the market starts picking up. We have various projects in the pipeline, and we’re innovating in our current estates so that we keep abreast of the changes in our communities’ priorities, habits, and needs.

 

CONSOLIDATION AND THE SUSTAINABLE USE OF OUR RESOURCES

Moving forward to a better normal will require that we continue to use all of our resources prudently.

The merger between CHI and our parent company Ayala Land, as well as other affiliates and subsidiaries, will create operational synergies and allow for more efficient funds management. This consolidation is one of the ways we will adapt as an organization to better position ourselves for the many opportunities that have emerged.

 

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OUR GALLERY