Colliers has positive outlook on Cebu property market
COLLIERS International Philippines sees the Cebu property market benefiting from business continuity plans of companies expanding outside Metro Manila, the economy’s recovery, the government’s decentralization efforts and the “Build, Build, Build” program.
In a virtual briefing on Thursday, Colliers Associate Director for Research Joey Bondoc said there was a muted office completion in 2020 with supply only at 52,100 square meters (sqm), which is mostly located in the major business districts of Cebu.
This figure is seen to more than triple to 161,900 sqm this year and is expected to be completed over the next 12 months.
Bondoc also noted that Cebu’s office market recorded a high vacancy rate last year as some business process outsourcing (BPO) companies rationalized office space requirements and some traditional businesses had to cease operations.
“We’re not out of the woods yet because for 2021, we’re likely to record a much higher vacancy and this is not very likely to improve significantly by 2022,” Bondoc said.
The firm foresees office space vacancy to hit 26.9 percent this year and 26 percent for 2022.
Bondoc said Cebu remains an attractive site for BPO locators because of the availability of fully fitted office spaces.
The region’s residential segment also suffered delays in completion because of the pandemic.
Colliers said Cebu’s condominium stock as of the third quarter of last year is at 45,500 units, with 74 percent located in Cebu City.
The condominium stock is seen to improve by end of 2023 to 70,500 units, with 67 percent still to be in Cebu City.
Condominium take-up and launches by the end of first nine months of 2020 were 54 percent and 80 percent lower year-on-year at 4,000 units and 2,000 units, respectively.
Meanwhile, the remaining condominium inventory in Cebu as of the third quarter is 8,700 units, with mid-income units making up 40 percent of the amount.
The overall stock of Cebu’s horizontal house and lot segment was at 19,600, as of the third quarter, with 72 percent in Lapu-Lapu City.
This figure is seen to increase to 21,000 by the end of 2022, according to Bondoc.
Similar to the condominiums, the house and lot segment also recorded a slowdown in take-up and launches.
Take-up in the first nine months of last year was 62 percent lower year-on-year to 2,000 units, while launches were down 86 percent to 750 units during the period.
Of the total launches, 66 percent were from the affordable price segment ranging from P1.7 million to P3.19 million.
The affordable segment also took up 63 percent of the total take-up of the house and lot market.
As of quarter three, Cebu has 2,788 house and lot units in its inventory, with 52 percent from the affordable segment.
The lot only project in the area, on the other hand, saw an overall stock of 8,500 units as of the third quarter last year, with 65 percent in Cebu City.
Take-up and launches for the lot only projects also declined by 76 percent and 56 percent year-on-year to 250 units and 500 units, respectively.
The lot only, meanwhile, has a remaining 1,318 units in its inventory as of the third quarter, with 48 percent from the economic segment.
Bondoc said they see an increased demand for township projects as the pandemic highlighted the need to build an integrated community.