The Cebu office property market is set for a robust upswing in 2025 as investor confidence returns and the outsourcing industry continues its aggressive expansion outside Metro Manila. Following a subdued fourth quarter in 2024, when businesses adopted a cautious stance amid U.S. election-related uncertainties, the first quarter of 2025 has marked a sharp rebound—particularly in Cebu, which captured a commanding 36% share of provincial office transactions, thanks to its high availability of quality buildings, mature infrastructure, rich talent pool, and business-friendly environment.
According to Colliers data, Cebu saw a 150% quarter-on-quarter increase in transaction volume in Q1 2025, totaling roughly 19,800 square meters—up from 8,000 square meters in Q4 2024. This growth is being led primarily by the IT-BPM sector, which accounted for 51% of new leases, followed closely by traditional corporate occupiers.
Interestingly, 82% of these transactions were due to expansions or new setups, reflecting occupiers’ growing confidence in long-term growth prospects in the region.
High vacancy driven by new supply
In Q1 2025, Metro Cebu posted an overall vacancy of 21.2%, higher than the recorded end-2024 vacancy of 20.5%. This increase is mainly attributed to the completion of Filinvest’s Cyberzone Cebu Towers 3 and 4 in Cebu IT Park.
Colliers expects an additional 113,000 square meters of office space in 2025, with bulk of new supply coming from Cebu IT Park and North Reclamation. Notable developments in the pipeline include BDO Corporate Center Cebu in Fuente Osmeña, Grand Tower in North Reclamation, IL Corso in South Road Properties, MAHI Center in Mactan, and Patria de Cebu in Uptown. With the high volume of new office stock, Colliers expects vacancy to continue hovering the 20%-level by end of 2025.
Pre-leasing also makes a comeback in Cebu
A significant trend observed in the Cebu office market in 2025 has been the uptick in pre-leasing activities, a clear indicator of growing tenant confidence and long-term commitment to the region. Several large IT-BPM companies – particularly those serving North American and Asia-Pacific markets – have accelerated their growth in Cebu, capitalizing on the area’s large labor pool, competitive operating costs, and increasing government support for the outsourcing industry. This has led these firms to secure office spaces in advance, even in buildings still under construction or in pre-completion phases.
Pre-leasing activity has been noted in Filinvest Cyberzone Cebu Towers 3 and 4 with major sign-ups from notable outsourcing companies. This trend reflects the anticipation of continued headcount growth and the desire to lock in strategic locations ahead of further market tightening.
Moreover, the pre-leasing activity has helped in pushing the net take-up back to positive territory as we recorded 13,000 square meters of net take-up in Q1 2025, reversing the 4,000 square meters negative net take-up recorded in last quarter of 2024.
This wave of pre-leasing not only underscores Cebu’s resilience as a top-tier outsourcing hub, but also signals a forward-looking market sentiment – one where occupiers are positioning themselves for sustained growth, and developers are once again exploring pipeline projects with greater confidence.
Flexible Workspaces Rising as Strategic Solutions
Cebu’s flex space market has emerged as a key enabler for companies seeking cost-effective and scalable setups. With approximately 70% of available space in bare or warm-shell condition, the rising preference for plug-and-play workspaces is unmistakable. Seat leasing—where firms lease ready-to-use office setups—has become a favored alternative to upfront capital expenditures.
Vacancy in Cebu’s flexible workspace segment is notably lower at just 13%, underscoring rising demand. In response, both new and established flex operators are expanding their provincial footprint.
Colliers Outlook
Cebu’s office market is mirroring the early growth seen in Metro Manila and is expected to ride this momentum through the end of 2025. Preliminary data from our upcoming Q2 2025 report shows strong demand for office space in the provinces – Cebu in particular – driven by major IT-BPM occupiers securing large leases in newly completed developments.
With market conditions still favoring tenants, Colliers recommends that occupiers capitalize on this by including upcoming buildings in their site selection. Engaging in pre-leasing opportunities not only secures favorable lease terms but also gives occupiers ability to influence the design and functionality of their future workspace.
For landlords, being competitive means understanding and adapting to evolving tenant needs. To stay competitive, Colliers encourages landlords to explore creative solutions, including more flexible lease structures and attractive rental rates. With growing demand for plug-and-play solutions, landlords – especially those with a high number of bare shell spaces – should consider partnering with flexible workspace providers. These partnerships can help activate idle space, reduce time-on-market, and cater to occupiers looking for immediate occupancy without the burden of upfront fit-out costs.
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