Metro Cebu landlords and occupiers seize opportunities amid higher vacancy and pared down supply.
The Metro Cebu office market is experiencing a turbulent period. Segments that drove demand in the past five years, such as POGOs and outsourcing firms, are either vacating spaces or rationalizing their office footprints. Providers of English as a Secondary Language (ESL) services have also been downsizing while some traditional occupiers have closed shop, raising vacancies.
Aside from anemic demand, the Cebu office market is also seeing disruptions in supply with new office completion in 2020 likely to reach its lowest since 2013.
Colliers recommends that landlords be more proactive in responding to tenants’ requirements while tenants should complement their office set-up with remote working schemes.
Landlords respond to a testy market, Cebu still a competitive BPO hub
Colliers recommends that landlords offer POGO-vacated spaces to outsourcing firms with immediate plug-and-play office space requirements; support the short-term (6 to 12 months) requirements of BPOs implementing and experimenting alternative leasing schemes such as hub-and-spoke; be on the lookout for BPO firms that continue to hire and occupy space such as those providing healthcare, logistics, and e-commerce services; and be more flexible in assisting traditional occupants that have smaller office space requirements.
Based on the results of the Tholons Services Globalization Index 2020, Cebu is the 15th most competitive outsourcing destination in the world. Cebu is one of only two Philippine cities, along with Metro Manila, that made it to Top 100. This should sustain Metro Cebu’s competitiveness and viability as outsourcing firms continue to scout for locations outside Metro Manila. This should help the region attract more outsourcing locators once the market sentiment improves and contribute to a stronger pace of office leasing beyond 2021.
