Metro Cebu is still in the radar of information technology-business process management (IT-BPM) companies that are planning to expand in the country, according to an executive of Colliers Philippines.
With an absorption rate of 7,900 square meters, Colliers Philippines Research Director Joey Roi Bondoc said Tuesday that the Queen City of the South led other provincial sites in terms of office space take-up in the first quarter.
Bondoc said this is a positive development for the province amid lower deals registered for all major outsourcing destinations outside Metro Manila.
“We expect net take-up to reach 40,000 square meters for the entire 2023,” he said, citing the results of the latest Colliers Radar study.
The professional services and investment management firm said 41,400 sq m of new office space were delivered from January to March.
The upswing is seen to continue in the next couple of years since all the IT-BPM workers have already returned to office even before the World Health Organization declared last month that Covid-19 is no longer a global health emergency.
“Between 2023 and 2025, we expect the annual delivery of 91,300 square meters of new office, with the Cebu Business Park and Cebu IT Park covering 51 percent of this new supply,” Bondoc said.
Meanwhile, office vacancy remains elevated quarter-on-quarter at 23.2 percent as of the first quarter compared to 21.7 percent in the fourth quarter of 2022 due to new supply coming online.
Lease-wise, Colliers posted a marginal decrease in rents in the first three months of this year.
“By end-2023, we expect rents to drop by about 2 percent due to new supply as well as muted pre-leasing in upcoming buildings,” Bondoc said.
For Kevin Jara, associate director of office services-tenant representation at Colliers, Metro Cebu is ripe for shared services and multinationals as they leverage on the current skilled labor and infrastructure.
“With this, landlords should capture the demand by introducing high quality office buildings in their pipeline,” he said.
Existing occupiers nationwide, according to Colliers, may also keep tabs on Cebu for their business continuity plans.
Colliers said landlords must remain proactive in chasing major occupants that are searching for expansive and new office spaces, as well as sustainable buildings.