Cebu office vacancy eases to 27.7% in Q2

CEBU, Philippines — Office vacancy in Cebu improved to 27.7 percent in second quarter 2022, from 29.0 percent previous quarter.

The improvement of occupancy rate for office spaces is seen to continue towards the end of 2022, reported Colliers Philippines.

Vacancy rate in Cebu is seen to drop further to about 24.7 percent before the end of 2022, led by robust expansion activities of Business Process Outsourcing (BPO).

“Cebu remains as the preferred business starting point outside Metro Manila as seen in its strong transactions activity. The abundance of quality office spaces, coupled with its competitive talent pool and good infrastructure, will continue to attract IT-BPM locators and other occupiers in the province,” said

Patricia Cruz, Associate Director of Office Services – Tenant Representation.

According to Cruz, Metro Cebu remains a viable business starting point outside Metro Manila as seen in its strong office transactions activity, notably from BPO firms.

She said Metro Cebu will continue to attract IT-BPM and traditional corporate occupiers thanks to the abundance of quality office spaces, good infrastructure, and rich talent pool.

Colliers data showed that Cebu was the most active provincial site in terms of BPO leasing in the first half of 2022, while the completion of new office towers and continued absorption from outsourcing and traditional corporate tenants should sustain office leasing recovery in Cebu.

Likewise, Colliers report revealed that in first half of 2022, BPO firms dominated office deals with net take-up expected to reach 74,900 square meters by the end of 2022.

Approximately 245,300 square meters of new office space is expected to be delivered from 2022 to 2024, with the Cebu Business Park and Cebu IT Park covering close to half of the new supply during this period.

On the other hand, rentals are expected to grow by about three percent annually in the next three years as pickup in leasing activity increases from outsourcing and traditional occupiers.