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kmcmaggroup.com
Upcoming Opportunities / Challenges for BPO MarketProperty Summit Cebu
Copyright Ⓒ 2015
opportunities, challenges, and strategies to employ in the cebu office sector
content
cebu office real estate outlook
cebu real estate market overview
the BPO industry in the Philippines
#2in non-voice
complex
Began emerging in
2000
Growth at an annual rate of
26 percentover a decade
1,000,000 direct employees
by 2014
US$16billion in revenues
3 millionindirect
employees
Serving North America Asia EU
20+ sectors
Over 700 IT-
BPO companies and Global In-house Centers
Source: Business Process Association Philippines (BPAP)
history
1990’s
The early 90’s saw the development of local business
parks, making Cebu one of the biggest business parks
outside of Manila
Aside from office buildings, initial developments
included retail and hotel components
1997 Asian Financial Crisis halted developments
2000’s
Development resumed due to expansion and rise of
BPOs in Cebu
Due to the Dot Com boom
Since then, Cebu has been on the rise, becoming
one of the top BPO destinations in the world
Vacancy dropped to 1.99% owing to fairly constant supply and strong leasing activity. Vacancy rates are
expected to go up in the next few quarters in all submarkets in 3Q2015, specially in Cebu Business Park,
with the turnover of new supply.
cebu office market overview
Source: KMC MAG Group Research & Consultancy
Cebu Grade A Office Supply & Take-Up
Robust activity in Cebu’s office sector as more
players enter the market
Ayala Land is rolling out P8B for Central Bloc,
located within Cebu IT Park
Megaworld’s Mactan Newtown expected to add
150,000 sq m by 2021
Filinvest has already rolled out first tower of P5B
Cyberzone complex
Norkis expected to complete first office tower in
Norkis Cyberpark in 3Q 2015
Much-anticipiated SM Seaside development in
full-swing with mall construction finishing soon
Source: KMC MAG Group Research & Consultancy
cebu office market overview
Cebu Grade A Office Stock
Infrastructure still in development
Lack of connectivity between microdistricts
Lack of central planning body for Metro Cebu
(MMDA)
Infrastructure, disaster preparedness,
security
Need to decongest Cebu City
Other emerging BPO destinations nearby
(Bacolod, Iloilo, Davao)
Lack of quality office supply
Cebu still seen as a secondary site option
challenges
TransCebu – Bus Rapid Transit
16 km line
$115M USD
$7M / km
will save Cebuanos 570
million hours / year
Same costs as Jeepney
fares
"Cebu BRT Potential Network" by Integrated Transport Planning Ltd
Mactan – Passenger Terminal
~$400M USD
MegaWide / GMR
Establish Sustainable
Transport System
Improved international
and domestic air transport
services
Passenger traffic to handle
up to 12.5M / year
CNN Philippines
Growing number of graduates to support BPO industry growth requirements
challenges: manpower
Historical Graduate Figures
Source: Commission on Higher Education
More BPO companies expanding outside of Metro Manila, specifically Cebu
opportunities: market entrants
Developers should move towards building 24/7
live-work-play environments
Infrastructure development should be priority
Government should further improve ease of
doing business in order to remain competitive
vs alternative destinations
Government should prioritize the creation and
centralization of a governing body that
oversees development in Metro Cebu
Strengthen branding as a primary BPO
destination through improving supporting social
and physical infrastructure
strategies
Source: KMC MAG Group Research & Consultancy
cebu office: upcoming supply
8 Newtown Boulevard
3Q 2015
MactanNewtown
FLB Corporate Center
3Q 2015
Cebu Business Park
SkyriseBeta
3Q 2015
Cebu Business Park
Park Centrale
3Q 2015
Cebu IT Park
NorkisOne
3Q 2015
NorkisCyberpark
Ongoing and planned infrastructure to bring in
more investment
Townships and microdistricts to come online
within the next 3-4 years
Rental rates to continue to rise due to consistent
demand, with many spaces already pre-
committed
office market outlook
for more information
KMC MAG Group
8th Floor, Sun Life Centre,
5th Avenue corner Rizal Drive,
Bonifacio Global City 1634, Philippines
T: 403 55 19
W: kmcmaggroup.com