Iloilo leads provincial office take-up as outsourcing firms expand

ILOILO emerged as the top driver of office space take-up outside Metro Manila in the first quarter (Q1) of 2026, overtaking Cebu as outsourcing firms sought skilled labor and lower operating costs in regional hubs, according to Colliers Philippines.

In its report released on Friday last week, Colliers Philippines said office transactions outside the National Capital Region (NCR) reached 37,000 square meters (sq.m.) in the first quarter. While this was 32% lower than the 55,000 sq.m. recorded a year earlier, market activity remained concentrated in key regional hubs.

Iloilo accounted for 16,000 sq.m. of office transactions, representing nearly half of the total take-up outside Metro Manila.

Cebu, which has the largest office stock outside the NCR at 1.54 million sq.m., recorded 9,000 sq.m. of transactions, down from 20,000 sq.m. a year earlier.

Pampanga and Laguna posted office take-up of 8,000 sq.m. and 1,000 sq.m., respectively.

Outsourcing firms accounted for nearly half of total office transactions during the quarter. Government agencies, energy and telecommunications companies, and manufacturing services firms also contributed to demand.

Colliers attributed sustained office demand in the Visayas and Mindanao markets to their skilled labor force, lower cost of living, and favorable business environment.

“Iloilo dominated office space transactions outside Metro Manila in Q1 2026. We expect outsourcing firms to continue driving office demand in VisMin, supported by skilled manpower, lower cost of living, and favorable business environments,” the consultancy said.

Vacancy rates across key Visayas and Mindanao office markets varied. Iloilo posted a 32% vacancy rate, with rental rates averaging P300 to P750 per sq.m. Davao recorded a 3% vacancy rate, reflecting limited office supply. 

Colliers expects the Visayas-Mindanao office market to be supported by a robust development pipeline, with 369,000 sq.m. of new office space projected to be completed from 2026 to 2029. — Juliana Chloe A. Gonzales