Infra projects, decentralization thrust to benefit Cebu’s office space sector

CEBU CITY, Philippines—The government’s infrastructure projects and decentralization thrust will benefit Cebu’s office property sector since Cebu is the largest business destination outside Metro Manila, according to Colliers International, a global leader in commercial real estate services. 

As a result, this would entice more offshore gambling, business process outsourcing, knowledge process outsourcing and firms to set up shop or expand operations here, said Joey Bondoc, Colliers senior manager for research.

With this, Bondoc encouraged landlords to build office space that could accommodate non-outsourcing and traditional businesses that require smaller space.

He also urged developers to open more flexible workspace for small businesses and start-ups.

Noting that Philippine offshore gaming operations (POGO) would become one of the major contributors to office space absorption, Colliers projects that Mandaue would capture a share of the POGOs from Mactan.

Mactan, however, would continue to to be a hub for offshore gaming firms but the expansion of this firms would spill over to Mandaue City.

Another sector with great potential is the English as a Second Language (ESL) segment, which would register greater office space take up in the next 13 to 24 months.

The continued demand for office space from offshore gaming, outsourcing and ESL centers would sustain an annual net take up of around 146,600 square meters until 2021.

On the supply side, Colliers projected the delivery of 279,000 sq.m. new supply from 2020 to 2021. More than half of these would be likely located in Cebu City’s main business district.

On the other hand, rental rates are expected to increase by four percent at the IT Park and Cebu Business Park areas. /bmjo