CEBU, Philippines — Cebu Business Park (CBP) and Cebu IT Park (CITP), the city’s main business districts, remain the most attractive for business process outsourcing (BPO) office operations.
As of end 2017, CITP and CBP accounted for more than 60 percent of Metro Cebu’s office stock, Colliers International Philippines said in a latest report on the office market.
"These business hubs remain as the most attractive locations in Cebu due to their proximity to public transportation terminals and the presence support facilities such as hotels, residential condominium, and malls," the property management company said.
Cebu’s office stock reached 960,000 sq m (10.3 million sq ft) of gross leasable area (GLA) as of end-2017. Colliers sees Cebu’s total office supply breaching 1 million sq m (10.8 million sq ft) this year. Year-on-year, office stock rose by 7 percent from about 897,000 sq m (9.7 million sq ft) in 2016.
Some 63,000 sq m (678,100 sq ft) of office space was completed last year. Cebu Business Park accounted for more than half of the new office space following the delivery of Philamlife Center, BPI Corporate Center, and Buildcomm Centre. The two other buildings completed last year were King Properties’ Avenir in the Uptown/Downtown district and Oakridge Realty’s Oakridge IT Center 2 in Mandaue.
"Over the next 36 months, Colliers projects the completion of an average of 132,000 sq m (1.4 million sq ft) of new office space annually. More than half of the new supply will be built within CITP and CBP," the consultancy firm said.
It also sees offshore gambling as an emerging critical segment of the Cebu office market as it accounted for a quarter of recorded transactions in 2017.
BPO-voice companies continue to dominate covering more than a half of transactions while the knowledge process outsourcing (KPO) firms that provide higher value services such as medical coding, software engineering and finance and accounting also sustained demand, taking a fifth of the total office leases.
After taking up 25,000 sq m (269,100 sq ft) of office space in first half of 2017, another offshore gambling company closed nearly 3,700 sq m (39,800 sq ft) of office space at Momentum Building. " With a more conducive local regulatory environment, we expect offshore gambling to become a major contributor to office space take up in Cebu."
KPO firms or those that provide higher-value services such as medical coding, software engineering, and finance and accounting comprised about a fifth of total transactions or some 20,000 sq m (215,300 sq ft) of office space.
Colliers believes that developing office towers within integrated business hubs remains crucial as these townships enhance living and working conditions.
Developers should explore parcels of developable land especially in Mandaue and Mactan areas that would benefit from the completion of major infrastructure projects such as the expanded Mactan-Cebu International Airport; Cebu-Cordova Expressway Link; Cebu Bus Rapid Transit (BRT); and Cebu-Negros bridge, it said.