CEBU is emerging as one of the tightest office markets in the country, with Cebu IT Park already shifting into a landlord’s market as vacancy rates plunge and lease rates climb.
Real estate services firm Leechiu Property Consultants (LPC) said only 36,000 square meters (sq.m.) of space remain available in IT Park, bringing the vacancy rate down to six percent. The crunch is so severe that contiguous blocks of 5,000 sq.m. — often sought by outsourcing firms — are no longer on offer.
“With Cebu IT Park reaching saturation, the market is tightening faster than expected,” said Philip Anonuevo, executive director for commercial leasing at LPC. “This reflects the city’s growing attractiveness to information technology-business process management locators.”
Anonuevo said the squeeze is forcing companies to consider Cebu Business Park, where vacancy remains higher but is expected to narrow once IT Park fills up.
In the longer term, he said the development opportunities are opening up in South Road Properties (SRP), Mandaue’s North Reclamation Area, Babag Island and Mactan. These locations are accessible by public transport, though employers still prefer IT Park and Business Park for talent attraction.
Moreover, Anonuevo said the shortage is driving up rents.
In Cebu, lease rates range from P550 to P700 per sq.m. per month, compared to P450 to P550 per sq.m. per month in Luzon. Some fitted offices are commanding as much as P900 per sq.m, signaling companies’ willingness to pay premiums for prime locations and plug-and-play spaces.
LPC estimates Cebu currently has about 250,000 sq.m. of available office space citywide, but much of this is scattered outside the core districts. If the market consistently absorbs 100,000 to 120,000 sq.m. annually, Anonuevo said overall vacancy could fall below 10 percent by 2028.
For developers, Cebu presents both a challenge and an opportunity: IT Park and Business Park are running out of room, creating pressure to accelerate projects in SRP, Mandaue, and other emerging hubs.
For tenants, the task will be securing large blocks of space in a market where landlords are increasingly in control. / KOC