A dismal take-up in a quarter with no new supply has increased the large amount of available office spaces in the Cebu office market in 1Q/2016. Vacancy rate rose to 12.8% at the end of the first quarter of 2016 from 12.5% in 4Q/2015.

Even with the negative net absorption, rental rates increased in 1Q/2016. During the quarter, average rental rate in Cebu was Php 528.3 per sq m/month, an increase of 2.7% QoQ and 8.1% YoY. Among all business districts in Cebu, the Fringe Area experienced the highest growth in 1Q/2016 with average rental rate increasing by 5.6% QoQ and 16.8% YoY.

Looking ahead, more office towers are expected to be launched in Cebu, owing to the favourable market condition in the country’s second largest metropolis. Some of the upcoming large-scale projects with office components within their respective masterplans include the SM-Ayala joint-venture project and City di Mare by Filinvest at the South Road Properties and the Aboitiz-Ayala business park in Mandaue City

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