Cebu’s office market ended 2025 with its lowest vacancy rate in five years, driven by strong demand from IT-BPM firms and traditional companies, according to a year-end report by CBRE Philippines.
Overall office vacancy in Cebu fell to 11 percent by the fourth quarter of 2025. Both IT Parks and Business Parks reached single-digit vacancy levels for the first time since 2020.
Vacancy in IT Parks dropped to 6.4 percent, while Business Parks recorded 7.3 percent. CBRE said this made Cebu the tightest office market in the country as it enters 2026.
Strong office take-up in 2025
Total office demand in Cebu reached 128,500 square meters in 2025, a sharp increase from the previous year. This was supported by 84 recorded transactions and a bigger average deal size of 1,498 square meters, up from 1,112 square meters in 2024.
The IT-BPM sector accounted for 76 percent of total office take-up. Traditional firms followed with 17 percent, showing continued expansion by outsourcing and shared services companies.
Developers achieve full occupancy
CBRE said Filinvest Land emerged as the top developer in Cebu after fully leasing Filinvest Cebu Cyberzone Towers 3 and 4. The company also filled space in the older Towers 1 and 2.
Three office buildings reached full occupancy in 2025: Faustina Center, Central Bloc, and Filinvest Cyberzone Cebu Towers 3 and 4.
New supply to test tight market
CBRE warned that tight market conditions may be tested soon, as nearly 90,000 square meters of new office space is set to enter the market in the first quarter of 2026. This includes a 60,000-square-meter office project by SM Prime at the North Reclamation Area, one of Cebu’s largest upcoming completions.
“With significant new completions coming online, particularly outside core districts, developers in fringe locations are likely to face pressure and may need to offer more competitive rental packages,” CBRE said.
Vacancy in fringe areas remains above 40 percent. Mactan vacancy is projected to reach 25.7 percent by the end of 2026.
Rents seen rising in prime areas
Despite the incoming supply, CBRE expects rental rates in prime Cebu locations to move higher. IT Parks and Business Parks may remain undersupplied compared with demand.
Fair market rents in Cebu Business Park and Cebu IT Park currently range from P550 to P900 per square meter. CBRE said incentives are slowly tightening as landlords regain pricing power.
CBRE added that Cebu’s strong performance in 2025 contrasts with other provincial markets, where office demand has weakened over the past three years. The rebound highlights Cebu’s growing role as an expansion hub for global firms seeking talent outside Metro Manila./ KOCCEBU’S office market closed 2025 on a strong note, with vacancy rates falling to their lowest level in five years, driven by robust demand from information technology-business process management (IT-BPM) firms and traditional occupiers, according to the latest Year-end 2025 Market Monitor released by CBRE Philippines.
CBRE reported that overall office vacancy in Cebu declined to 11 percent by the fourth quarter of 2025, with both IT Park and Business Park entering single-digit vacancy territory for the first time since 2020.
IT Park vacancy stood at 6.4 percent, while Business Park recorded 7.3 percent, underscoring Cebu’s position as the tightest office market in the country heading into 2026.
Office demand in Cebu reached 128,500 square meters in 2025, a sharp increase from the previous year, supported by 84 recorded transactions and a higher average transaction size of 1,498 square meters, up from 1,112 square meters in 2024. The IT-BPM sector accounted for 76 percent of total take-up, followed by traditional firms at 17 percent, reflecting continued expansion by outsourcing and shared services companies.
CBRE noted that Filinvest Land emerged as the top developer in Cebu, after fully leasing Filinvest Cebu Cyberzone Towers 3 and 4 during the year, while also backfilling older inventory in Towers 1 and 2. Three buildings — Faustina Center, Central Bloc and Filinvest Cyberzone Cebu Towers 3 and 4 — achieved full occupancy in 2025.
However, the brokerage warned that the market’s tight conditions may be tested in the near term, as nearly 90,000 square meters of new office supply is expected to enter the market in the first quarter of 2026. This includes SM Prime’s 60,000-square-meter office development at the North Reclamation Area, one of the largest upcoming completions in Cebu.
“With significant new completions coming online, particularly outside core districts, developers in fringe locations are likely to face pressure and may need to offer more competitive rental packages,” CBRE said. Vacancy in fringe areas remains elevated at over 40 percent, while Mactan vacancy is projected at 25.7 percent by year-end 2026.
Despite the incoming supply, CBRE expects rental rates in prime Cebu locations to trend upward, as IT and Business Parks could remain undersupplied relative to demand. Fair market rents in Cebu Business Park and Cebu IT Park currently range from P550 to P900 per square meter, with incentives gradually tightening as landlords regain pricing power.
CBRE added that Cebu’s performance in 2025 contrasted sharply with other provincial markets, where office demand has generally softened over the past three years. The strong rebound highlights Cebu’s growing role as a strategic expansion hub for global firms seeking high-quality talent outside Metro Manila. / KOC