Before there were Cebu’s South Road Properties and North Reclamation Area, the metropolis had Cebu IT Park and Cebu Business Park.
The inception of Cebu Business Park (CBP) started when the former 45-hectare Club Filipino Golf Course was auctioned by Governor Lito Osmena to Ayala Corporation. The auction paved the development of Cebu Business Park, which, because of its strategic location, became a natural choice for businesses to locate. Situated close to major transportation hubs, government institutions, educational facilities, and residential areas, the area offers unprecedented accessibility and convenience for its investors.
The development of modern infrastructure has also been instrumental in the growth of Cebu Business Park. The construction of high-rise office towers and commercial spaces has transformed the city’s skyline and provided state-of-the-art facilities for both international and local business to set foot in the area’s office market. As one of Cebu City’s Premier Business and Commercial district, Cebu Business Park holds more than 360,000 sqm of gross leasable office space, which today is home to a range of companies from BPOs to financial services.
Cebu Business Park’s lone retail complex, the premier shopping mall Ayala Center Cebu, and presence of upscale residential developments have contributed to CBP’s growth and popularity.
The mall recorded a slowdown in occupancy at 45% vacancy of its 245,000 sqm GLA, one attributable to the Covid-19 pandemic. Meanwhile, the presence of luxurious condominiums has attracted investors and buyers to seek refuge in the estate’s convenient and vibrant urban lifestyle. The integration of residential spaces within the business district creates a live-work-play environment, enhancing the park’s overall appeal and fostering a sense of community.
Cebu Business Park’s twin sister, Cebu IT Park (CIP), mirrors the similar progression in terms of development. It began with the closure of the old Lahug Airport in the mid-1990s. The land previously occupied by the airport was auctioned off to the Ayala Group, which developed CIP.
CIP’s growth was further propelled when it was declared an IT special economic zone by the National Government. This special designation provided various incentives and benefits to businesses operating within the park, creating a thriving ecosystem for technology-driven businesses to set foot in the area. By obtaining this special economic zone status, Cebu IT Park solidified its position as a dedicated hub for the IT-BPM industry. It stands as the sole premier Information Technology Special Economic Zone in Cebu City, offering more than 370,000 sqm of office space. This extensive supply of office stock is home to numerous multinational outsourcing firms, showcasing the park’s significance in attracting and supporting the operations of these companies.
Despite being the only Information Technology Special Economic Zone in the city, Cebu IT Park’s office market was not immune to the challenges posed by the pandemic. The impact of the pandemic was reflected in the office market performance, with no new office launches observed in the area (just like CBP). However, there was a notable improvement in the market where nearly 16,000 sqm of net absorbed office spaces were recorded in 1H 2023. This improvement resulted to a slowdown in the vacancy rate from 21.5% in 1H 2022 to 9.1% in the same period in 2023. Although the demand for office spaces increased, rental rates remained relatively stagnant at PHP 667.19 per sqm per month on a year-on-year basis.
The developmental tale of these two business districts is driven by various factors, including strategic location, available amenities, developer initiatives, government support, and market demand, all things being held constant. The presence of Cebu’s major bridges has contributed to the overall infrastructure development of the Cebu Metropolitan Area, creating a favorable environment for business growth and investment. Better transportation links have made it easier for people to travel between their homes and the office, enhancing the two districts’ accessibility to a larger pool of potential tenants and talent.