Vacancy in the Cebu office market declined 1.1 percent in the third quarter of 2021 to 19.9 percent, driven by improved net absorption, a property services firm said.
In its latest Cebu office briefing, KMC Savills Inc. reported that Cebu’s office market showed improvement during the quarter as it recorded a total of 11,700 square meters (sqm) of net absorption.
KMC said leasing activity mainly came from Cebu IT Park (CITP) and Cebu Fringe, registering around 9,400 sqm and 2,700 sqm of net take-up, respectively.
It added that this relaxed overall vacancy in the period from the 20 percent vacancy in the previous quarter.
Despite the improvement, KMC said vacancy is likely to increase in the company quarters, due to the completion of new supply.
“Vacancies are anticipated to breach a new record-high, with over 120,000 sq m of new Grade A office space scheduled to be completed in the coming quarters,”KMC said.
Meanwhile, Average rents in Cebu registered at P579.4 per sqm, a 0.5 percent improvement from the previous quarter.
“With vacancies still elevated, occupiers will continue to hold the upper hand in negotiations,” KMC said.
It added that landlords are expected to provide flexible terms and generous concessions.
“Cebu remains to be an attractive location for businesses seeking prime talent in the Visayas. Landlords are still experiencing the effects of the pandemic and are expected to be flexible with lease terms and pricing amid weakened market dynamics,”KMC said.
