Iloilo tops Metro Cebu in Q1 2026 office transactions

By Mariela Angella Oladive

Iloilo outpaced Metro Cebu in office transactions in the first quarter of 2026, according to Colliers Philippines, reflecting stronger activity in regional hubs outside Metro Manila.

Joey Roi Bondoc, director and head of research at Colliers Philippines, said the performance was recorded in the first three months of the year and is not typically observed every quarter.

“I believe this may be a supply-driven increase in transactions, as this trend is often observed not only in the residential sector but also in the office market. When new office buildings are completed in a particular locality, that area typically attracts new tenants,” Bondoc said during a May 5 briefing.

Bondoc said Megaworld Corp. accounts for nearly half of Iloilo’s office market, driven largely by developments such as Iloilo Business Park.

The township hosts 13 office towers with about 205,000 square meters of leasable space and has reached around 85 percent occupancy, exceeding the industry average of 80 percent.

Enterprise One and Two are the province’s first Leadership in Energy and Environmental Design (LEED) Gold-certified office buildings, signaling a shift toward premium and sustainable office developments in the region.

The township has also generated roughly 20,000 direct jobs in the business process outsourcing (BPO) and corporate sectors, and about 80,000 indirect jobs.

Megaworld Corp. is advancing an “office-for-sale” strategy through its 19-story International Corporate Plaza, which has sold about 65 percent of its units.

The project has recorded a 43 percent increase in capital values, with prices reaching approximately PHP 231,000 per square meter.

Bondoc said tenant demand in Iloilo is expanding beyond traditional back-office outsourcing, with a growing presence of higher-value occupiers alongside BPO firms.

Office vacancy in Metro Manila remains steady at around 19 percent despite continued building completions, suggesting supply and demand are broadly balanced.

Vacancy levels vary across business districts, with prime areas such as Bonifacio Global City and Makati’s central business district posting lower rates of about 10 percent, Bondoc said.

He noted that while vacancy in these areas is relatively low, available spaces are often fragmented, making it difficult for some tenants to secure large, contiguous office requirements.

Developers have been limiting new office launches in Metro Manila while expanding more aggressively in regional markets, he added.

Bondoc also cited the continued expansion of global capability centers — multinational firms that establish in-house operations to serve global networks — as key drivers of office demand.

These include Wells Fargo, JPMorgan Chase, Coca-Cola, and Johnson & Johnson, which occupy large office spaces in the country.

“Overall, we’re seeing improvement in take-up, at least for the first part of 2026, and demand outside Metro Manila continues to be strong. In fact, as I mentioned earlier, when you go outside the capital region, Iloilo stood out in the first quarter in terms of total office space occupied,” Bondoc said.

Colliers said the Philippine property market is undergoing a structural shift, with regional cities such as Iloilo, Cebu, Davao, and Cavite emerging as key growth drivers amid infrastructure expansion, steady domestic demand, and sustained remittance inflows.

Despite external pressures including geopolitical tensions in the Middle East, regional markets continue to show resilience, Bondoc said.

“What’s interesting is that while there are challenges, certain regions in the Philippines are growing at about the same pace as the national economy or even faster,” he said.

He identified Western Visayas as one of the country’s strongest-performing regions, alongside Central Visayas and other emerging growth corridors.

In 2025, Western Visayas’ economy grew by 6.4 percent — surpassing the national average of 4.4 percent — to reach PHP 683.44 billion, according to the Philippine Statistics Authority.

The region was the fastest-growing among the country’s 18 regions and the eighth-largest economy overall, contributing 2.9 percent to national gross domestic product.