Cebu’s office market is tightening as outsourcing firms and other occupiers move to secure expansion space earlier, with limited availability in the city’s established business districts pushing some tenants to consider emerging locations.
Joey Bondoc, head of research at Colliers Philippines, said strong occupier demand is outpacing the supply of quality office space in Cebu Business Park (CBP) and Cebu IT Park (CITP), making availability a growing concern for companies planning to expand.
“The limited availability of office space in Cebu’s major CBDs is becoming a defining feature of the market,” Bondoc said. Strong demand, particularly from outsourcing firms pursuing expansion, continues to outpace supply in the two prime districts, he added.
Colliers advised occupiers to secure expansion requirements early or explore emerging office locations outside Cebu’s traditional central business districts.
The tighter conditions are reflected in vacancy rates. Cebu’s overall office vacancy fell to 15.9 percent at the end of the second quarter from 17.7 percent a year earlier. Vacancy in CBP declined to 10.9 percent, while CITP stood at 13.9 percent.
The market recorded 19,300 square meters of office transactions in the first half, with outsourcing firms accounting for 75 percent of deals. Expansion requirements represented 43 percent of total transactions, suggesting that companies are securing additional capacity even as available space narrows.
Colliers expects 164,600 square meters of new office supply to enter the Cebu market this year, mainly in Reclamation and Mandaue. Projects include Grand Tower Cebu, Astra Corporate Center, and SM City Cebu Towers 1 and 2.
The incoming supply should provide some breathing room, particularly for occupiers seeking large floorplates and contiguous spaces. But Bondoc said premium offices in established CBDs are likely to remain highly sought-after in the near term.
For companies with growth plans, the message is increasingly straightforward. Waiting for the ideal space in Cebu’s prime districts could mean competing for a shrinking pool of options.
