SM boosts Cebu presence amid shift from Manila

Insider Spotlight

• SM Offices adding over 60,000 sq m in Cebu by 2026
• Cebu seen as top alternative to costly, congested Metro Manila
• Provincial office demand up 33 percent year-on-year
• Integrated campus-office-retail model targets BPOs, corporates
  
  

SM Offices is doubling down on Cebu as it positions the city as a prime alternative to Metro Manila for companies seeking lower costs, stronger talent pipelines and modern mixed-use environments.

The office leasing arm of SM Prime Holdings Inc. plans to add more than 60,000 square meters (sq m) of leasable space in Cebu City by the fourth quarter of 2026, banking on surging demand in the country’s fastest-growing regional office market outside the capital.

The expansion will rise within the SM City Cebu Towers complex along A. Soriano Avenue in the North Reclamation Area, targeting traditional corporations and business process outsourcing firms looking to decentralize operations from Metro Manila.

Why it matters

Metro Manila’s high rental rates, traffic congestion and dense competition for talent are pushing firms to explore regional hubs. Cebu is emerging as a leading choice due to infrastructure upgrades, airport connectivity and a deep labor pool.

“Cebu is a major economic hub because of its strong infrastructure, exceptional talent pool, and complete business ecosystem,” Alexis L. Ortiga, vice president and head of SM Offices, said in a press statement on Feb. 20, 2026.

By the numbers

In 2025, Cebu accounted for 150,000 sq m, or 55 percent of provincial office take-up, representing 33 percent year-on-year growth, according to Leechiu Property Consultants.

That growth underscores how companies are increasingly shifting expansion plans outside Metro Manila, particularly in the IT-BPM sector.

Zoom in

SM City Cebu Towers forms part of the redeveloped North Wing complex, integrating retail spaces and a National University campus.

“SM City Cebu Towers is meant to support this growth by providing well-managed high-quality and well-connected office spaces that meet the evolving needs of businesses expanding in the region,” Ortiga added.

The development offers access to South Road Properties, Mactan-Cebu International Airport, the port area and government centers, making it attractive to firms requiring logistics and regulatory connectivity.

The big picture

SM Prime is pursuing a nationwide mixed-use strategy that combines offices, residences, retail, education, meetings and leisure facilities.

For tenants, this integrated model helps improve employee retention and reduce hiring costs by tapping nearby universities and lifestyle amenities—a value proposition increasingly critical as firms rethink where and how they operate beyond Metro Manila. —Vanessa Hidalgo | Ed: Corrie S. Narisma