Encouraging signs have emerged from the Cebu office sector where vacancies began to fall last year. According to KMC Savills, landlords reducing rents have helped kickstart the recovery with building owners preferring to secure new tenants now rather than wait for rental prices to return to pre-pandemic levels.
The consultancy noted that average rents in the third quarter decreased by 6.6 percent year-on-year. This was the largest drop in a decade for the Cebu office sector, but many don’t see the decline as a negative. By lowering their asking price, landlords were able to lockup tenants who may have been hesitant otherwise about making a decision.
Vacancy in the Cebu office sector fell from 25.1 percent in the second quarter of 2022 to 21.9 percent in the third quarter. Interest wasn’t limited to any one location with take up being recorded in both the city center and fringe areas.
KMC Savills reported that reinvigorated demand from IT-BPM companies was behind the turnaround of the Cebu office sector. And while it is believed these firms will continue to target the city, competition from Iloilo and Bacolod means landlords must keep their rents competitive or face losing out.
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The future of the office is dependent on employees
The future of the office is dependent on employees. This means employers must be willing to utilize hybrid solutions while ensuring the workplace itself offers rich in-person experiences that remote working cannot provide.
According to CBRE Asia Pacific, 58 percent of organizations are encouraging employees to come into the office while still allowing for remote working. This is a noticeable increase from 47 percent of firms that allowed it in July 2021 and 35 percent in October 2020.
This presents businesses with a challenge: What should the office look like since it now finds itself competing with the work-from-home experience. The key is balancing amenities people enjoy or otherwise don’t have access to elsewhere with a wealth of spaces that cater to everyone.
Related: What is The Flexi Group and will it change co-working in Asia?
