CEBU, Philippines — Property owners, especially those who are renting out office spaces, are told to hold on to their units as demand is expected to surge specifically for Cebu.
Instead of selling office units that are now idle, Colliers Philippines Director for consultancy services Karla Domingo advised owners to hold on a little longer as Cebu is now one of the top locations of choice among companies for satellite and office offices, aside from the back-to-office mandate.
According to Domingo, office unit owners are bound to gain more in their capital values once the high vacancy rate recovers.
In Cebu, there are a total of 320,000 square-meter vacant stock as of end of 2021.
Prior to the pandemic in 2019, Metro Cebu vacancy rate was at 11.6 percent. It went up to 19.8 percent in 2020 at the height of lockdown and the onset of work-from-home arrangement.
In 2021, office vacancy rate in Cebu settled at 24.7 percent.
According to Colliers Philippines senior director for office services (tenants representation), in order to get ahead of the competition in re-attracting office spaces tenants, unit owners or building developers should go extra miles, like being flexible with technical requirements and handover condition based on tenants’ needs.
Unlike other urban cities particular within Metro Manila, office vacancy rate is much more manageable due to its least exposure to POGO (Philippine Offshore Gaming Operators).
Chinese POGO occupants, which filled most of the office buildings in Metro Manila, and few in Metro Cebu, left the Philippines when COVID-19 outbreak hit.
In 2021, provincial transactions accounted for 19 percent of total office transactions in the country.
“In our view, residential demand in Cebu will be anchored by increased office leasing activities,” said Colliers.
Cebu recorded the highest provincial deals in 2021 with 38,600 sq metres (415,500 sq feet) of transactions or 35 percent of total provincial office transactions.
Colliers encourages developers to respond to the potential demand for mixed-used communities which feature office towers, residential condominiums, malls and institutional facilities.
Colliers sees the completion of major infrastructure projects including Metro Cebu Expressway and Cebu Cordova Link Expressway (CCLEX) boosting the attractiveness of condominium projects within integrated communities in Metro Cebu due to rental prospects and potential for price appreciation.