KMC Savills is pleased to present the latest Cebu Office Briefing for 1Q 2017. The report provides current data on rental rates, vacancies, and supply pipeline in the Cebu Fringe, Business Park and IT Park for the quarter.
- In 1Q/2017, vacancies in Cebu improved to 6.9% from 8.9% last quarter, as the additional supply was substantially overtaken by net absorption. Construction delays postponed a significant amount of new supply for the quarter, with just the MDCT building adding 5,000 sq m.
- Rental growth experienced a setback after posting 1.2% YoY growth and marginally increasing the average rental rate to Php 538.2 per sq m/month. Market expectations of a considerable stock increase in the coming quarters and the high vacancy rate in the Cebu Fringe put significant pressure on rents. However, the market's decreasing vacancy rate gradually improved rental performance as QoQ growth returned to positive territory.
- 132,000 sq m of additional supply is forecasted to enter the market until the end of 2017 with the anticipation of a modest upward push in vacancies. Furthermore, Cebu's outsourcing and offshoring sector has consistently experienced healthy growth and expected to absorb new supply with ease - especially in Cebu IT Park and Cebu Business Park.