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KMC Savills is pleased to present the latest Cebu Office Briefing for 3Q 2017. The report provides current data on rental rates, vacancies, and supply pipeline in Cebu's central business districts and submarkets for the previous quarter.
- The Cebu office market recovered in 3Q/2017 after the Cebu Business Park experienced a stark decline in vacancies. There were no new additions to supply during the quarter and net absorption further strengthened to 22,314 sq m. Conditions in the Cebu Fringe were relatively unchanged with the vacancy rate maintained at 17.1%. However, among the townships in the Fringe, we observed significant leasing activity in Mactan Newtown.
- With market conditions tightening in Cebu Business Park, rents recovered modestly from the negative growth posted last quarter. In addition, the very low vacancy rate in Cebu IT Park was sustained causing rentals to further improve. Average rents in the offshoring and outsourcing hub rose to Php 584.9 / sq m per month after posting a strong 4.8% YoY growth.
- Vacancies are expected to spike again next quarter as an additional 100,100 sq m of new GLA is expected to be completed. The Cebu Business Park is anticipated to add three more buildings next quarter - amounting to 42,700 sq m of GLA. Despite the submarket's impressive performance this quarter, the vacancy rate is expected to rebound to around 8.0% by the end of the year.
Please contact Michael McCullough or Fred Rara for more information on this report.