CEBU’S office vacancy rate fell to 15.9 percent in the second quarter from 17.7 percent a year earlier, as limited new supply and sustained demand tightened available space in the city’s major business districts, property consultancy Colliers Philippines said.
Vacancy in Cebu Business Park (CBP) declined to 10.9 percent from 13.9 percent a year earlier, while vacancy in Cebu IT Park (CITP) fell to 13.9 percent from 15.4 percent, highlighting the growing scarcity of quality office space in the city’s established business hubs.
Cebu recorded 19,300 square meters (sq.m.) of office transactions in the first half, making it the second most active submarket outside Metro Manila after Iloilo and accounting for nearly a third of transactions in areas outside the National Capital Region.
However, transactions were down sharply from 87,300 sq.m. a year earlier, mainly due to limited office availability in prime locations and uncertainty from geopolitical tensions in the Middle East.
The outsourcing sector accounted for 75 percent of Cebu’s office transactions in the first half, while traditional firms comprised the remaining 25 percent. Expansion was the main reason for leasing, accounting for 43 percent of transactions.
CBP accounted for the largest share of transactions at 45 percent, followed by CITP at 24 percent and the CBP Fringe at 15 percent.
Among notable deals were office take-ups by Mercedes-Benz, Dyninno, Logix BPO and Cebu Tele-net Philippines in CBP and CITP, despite tightening vacancies in the two business districts.
Colliers expects 164,600 sq.m. of new office space to be completed in Cebu this year, with nearly all new supply coming from Reclamation and Mandaue.
Projects expected to be completed include Grand Tower Cebu, Astra Corporate Center and SM City Cebu Towers 1 & 2.
From 2026 to 2029, the consultancy projects average annual office completions of 47,400 sq.m., which should help address the shortage of large floor plates and contiguous spaces.
Net take-up reached 10,000 sq.m. in the first half, down from 74,800 sq.m. a year earlier. Colliers expects full-year net take-up to reach 45,000 sq.m.
“The limited availability of office space in Cebu’s major CBDs is becoming a defining feature of the market,” Colliers said, noting that demand from outsourcing firms seeking expansion continues to outpace the supply of quality space in CBP and CITP.
It said occupiers may need to secure expansion requirements earlier or consider emerging office locations outside Cebu’s traditional business districts as vacancies tighten further. / KOC