Property consultancy Colliers Philippines projects that Cebu will continue to be the nation's most dynamic office market outside Metro Manila in 2026. This outlook comes with a significant caveat: a shortage of new supply in prime areas threatens to slow down transaction activity in the near term.
Sustained Demand Meets Limited New Supply
According to Colliers' 'Outlook 2026: Office' report, Cebu captured the largest share of office deals in areas outside the National Capital Region (NCR) in 2024. The province, alongside Pampanga, is expected to account for over half of all provincial transactions next year. The market's strength is buoyed by consistent demand from IT-BPM companies and multinational corporations seeking high-quality spaces in key provincial locations.
However, a challenge is on the horizon. Colliers warns of a potential short-term slowdown in office space take-up due to a limited pipeline of new supply in Cebu IT Park (CITP) and Cebu Business Park (CBP) from 2026 to 2028. This scarcity in the city's primary business districts is predicted to tighten options for companies looking for space starting next year.
National Market Trends and Regional Rivalry
The Philippine office market overall is entering a phase of more measured growth. In Metro Manila, new office supply from 2026 to 2028 is forecast at nearly 350,000 square meters. This volume represents only about a third of the annual completions seen during the pre-pandemic peak period of 2017 to 2019. Vacancy rates in the capital are expected to improve, easing to 19.5 percent in 2026, aided by renewed demand and a slower pace of construction.
Key submarkets like Makati CBD and Fort Bonifacio are anticipated to lead the rental recovery. Makati, in particular, is seen moving into a landlord's market as its vacancy rate is projected to drop to 8.2 percent. Outside NCR, the competition is heating up. While Cebu remains the frontrunner, Pampanga is building momentum as a compelling alternative, fueled by expanding township developments and enhanced infrastructure links.
The Rise of Flexible Workspaces and Future Outlook
A notable trend supporting provincial markets is the aggressive expansion of flexible workspace operators. Providers such as KMC Solutions and IWG are accelerating their push into major Visayas and Mindanao cities, including Cebu, Iloilo, Bacolod, and Davao. Colliers notes that businesses are increasingly incorporating plug-and-play spaces into their continuity plans, especially as a response to local disruptions like power outages and flooding.
For Cebu's medium-term growth to be sustained, Colliers emphasizes that developers need to speed up the launch of new projects. The consultancy foresees occupiers competing for a limited pool of Grade A offices, while landlords in emerging districts may gain from spillover demand. Cebu's strong fundamentals will continue to attract BPO and multinational tenants, but without new supply, rental pressures may build, and companies could soon face fewer choices.
