BEING delisted from the Tholons list of top 10 supercities for outsoucing this year did not seem to affect Cebu City’s robust business process outsourcing (BPO) sector, according to the assessment of a property management firm.
In the recently released Cebu Q2 2017 Office Report of Colliers International Philippines, the office market in Cebu recorded strong takeup or absorbed spaces for the first semester, reaching 69,000 square meters, or 20 percent higher than the whole of 2016. BPOs cover 57 percent of total transactions.
“The strong takeup from both BPOs and offshore gaming companies in Cebu is a welcome development. Amid concerns of BPO slowdown, the Cebu market has remained resilient,” said Dom Fredrick Andaya, Colliers International Philippines director for office services.
In the first half, Colliers also saw a rise in demand for offshore gaming sites, an emerging office space demand driver, cornering 37 percent of total transactions.
For BPOs, Colliers said major tenants with new accounts in Cebu are Real Page, Ripe Concepts, Iploy, Channel Fix, and Weserv Systems, among others. This, despite Cebu’s ranking in the Tholons survey, which declined to 12th this year from 8th in 2016.
Rental rates in key business districts, namely Cebu Business Park and Cebu IT Park, hover between P450 and P850 per square meter per month, with newer buildings commanding higher rents. Over the next 12 months, Colliers anticipates a five percent increase in average rents given the limited supply in these business districts.
Meanwhile, average rental fees for office spaces in Mandaue City and Lapu-Lapu City are relatively lower at P475 to P550, and is not expected to increase anytime soon, given high vacancy levels in these areas due to accessibility issues limiting demand.
At present, overall office space vacancy in Cebu stands at 10 percent, except for Cebu Business Park and IT Park, whose vacancy remains tight at two percent combined, noted Colliers.
Over the next three years, the property management firm sees an addition of about 500,000 square meters of office spaces in Cebu, bringing the total inventory to 1.4 million square meters by 2020. However, Colliers said this will still largely be concentrated in Cebu Business Park and IT Park.
“Colliers sees the continuous growth of Cebu’s office market and we see this being complemented by the completion of crucial infrastructure projects,” noted Andaya.
With better accessibility expected after completion of infrastructure projects, Colliers recommends building projects in Mandaue and other parts of Cebu.
Andaya suggests that they still look around Cebu Business Park and Cebu IT Park as locations for their immediate office space needs, while keeping an eye on other parts of the province.