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KMC Savills presents their latest Cebu Office Briefing 2Q 2017. The report provides the latest data on current and future office stocks, rental rates, vacancies and the development pipeline for the previous quarter.
- The overall vacancy rate in Cebu jumped to 8.2% from the previous quarter's 6.9%. This is due to the significant additions to the office stock - Philam Life Cebu and AD Gothong IT Center. Despite the Cebu Fringe maintaining relatively high vacancies, the vacancy rate has slowly declined due to improving demand conditions. Meanwhile, the very tight supply conditions were sustained in Cebu IT Park with vacancies held at 1.6% of stock.
- Cebu's rental performance improved to 1.4% YoY in 2Q/2017. Cebu IT Park led the resurgence in overall rents after outperforming other submarkets with an impressive 4.3% YoY increase. However, the declining occupancies in Cebu Business Park dragged rental performance after decreasing by -0.3% YoY.
- Although the upcoming 100,100 sq m is expected to push vacancies upward in the remaining quarters, we still expect the overall vacancy rate to hit slightly above 10.0% at the end of 2017. The outsourcing sector is still expected to drive demand, but we have observed that non-outsourcing players have entered certain submarkets which have started diversifying Cebu's sources of demand. We have yet to factor these in our estimates but may provide substantial upside to our forecast.
Read full report here.