METRO Cebu’s office property market surged in the first quarter of 2025, reversing a subdued end to 2024 as demand from outsourcing firms and traditional corporate tenants drove a sharp recovery in transactions, according to real estate consultancy Colliers Philippines.
Office space take-up in Cebu jumped 150 percent quarter-on-quarter to 20,000 square meters in the first quarter of 2025, accounting for 36 percent of all provincial office transactions nationwide. The rebound followed a cautious fourth quarter 2024, when global macroeconomic uncertainty — including US election jitters and tariffs — prompted firms to delay real estate decisions.
“The Metro Cebu office market is off to a good start in 2025,” said Kathlyn Atillo-Relatos and Ohara Rosales of Colliers. “The IT-BPM sector remains the main driver, with expansion and new setups making up the majority of deals.”
Total office transactions across the Philippines reached 55,000 square meters in the first quarter. Cebu remains the top office destination outside Metro Manila, supported by a strong supply of Grade A buildings, a skilled talent pool and relatively low operating costs.
Vacancy edges up on new supply
Despite the rise in take-up, Metro Cebu’s overall vacancy rate climbed to 21.2 percent in the first quarter of 2025 from 20.5 percent at end-2024. The increase is largely attributed to new completions in Cebu IT Park, including Filinvest’s Cyberzone Towers 3 and 4.
More than 110,000 square meters of additional office space are expected in Cebu by year-end, with upcoming completions in North Reclamation Area, Mactan, Fuente Osmeña, South Road Properties and Uptown Cebu. Colliers expects vacancy levels to remain elevated as developers deliver new inventory, although active pre-leasing may offset some of the slack.
A key trend underscoring Cebu’s market resilience is the return of pre-leasing activity. Major IT-BPM tenants are securing office space in advance, including in buildings still under construction, reflecting long-term confidence in the region.
Filinvest’s newly completed towers have seen significant pre-leasing commitments from outsourcing firms catering to North American and Asia-Pacific markets. These early sign-ups pushed net take-up into positive territory at 13,000 square meters, reversing the -4,000 square meters recorded in the fourth quarter of 2024.
“The resurgence of pre-leasing highlights Cebu’s position as a long-term outsourcing hub,” Colliers noted. “Occupiers are positioning themselves for growth while landlords are gaining renewed confidence to proceed with pipeline projects.”
Seat leasing, or flexible workspace arrangements, are also gaining momentum in Cebu. The model allows companies — especially BPOs — to lease fully fitted office space without significant upfront capital outlay.
With about 70 percent of Cebu’s available office stock delivered in bare-shell or warm-shell condition, flexible office options are emerging as a preferred solution for cost-sensitive tenants. Flex space vacancies are holding at just 13 percent, well below the 21.2 percent average in the traditional office market.
Flex operators, both established and new, are expanding across Cebu to capture the rising demand for plug-and-play solutions.
Outlook
Colliers expects office demand in Cebu to remain strong through the rest of 2025, mirroring early-stage growth seen in Metro Manila’s rise as a global outsourcing destination. With a high volume of new stock entering the market, conditions continue to favor tenants.
Colliers advises occupiers to take advantage of pre-leasing opportunities and upcoming building inventory to secure favorable lease terms and tailor-fit spaces. Landlords, meanwhile, are urged to adapt to evolving tenant preferences by offering flexible lease structures, competitive pricing and partnerships with flexible workspace providers to reduce vacancy duration and activate underutilized inventory.
“Cebu’s office market has regained momentum,” Colliers said. “The mix of sustained IT-BPM growth, strong infrastructure and increasing developer confidence sets the stage for continued expansion well into 2025.” / KOC