Cebu remains to be the next preferred location after Metro Manila for outsourcing firms and multinational companies, property consultancy Colliers said.
Net absorption of office space in Cebu last year reached 65,800 square meters (sq.m.) with new supply coming online at 60,200 sq.m., lower than the 89,800 sq.m. recorded the prior year.
Colliers said it expects net take-up to reach 72,000 sq.m. this year with demand mainly driven by traditional and outsourcing firms.
“In 2024, we project the delivery of 107,900 sq.m. of new office space with the reclamation area accounting for more than 50 percent of new supply,” it said.
Colliers said between 2024 and 2026, about 74,500 sq.m. of new space are expected to come online annually.
Cebu recorded a 0.4 percent increase in rents in 2023, but which are expected to stabilize this year as elevated vacancies and lukewarm demand likely to persist in key submarkets.
Vacancy continues to drop, reaching 20.4 percent in the fourth quarter of last year.
“In 2024, we expect vacancy to marginally rise due to the substantial completion of new office space,” Colliers said.
The property consultant pegged vacancy this year at 21.3 percent.
“Colliers believes shared services, healthcare companies and other multinational firms are likely to occupy more office spaces in this location,” it said.
It, however, expects the office segment of Cebu to be a tenant-leaning market.
“This should provide an opportunity for tenants to take advantage of the better quality of office buildings, skilled labor pool and improved infrastructure,” it said.
“Landlords should remain proactive in improving their occupancy and develop higher quality buildings to address the demands of tenants who have become more discerning,” Colliers added.
