By Madelaine B. Miraflor Leading real estate service provider Santos Knight Frank sees as much as 350,000 square meters (sqm) of office spaces to be developed in Cebu over the next three years, with bulk of the offtakers still to come from the business process outsourcing (BPO) sector. Representing 47 percent of the existing supply in Cebu, the growth reveals the long-term positive outlook of developers amid healthy demand for office space by multinational companies and BPO firms. “The growth of Cebu’s property sector this year solidifies the metropolis’ position as the leading investment destination in the Philippines outside Metro Manila. With a strong economy, large pool of talent and new infrastructure in place, Cebu is well on its way to becoming a global city,” Rick Santos, Chairman & CEO of Santos Knight Frank, said. According to him, the launch of Mactan-Cebu International Airport’s Terminal 2 plays a huge part in this sentiment. "While a number of cross-border transactions have recently been closed in Cebu, in particular from China, South Korea and Japan, the improvements to the airport will further increase tourism, facilitate greater inflow of capital and help continue the metropolis’ growth momentum in the coming years," Santos said. In the city's office market, weighted average asking lease rates increased by about 2 percent to P548.31 per sqm during the first half from only P536.96 per sqm in the second half of last year. Done deals tracked by Santos Knight Frank were recorded with transacted rents of P600 to 650 per sqm – a 9 percent increase from last year’s transacted rents. Meanwhile, office capital values typically range from P150,000 to P200,000 per sqm. Joey Radovan, Vice Chairman and Head of Occupier Services & Commercial Agency at Santos Knight Frank, said that by 2020, the greater Cebu business districts will have close to 1 million sqm of total space serving the office market. "The IT-BPO industry will continue to drive commercial demand and traditional office operations will have the opportunity to upgrade to new, modern buildings for their front office needs,” he further said. As for residential, prices have also increased during the first six months of the year. For instance, the affordable sector grew by 14.5 percent, midscale by 12.0 percent, and high-end sector by 12.0 percent. Buyers mostly consist of investors motivated by capital appreciation and leasing opportunities, while a large volume of availed inventory was intended for employee housing of Chinese gaming companies. With the traffic congestion in the city, residential demand is also seen in city centers which are closer to offices. Buyers from South Korea, Japan and China – three of the top sources of foreign arrivals in Cebu – are reported to purchase bulk condominium units.