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Upcoming Opportunities / Challenges for BPO MarketProperty Summit Cebu

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opportunities, challenges, and strategies to employ in the cebu office sector

content

cebu office real estate outlook

cebu real estate market overview

our team

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)

cebu real estate market overview

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

township evolution

Source: KMC MAG Group Research & Consultancy

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

cebu office market overview

Source: KMC MAG Group Research & Consultancy

Cebu Grade A Office Rental

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

opportunities, challenges, strategies

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

opportunities: infrastructure improvements

Source: KMC MAG Group Research & Consultancy

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

Third Cebu Mactan Bridge

2018

5.5Km

Will it happen?

Cebu Daily News

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

office market outlook

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

E: info@kmcmaggroup.com

W: kmcmaggroup.com