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Cebu Flash | Prospects for Cebu Office Leasing Market’s Growth Beyond 2020

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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.


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Cebu Flash | Prospects for Cebu Office Leasing Market’s Growth Beyond 2020

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Related Experts

Joey Bondoc

Associate Director

Research

Manila

Prior to joining Colliers in March 2016, Joey worked as a Research Manager for a research and consutancy firm where he handled business, political, and macroeconomic analysis. He took part in a number of consultancy projects with multilateral agencies and provided research support and policy recommendations to key government officials and top executives of MNCs in the Philippines.

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Dom Fredrick Andaya

Senior Director

Office Services

Manila

Dom began his career in Colliers International as a Research Assistant for the Research and Consultancy Division in February 2007.  In that capacity, he was responsible in gathering and organizing of data needed to generate commissioned market reports and quarterly release of The Knowledge, Colliers’ Market Review publication. 

He moved to Tenant Representation – Office Services Department in 2013. As a manager, he was tasked to handle various office space requirements of multinational clients. He was promoted to Associate Director in 2016 leading the Office Services team to hit the revenue target in the midst of leadership
transition. He started heading the Tenant Representation business as the Director in 2017 in charge of ensuring the growth and profitability of this business line. He helped the team stabilize in 2017 amidst market slowdown due to geopolitical concerns that affected the offshoring and outsourcing growth in the country and still achieved 18% profitability.

In 2018, he led the Tenant Representation to exceed the revenue target by 60% and achieve a 48% profit margin.

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