Metro Cebu office stock to go up by 24% this year

CEBU, Philippines - Colliers International expects office stock in Metro Cebu to grow 24 percent this year as additional office spaces will be introduced in the property market.

A research by Colliers said that 14 new office buildings in Cebu were expected in 2015, adding near 154,000 square meters of available space to current stock.

In the first half of 2015, overall vacancy in Cebu's office property market increased to 9.07  percent due to completions of several office buildings, according to the property consultancy firm.

Office stock in Metro Cebu is expected to hit 802,500 square meters this year, growing by 23.8 percent from 648,400 square meters achieved in 2014.

In the first half of the year, a little over 100,000 square meter of office spaces were added in the market while take-up hit almost half of the total new supply.

"As of the end of 2014, the total office stock in Metro Cebu grew by 11.3 percent annually for the past five years. It also grew by 10.8 percent between 2013 and 2014," Colliers noted.

The consultancy firm said the office stock in the metro is seen to jump by 44 percent between 2014 and 2017 when it expects stock to reach over 900,000 square meter.

"Developers may be too bullish with their office construction," Julius Guevara, director for research and advisory at Colliers, said.

MARKET DRIVER

According to Colliers, business process outsourcing (BPO) companies still account for more than half of office property market.

The BPO industry is seen to continue to buoy the office space sector as BPO firms continue to demand ready-to-use office buildings in locations where there is an ample supply of talent like Cebu.

In an earlier interview, Martin Philip S. Yeung, president and CEO of Cebu-based MSY Holdings Corp., said that office space has become a necessity in the ever growing corporate world in Cebu.

"The demand [for office] is definitely there," Yeung told The FREEMAN.

Moreover, Colliers also said that over 407,000 square meters of new retail space can be expected over the next three years in Metro Cebu.

The retail space supply in the first half of this year in Cebu reached 312,100 square meters.

Colliers further added the increasing incomes in Cebu have attracted foreign brands to come in, citing the expansion here of retailers Zara, Primer Group and SSI.

New retail spaces are also expected from the upcoming big retail establishments such as the Robinsons Galleria, SM Seaside, City de Mare and Plaza Magellan. — Carlo S. Lorenciana (FREEMAN)