PRIME’s 2026 Q3 data show Cebu’s office market navigating new supply while rents remain resilient, as Davao’s tight office and industrial markets continue to see demand running ahead of available space.
The country’s two largest markets outside Luzon are moving through different stages of growth. PRIME Philippines’ 2026 Q3 Real Estate Market Briefing find Cebu’s office market absorbing new supply while maintaining rental resilience, and Davao preparing for its biggest wave of new office in a decade.
Cebu Office: Slack, Not Slump – Catching its Breath, Not Losing Momentum
Cebu’s office occupancy eased to 81.1 percent in the third quarter from 84.0 percent in the first, as net take-up turned negative by 29,400 square meters of new space was completed.
Rents tell a more resilient story. The average office lease rate rose 3.1 percent from the first quarter to PHP 665 per square meter, above the PHP 650 recorded in 2019. Roughly 120,000 square meter of new space is slated for 2026 and 133,000 square meters for 2027, the market is entering a period where the ability to differentiate space, location, and quality will become increasingly important.
Office Occupancy and Average Rents in Cebu and Davao, 2026 Q3
Davao Office: A Decade in Three Years
Davao’s office market remains one of the tightest in the country, with occupancy at 93.2 percent. Developers have noticed. From 2027 to 2029, the city will receive 145,000 square meters of new offices, nearly matching the 166,000 square meter it added over the previous nine years. this represents a major shift in the market’s supply profile. The key question will be how quickly new Grade A space is absorbed and how it changes the choices available to occupiers.
New Office Supply in Davao City
Demand is already running ahead. Office requirements reached 19,000 square meters from January to September, up 73 percent from 11,000 square meters a year earlier, with 15,300 square meters recorded in the third quarter alone. Corporate occupiers accounted for 63 percent of requirements, ahead of outsourcing firms and government agencies. The average rent eased 4.7 percent from the first quarter to PHP 610 per square meter as the lowest asking rate fell to PHP 330, but with quality space still limited relative to demand, PRIME expects rental levels to remain resilient as the market moves toward the arrival of new Grade A supply. The opportunity in Davao is therefore not simply about adding more office space. It is about bringing the right product to a market where established occupiers are already expanding, upgrading and evaluating their long-term requirements.
Warehouses: Logistics leads in Both Hubs
Cebu’s industrial vacancy edged up to 3.2 percent, yet average rents rose 3.4 percent year on year to PHP 261 per square meter. Top-end warehouse rents jumped 60 percent, from PHP 350 to PHP 560, as higher-grade facilities came online, while the floor held at PHP 100. Third-quarter requirements of 22,150 square meter were the strongest in nearly two years, led by transportation and storage firms at 79 percent of demand.
In Davao, occupancy stands at about 95.5 percent, and the higher-grade stock has lifted the average rent to PHP 160 square meter. Requirements reached 79, 300 square meters in the first nine months, up 3 percent year on year, with transportation and storage firms accounting for 63 percent and manufacturers 27 percent. The industrial pipeline relatively lean. About 16,600 square meters is expected to come online in 2026, followed by limited new supply in 2027 and about 40,400 square meters in 2028.
Warehouse Requirements in Cebu and Davao, January to September
“Cebu is not slumping; it is catching its breath,” the briefing states. “Davao will get almost a decade’s worth of offices in just years, and demand is already running ahead.”
Different Markets, Shared Opportunity
Across VisMin, the broader story is one of continued demand meeting an evolving supply landscape. Cebu is absorbing new office and industrial space as growth expands beyond established locations, while Davao continues to operate in a tighter environment where quality supply remains highly sought after.
For both markets, the opportunity is not simply about adding more space. It is about bringing the right product to the right locations in response to where occupiers are expanding and how their requirements are evolving.
About PRIME Philippines
PRIME Philippines is the country’s fastest growing and most disruptive commercial real estate advisory firm. Established in 2013, PRIME has redefined the brokerage industry by replacing outdated practices with innovation, data intelligence, and relentless execution. With full-service offices in Manila, Cebu, and Davao, PRIME has completed over 300 high-impact projects nationwide. Backed by a team over 100 professionals, PRIME is multi-awarded and trusted by the country’s top developers, investors, and occupiers. It is involved in big ticket office transactions and holds the No. 1 position in industrial leasing nationwide.
REFERENCE: PRIME Philippines