As motorbike business plateaus, Norkis turns to BPO-linked property devt

The Norkis Group of Companies is venturing into property development after its motorcycle business hit plateau due to market congestion, its top official said Friday.

 

The group sees a potential to grow in property development with the expansion of the business process outsourcing (BPO), Dr. Norberto Quisumbing Jr., Norkis Group chairman, told reporters in a briefing in Makati City for the launch of Norkis Cyberpark. 

 

"We're still in the transportation business, but the problem with that is being able to hire quality personnel to be able to continue in this kind of business... Most of them are going to the BPOs or leaving for abroad," he said.

 

"Not only that but the field is already crowded. So we're calibrating our growth. We don't expect high rate of growth in the transportation business as there're so many players," he added.

 

Norkis Group has been in the motorcycle manufacturing business for over 60 years and accounts for 15 to 20 percent of the market.

 

"We're not really that big. We're just one of the many players. There's the Chinese brands, Japanese, Thai. Although we already have good foundation in terms of our network of branches... but still it's a very tight field to operate in," Quisumbing said.

 

The group is developing a P6-billion PEZA-board approved Norkis Cyberpark in the company's 2.8 hectare property in Mandaue City, Cebu which will cater to the BPO industry.

 

Manila-based developer DEI Properties Inc. was hired to construct five office towers and a retail strip.

 

"So, we rather put our direction into this kind of field, which seems to be promising for employment," Quisumbing said.

 

In a briefing with reporters Thursday, real estate services company CBRE Philippines said the outsourcing sector will continue to expand in 2014, as American and European banks relocate back office operations in the Philippines.

 

The first six-story tower, Norkis One, and the The Arcade retail strip are expected to be completed by September 2014.

 

DEI chairman and CEO Danilo Ignacio said the first tower and the retail area are estimated to cost P325 million, which will be financed through equity and loans from BDO Unibank Inc., Metropolitan Bank & Trust Co., and Bank of the Philippine Islands.

 

"We are just starting leasing for this project. In Cebu, there is a 2 percent vacancy rate for office space. We're hoping demand for office space will continue to be high," he said.

 

Leasing prices were initially pegged at P300 to P400 per square meter, "slightly lower than those in Cebu City to attract investors."

 

In Tholons Top 100 Outsourcing Destinations for 2014 released Thursday, Cebu ranked as the eighth most important place for BPOs.

 

Since PEZA already removed developer incentives for Manila and Cebu City, Ignacio said they expect Mandaue City to attract more development projects that could drive demand for office space.

 

"The product is in Cebu, where – unlike in Manila – big lands are owned by locals and Norkis is well-known in the province," he said.

 

Following the natural calamities that hit Central Philippines, Quisumbing said consultants have designed Norkis Cyberpark with future calamities in mind. "The buildings and the development will be designed to ensure we are ready should something similar happen in the future,” he said.

 

“The Norkis Cyberpark project will help push development in the Mandaue City area as well as increase overall economic activity. At its completion, Norkis Cyberpark will help generate 38,000 jobs," Quisumbing said.

 

Founded by Quisumbing in 1962, the Norkis Group originally made motorcycles but has since expanded to industrial products, financial services, travel service and real estate. – VS, GMA News