Metro Cebu vacancy rate dropped to 2.8% in 2011

CEBU, Philippines - Despite the substantial supply of office space in 2012, the vacancy rate in the Metro Cebu area dropped to 2.8 percent from 5.5 percent in 2011.

A report released by Colliers International revealed that the decline is mainly attributed to the strong demand for centralized locations such as the Cebu Park District.

A significant 5.0 percent decrease in vacancy was seen in Cebu I.T. Park, lowering the rate to 1.5 percent.

In Cebu Park District (formerly known as Cebu Business Park) vacancy also declined by 3.2 percent year-on-year, to 5.8 percent from 3.23 percent.

Meanwhile, rental rates grew by 11 percent (year-on-year) with an average rental rate of P450 per square-meter per month by end of 2012. In Cebu IT Park and Uptown/Osmeña Boulevard, rents have been generally the same year-on-year ranging from P500 to P700 and P300 to P500 per square meter monthly, respectively.

According to the report, investors and major developers have shown continuing interest in Cebu’s property market, leading to rapid developmental expansion, particularly in the office segment.

Originally, one of the established First Wave Cities declared by Business Process Association of the Philippines (BPAP), 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.

Based on the recent survey from Tholons Inc.’s ‘Top 100 Outsourcing Destinations 2013’, Cebu has continuously strengthened its position as a competitive business location for IT-BPO companies, rising through the ranks to secure the number-eight position this year.

At present, Cebu has over 60,000 engaged employees in the IT-BPO industry, which is estimated to represent over 250,000 to 300,000 square meter of Metro Cebu’s office stock. Accenture, ACS, Convergys, Lexmark Research & Development Corp., JP Morgan, Fluor Daniels, Aegis People Support, Teletech and Sykes Marketing are some of the firms that have established a footprint in the region.

With the increasing entries of BPO firms in Cebu, both local and major developers have ramped up their project portfolios, delivering over 80,000 square meters of new office space in 2012 with roughly 150,000 sq m more due for completion from 2013 to 2014.

Some of these new offices delivered last year are Aegis People Support Phase 2 (10,100 sq m), Skyrise 4 (16,500 sqm), One World Center (6,500 sq m), Calyx Center (5,100 sq m) J Centre (9,200 sq m) GAGFA IT Center (20,300sq m) Apple One (7,400sq m) Creativo 2 (5,600sq m). For 2013, over 40,000 sq m of new office space is expected, consisting of 2 Quad (13,000 sq m) in Cebu Business Park, The Link (13,300 sq m) and Ebloc 3 (14,900 sq m) both in Cebu I.T. Park. /JOB (FREEMAN)