RETAIL spaces in Cebu are experiencing growing vancancy rates in the recent years, a market study revealed.
Pinnacle Real Estate Consulting Services Inc., in its Cebu property market report, said retail spaces since with 2013 was at a low of 2.55 percent. This dipped to just two percent in 2014. It was in 2015 when vacancy rates increased to 12 percent.
The increase in vacancy rate was attributed to the major additions in mall developments, particular the SM Group that opened SM Seaside City at the South Road Properties (SRP), approximately offering 200,000 square meters of retail space in the Cebu market.
But Pinnacle said vacancy dipped again to nine percent at present since the market is steadily absorbing the vacant retail spaces.
Currently, Cebu has a footprint of 1.08 million square meters in commercial and retail spaces. This represents a 98 percent growth from the estimated 545,000 square meters of retail space in 2013, the property brokerage firm added.
In addition, rental rates have also shown strength in the local retail market. From rates ranging from P600 to P1,200 per square meter per month last year, Pinnacle observed that retail rentals range from P700 to P1,300 per square meter per month.
Meanwhile, in tourism properties, particular hotels, Pinnacle estimates that the Metro Cebu market has approximately 9,500 hotel rooms with star-classification.
The total stock grew by 22 percent from 7,800 rooms last year. The study found the average occupancy also grew from 85 percent to 90 percent year-on-year.
“In terms of room rates, deluxe hotels have an average room rate of P3,800 per night. There is an increase of nine percent, from P3,500 per night, even when new hotel rooms were opened to the public. The healthy occupancy and room-rate level bodes well for the Cebu hotel market,” it concluded.