Just like in Metro Manila, the Cebu office market, in particular in the cities of Lapu–Lapu, Cebu and Mandaue, is heavily driven by the business process outsourcing (BPO) industry.
According to a recent study by Pinnacle Real Estate Consulting Services, there are more than 120,000 employees in the Cebu BPO industry or around ten percent of the country’s total.
Pinnacle noted the Philippine BPO industry grew by an annual average of 20 percent in the past decade and that in the next five years, industry experts are forecasting a growth range between 12 to 18 percent. World-wide, the projected BPO growth for the coming years is a steady six percent, it said.
The research revealed that by the end of 2016, close to 900,000 square meters of Grade A office spaces comprise the office market in Metro Cebu which is about a 50-percent growth in the past four years, or an average annual growth of 12 percent. Four years before that, from 2009-2013, the average growth is 15 percent.
While the growth is slightly slower, it reflects the maturing market and the Philippine office market in general, Pinnacle director for research and consulting Jojo Salas pointed out.
In 2013, the vacancy was 2.45 percent, growing to 7.9 percent in 2014, 11.5 percent in 2015 and 17 percent at present.
But Pinnacle noted that rents would show that the market is absorbing the increasing office stock, with the weighted average rent of Grade A office in Metro Cebu at P550 per sqm per month, a 21-percent increase compared to the weighted average rent of P455 per sqm per month in 2013.
The estimated weighed average rent in 2014 was P495 per sqm per month, and in 2015 it was P525 per sqm per month, it added.
Meanwhile, Pinnacle said the Metro Cebu residential market has shown a phenomenal growth in the past four years, solidifying the acceptance of Cebuanos to “condo-living.”
The Cebu market now has around 22,284 residential condominium units, 148 percent more than the 9,026 units in 2013. In addition, an average of 5,000 units will be delivered in the next couple of years, the study revealed.
Salas said that in terms of take up, the average take up is 5,000 condominium units annually in the past four years, meaning the projected increase may be comfortably absorbed by the market.
Also, stable increase in prices show the soundness of the sector. The average selling price in 2013 was approximately P84,000 per sqm; in 2014, P90,000 per sqm; and in 2015, P95,000 per sqm. At present, the estimated average selling price is P99,000 per sqm, or an 18-percent increase from its 2013-level, he added.
Pinnacle likewise mentioned in its report that the Cebu retail market, typically composed of mall spaces, and in recent years, commercial spaces in office and residential buildings, is robust and is being led by home-grown leaders like Gaisano Group and the strong presence of national players.
Due to the rapid growth in retail spaces, vacancy increased in the past four years, from 2.55 percent in 2013, to just two percent in 2014, and then rising to 12 percent when more than 200,000-sqm of retail spaces were offered to the market.
Salas said vacancy is now down to nine percent, since the market is steadily absorbing the vacant retail spaces. Retail rents have risen from P600-P1,200 per square meter per month last year to P700- P 1,300.
Pinnacle emphasized that overall, the Metro Cebu real estate market is very developed and has reached its maturity, although there are still gaps in the market and some market inefficiencies that shrewd players may take advantage of.
It said the recently approved vertical socialized housing, and the increase in the price and loan ceiling of economic housing may extend the boom in the residential sector and that new township developments may spread out the centralized development in Cebu City. The industrial sector seems a looming winner as well, Pinnacle added.
Workers seek Duterte’s help
The National Printing Office Workers Association (Napowa) has recently asked President Duterte to put a stop to an alleged widespread corruption within the National Printing Office (NPO).
It is being claimed that printing job contracts are being awarded to favored printers and that since NPO assistant director Sherwin Prose Castañeda became bids and awards committee (BAC) head, no biddings have been conducted and that NPO operations have stopped because procurement, which is also under Castaneda’s control, has not been functioning efficiently.
They said a letter has been sent to both director Francisco Vales and Castañeda for an explanation, but no reply has been given.
The workers are alarmed by the scarcity of printing projects as this could cause the abolition of NPO. Napowa disclosed they have been printing only a few water district forms.
Napowa also asked Castañeda, who controls NPO’s finances, to reveal how much has been left of the P240 million left by the previous NPO administration, to no avail.
Recently, Castañeda informed the employees that he was able to get a P74-million contract to print the contribution payments forms of the Social Security System and that the NPO will print the forms in-house, when in fact, the contract has been given to four printers.
Napowa sources also revealed that Castañeda told all printers that he was the one calling the shots at the NPO and then introduced Rachel Bautista and Paul Candelaria, who have reportedly been asking P5 million in goodwill money from the printers.
They said that printing jobs which should be printed in-house were being awarded to favored printers by Castañeda.
Instead of confronting the issue squarely, Castañeda and the other BAC members resigned to divert the issue and instead accused Vales of pressuring Castañeda to renew the contract of Topbest Printing Corp., they said. But Vales has denied talking to the BAC.
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