Metro Cebu office space vacancy rate hits 2.8%

CEBU, Philippines - Despite the sizeable supply of office space last year, the vacancy rate in the metropolitan district dropped to 2.8 percent this year from 5.5 percent rate in 2011.

In the latest report of Colliers International, both local and major developers increased their project portfolios that delivered over 80,000 square meters of new office space in 2012 with roughly 150,000 square meters more which are due for completion from this year to 2014.

Proven by the escalating number of entries of BPO firms in Cebu, the continuing interest of investors in the property market led to the rapid developmental expansion particularly in the office segment.

Colliers, however, noted that the decline in the vacancy rate is mainly attributed to the strong demand for centralized locations such as the Cebu Park District.

It cited that a decrease of five percent in vacancy in Cebu IT Park lowered the rate to 1.5 percent. It also declined by 3.2 percent year-on-year in Cebu Park District.

The vacancy rate in the uptown area and Osmeña Boulevard, on the other hand, increased to 5.8 percent, posting a growth of 2.3 percent year-on-year.

In terms of rental rates, Cebu Business Park has an average rate of P450 per square meter a month in the end of 2012.

While in Cebu IT Park and uptown area, monthly rents posted generally the same that range from P500 to P700 and P300 to P500 per square meter respectively.

“Cebu has further attracted offshore and outsourcing firms to its pioneering business hub, the Cebu Park District, consisting of Cebu I.T. Park and Cebu Business Park,” the global real estate market update report stated.

To date, Cebu has over 60,000 engaged employees in the IT-BPO industry that is estimated to represent over 250,000 to 300,000 square meters of the office stock in metro Cebu.

Among those firms that have established a footprint in the region include Accenture, ACS, Convergys, Lexmark Research & Development Corp., JP Morgan, Fluor Daniels, Aegis People Support, Teletech and Sykes Marketing.

Last year, some of the new offices delivered were the Aegis People Support Phase 2, Skyrise 4, One World Center, Calyx Center, J Centre, GAGFA IT Center, Apple One, and Creativo 2.

While for this year, Colliers cited that over 40 000 square meters of new office space is expected to be developed which will consist of 2 Quad in Cebu Business Park, The Link and Ebloc 3 to be situated both in Cebu IT Park. /JOB (FREEMAN)