Sunday, September 26, 2021

Office vacancies ‘unique to Cebu City’

FOLLOWING a study that revealed Cebu’s high vacancy rate of office spaces, the developers of the Mactan Newtown in Lapu-Lapu City believe the high vacancy rate of office spaces in Cebu is unique to Cebu City.

In a press conference yesterday, Megaworld senior vice president Jericho P. Go noted that this could be due to the high rental rates of office spaces in Cebu City, which is already at par with office developments in Metro Manila which is playing between P550 and P650 per square meter per month.

“It dampens the interest (of BPO companies) because rental rate is becoming too costly in Cebu City,” Go told reporters.

Last week, real estate services firm KMC MAG Group revealed in a study that Cebu posted the highest vacancy rate of 12.8 percent in the first quarter of the year among office markets such as Makati Central Business District, Bonifacio Global City, Bay Area, Ortigas, Alabang, and Quezon City. Based on the KMC MAG Group study, Makati posted the lowest vacancy rate of 2.4 percent.

Go said this could be brought down to a single-digit figure by offering competitive rental rates and bringing big-ticket BPO names to Cebu. For instance, Go said Megaworld offers “lower” rental rates versus those offered in office spaces in Cebu City, but refused to disclose amount details.

In addition, bringing in top BPO names in the country that have the capacity to start massive expansions in Cebu could bring down the vacancy rates, Go added.

“Using our Mactan Newtown development, we have consciously, in terms of price points, lower (the rate) especially when we have long-term partners. We will continue to do that so the vacancy rate on average (in Cebu) will be lower,” Go said.

In an announcement yesterday, the Megaworld official said Concentrix, a US-based company, will start its BPO operations at the Mactan Newtown in the second half of the year.

Concentrix Philippines country leader David Brooks said the company will initially employ 500 people within the year.

The firm, whose services include voice, email, and chat support that span across multiple industries like banking, insurance, automotive and healthcare, will locate in a 2,600-square-meter space covering the entire second floor of Tower 3 of 8 Newtown Boulevard.

Concentrix will be the fourth BPO company to open its Cebu operations in Mactan Newtown, following the entry of The Results Companies, Enfra USA, and Manulife.

Concentrix first started its Philippine operations in Metro Manila in 2007 employing 20,000 workers, the second largest operations after India, which is employing 28,000 workers. The company is present in 25 countries with 70,000 total number of employees globally.

“We are always looking to expand in other locations. Cebu has always been in the periphery,” said Brooks, noting business continuity as the factor for expansion.

At the Mactan Newtown, total office space inventory is currently at 46,000 square meters, which is expected to generate between 8,000 and 12,000 jobs by the end of the year.

There are already six completed office towers in the Mactan Newtown, namely, One World Center, Two World Center, and the four towers of 8 Newtown Boulevard. Within the next two years, Megaworld said it is expecting to complete Tower One Plaza Magellan and Pacific World Tower. This will bring the total office space inventory in the P30-billion township to 80,000 square meters by the end of 2018.

Go said half of the 30-hectare township has already been developed.

The developer is expecting to generate P11 billion in rental revenues for hotel, office, and retail spaces this year across its 20 townships nationwide. Go said 80 to 90 percent of the revenue is fueled by its Metro Manila developments and the remaining share is generated by its regional townships in Cebu, Iloilo, Bacolod and Davao.

In the next five years, however, Go said the share for its regional project is expected to grow by 20 to 30 percent as more buildings are slated for completion.

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