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It’s more fun again: Cebu property market is ready to impress

Cebu, Metro Cebu, Cebu property market, Lapu-Lapu, Mandaue

First-time visitors will be impressed by Metro Cebu’s highly developed urban landscape. It has well-established business districts, sprawling shopping malls, chain-branded hotels and MICE facilities, newly constructed transport infrastructure, not to mention a vibrant IT-BPM industry that has afforded this metro area of close to 3 million residents ample employment opportunities and economic growth.

 

The second largest metropolitan area in the Philippines in terms of land area and the third largest in terms of population, Metro Cebu is the main urban center and economic hub of the province of Cebu and the Central Visayas region. Comprising seven cities and six municipalities situated along the central eastern portion of the main Cebu Island, this urban agglomeration of more than 3 million people is home to 80% of the country’s shipping companies, the busiest domestic seaport, and the second busiest airport.

Metro Cebu’s three most important cities are Cebu City, the provincial capital and arguably its commercial core; Mandaue, which is located southeast of Cebu City and hosts most of the metro area’s manufacturing and industrial facilities; and Lapu-Lapu in nearby Mactan Island, which is home to the Mactan–Cebu International Airport, considered the Philippines’ second most important international gateway. Together, these cities comprise 65% of the metro area’s total population.

For years, Metro Cebu has been an important location for the business process outsourcing (BPO) sector. Its rich supply of talent thanks to its high population and presence of top colleges and universities; its reputation as Tholon’s highly rated outsourcing destination; and substantial supply of PEZA-registered offices are few of the charms that attract BPOs and businesses to locate here. This makes Metro Cebu such a vibrant office market. Colliers data show that as of end of 2021, the metro area has an office stock of approximately 1.3 million square meters, 92% of which are PEZA-registered; an additional 65,000 square meters are forecasted to be completed in 2022, and approximately 98,900 square meters in 2023. By the end of 2024, its total office stock will reach approximately 1.5 million square meters. Although vacancy rate is projected to remain at 24.7% in 2022, increasing level of office transactions is signaling a gradual return to positive territory. In fact, in 2021, Metro Cebu recorded net office take-up of 35,000 square meters.

Unique market

First-time visitors will be impressed by Metro Cebu’s highly developed urban landscape. Akin to Metro Manila’s Makati CBD and Bonifacio Global City, Cebu Business Park and Cebu IT Park are the metro area’s main business districts and are home to close to 1 million square meters office spaces as of end of 2021, Colliers data shows. These important locations house majority of Metro Cebu’s BPO and KPO firms, in addition to the regional headquarters of many of the country’s most important companies.

Transport infrastructure in Metro Cebu and the rest of the province has also been rapidly improving. For years, the main island’s only connections to Mactan Island, where the airport is located, are Marcelo Fernan and Osmeña Bridges. But 2022 saw the opening of the 8.9-kilometer Cebu–Cordova Link Expressway (CCLEX), also known as the Cebu–Cordova Bridge, which has eased travel time between downtown Cebu City and Mactan Island. Upon its completion the bridge expressway reduced travel time from Cebu City to Mactan–Cebu International Airport by approximately 40 minutes.

061022_Picture1Cebu–Cordova Link Expressway (CCLEX). Photo via Shutterstock. 

The airport, too, is getting a much-needed rehabilitation. In 2018, it opened its second terminal, which now services the airport’s international flights and increasing its passenger capacity to 12.5 million per year. A second runway is also in the works, which once completed will significantly increase the airport’s capacity. Two other big-ticket transport infrastructure developments in Metro Cebu currently in the pipeline include Cebu Bus Rapid Transit System and the Metro Cebu Expressway.

Metro Cebu’s healthcare and educational institutions are also highly developed, which makes it an attractive destination among expat workers and foreign students. Aside from government-run tertiary hospitals (Vicente Sotto Memorial Medical Center and Cebu City Medical Center), it also has well-established private healthcare facilities, including Chong Hua Hospital, Cebu Doctors’ University Hospital, University of Cebu Medical Center, Perpetual Succor Hospital, and Cebu Institute of Medicine Hospital, among others. Universities and other institutions for higher learning attract students not just from neighboring provinces but from other countries as well, providing Metro Cebu with a rich pool of highly skilled talent. Reputable Metro Cebu-based tertiary schools include the University of Cebu, University of San Carlos, University of San Jose–Recoletos, University of the Visayas, and the local campus of the University of the Philippines.

