KMC has recorded an overall increase in Cebu Central Business District’s office vacancy by the end of the first quarter of 2021, ending March with an almost 20% vacancy rate.
According to KMC Research, both Cebu IT Park (CITP) and the Cebu Fringe continued to lose tenants, greatly contributing to the recorded 19.2% vacancy rate. The 16,000 sq m office space occupied in the Mabuhay BPO Tower caused the vacancy to contract in the Cebu Business Park.
Moreover, rents remained to be in the downtrend for both CITP and the Cebu Fringe as landlords keep up with the increase in vacancies in both areas. On the contrary, office spaces within the Cebu Business Park posted a 0.3% higher rental rate.
The average rental rate for offices in the Cebu Central Business District finished at PHP 577.6 per sq m / month, 2.3% lower than the start of the pandemic a year ago.
Cebu’s major submarkets are expecting to have an increase of around 117,300 sq m of new Grade A office supply throughout the year. However, short-term demand is foreseen to remain muted as lessees deal with the current business environment brought by the COVID-19 pandemic.
On the other hand, we have observed a slight improvement in pre-leasing activity, with opportunities for businesses to occupy fresh spaces at current rates.
Get more in-depth property market insights from the KMC Team. Connect with Jeanne Cayabyab at (+63) 917-877-3214. For leasing inquiries, call us at (+63) 2-8403-5519 or send an email to [email protected]