While Metro Cebu’s urban landscape resembles that of Metro Manila, albeit in a smaller scale, this metropolis has its other unique charms. Its downtown core and business districts are just a short drive away from Mactan Island, which is home to white-sand beaches and high-end resorts – its one unique advantage over Metro Manila. This makes Metro Cebu an attractive and highly viable MICE destination as it offers a combination of convention facilities and exciting leisure.

The presence of the aforementioned business districts – Cebu Business Park and Cebu IT Park – supports Metro Cebu’s position is an established and important market, especially in the IT-BPO sector. PEZA-accredited Grade A office buildings abound not just in these CBDs but also in fringe locations, giving occupiers plenty of options. Locations outside these CBDs that have gotten a lot of buzz include Mactan Newtown in Lapu-Lapu, City de Mare in Cebu South Road Properties, and Bonifacio District in Brgy. Kasambagan, among others.

061022_Picture2Cebu Business Park. Photo via Shutterstock. 

In this article, Colliers’ Office Services – Landlord Representation has put together a list of office buildings in Metro Cebu well-suited for any type of business: from BPOs to traditional corporate occupiers and government agencies.

061022_Picture3Cebu IT Park. Photo via Shutterstock. 

Cebu Exchange

One of the new Cebu City buildings Colliers represents is Cebu Exchange, touted as the biggest sustainable office building in Visayas and Mindanao. Situated at the gateway of Cebu IT Park, this elegant and efficiently designed office building by ArthaLand boasts cutting-edge sustainable features, wellness amenities, and abundance of green elements making it a unique and prestigious addition to Cebu’s office market. Cebu Exchange offers close to 90,000 square meters of Grade A office space and is pre-certified for LEED Gold and is on track for WELL, BERDE, and EDGE certifications.

061022_Picture4Cebu Exchange

Faustina Center

Located in the exciting Bonifacio District in Brgy. Kasambagan, Faustina Center is a modern, dynamic, sustainable, and efficiently designed building well-suited for BPO firms and traditional corporate occupiers. Being PEZA-accredited, BPO firms who will choose to locate in this building will enjoy tax incentives from the government. This building offers more than 25,000 square meters of Grade B office space.

061022_Picture5Faustina Center

Grand Tower

Located in Cebu City’s North Reclamation Area just across SM City Cebu, Grand Tower offers 10 office floors with an approximate leasable space of 19,000 square meters. Located just 2 kilometers from Cebu Business Park, approximately 3 kilometers from Cebu IT Park, and about 30 minutes from the Mactan–Cebu International Airport.

Pioneer House

Pioneer House Cebu is a 10-storey office building located in Cebu Business Park. Owned and developed by Pioneer Insurance and Surety Corp., this PEZA-accredited, Grade B building offers more than 6,000 square meters of office space and is a stone’s throw away from Cebu Business Park’s leisure establishments, including Ayala Center Cebu.

061022_Picture6
Faustina Center

While Metro Cebu has traditionally been that sort of place people only visited for leisure and relaxation – thanks to its historical sites, white-sand beaches, and diving sites – it has quickly reinvented itself into a major real estate market, most notably in the office and MICE sector. So impressive was the growth of its IT-BPM sector that in just 17 years, Cebu IT Park and Cebu Business Park have rapidly grown into full-fledged business hubs hosting some of the sector’s major players, including Concentrix (formerly Convergys), Teleperformance, Accenture, Teletech, and ePerformax, among many others. The demand has certainly spilled over outside these areas over the years, decentralizing development, providing employment opportunities to residents of nearby cities, and spurring economic growth in previously untapped areas. With completion of major transport infrastructure projects underway, we can expect this to continue over the next few years. 

 


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