SM Prime to spend P1 billion for Cebu office expansion

Upgrade to High-Speed Internet for only ₱1499/month!

Enjoy up to 100 Mbps fiber broadband, perfect for browsing, streaming, and gaming.

Visit Suniway.ph to learn

February 20, 2026 | 12:00am

MANILA, Philippines — The Sy family’s SM Prime Holdings Inc. is pouring in more than P1 billion to expand its office portfolio in the country’s fastest-growing regional office market outside Metro Manila.

SM Offices, the office leasing arm of SM Prime, will add more than 60,000 square meters of leasable space in Cebu City by the fourth quarter of 2026.

SM Offices head Alexis Ortiga said Cebu is a major economic hub because of its strong infrastructure, exceptional talent pool and complete business ecosystem.

“This year, we saw that the new supply entering the Cebu market and the demand in that market remain very healthy. In fact, the Cebu office market was only second to BGC in terms of growth. So we are confident about SM City Cebu North Wing Towers,” Ortiga said.

SM City Cebu Towers sits within the redeveloped SM City Cebu North Wing complex, which integrates retail facilities and a National University (NU) campus.

It targets traditional corporations and business process outsourcing firms seeking superior in-city alternatives.

“We believe that it offers great value for its location and its integration with the SM City Cebu mall and NU Cebu. This would give our tenants and their employees daily conveniences and accessibility that will not be easy to replicate,” Ortiga said.

“We’re also seeing a lot of ongoing flight to quality and this gives us a lot of confidence. Companies are moving toward newer, well-located buildings and this shift works in our favor,” he said.

Ortiga said the 60,000 square meters of leasable space SM Offices will be adding to Cebu this year is already a significant addition to the market.

“Our focus right now is really on occupancy stability and tenant quality over portfolio expansion. We’re mindful not to get ahead of demand, so that we don’t put undue pressure on pricing and absorption,” Ortiga said.

“Over the medium term, we believe that Cebu remains a very strong growth market for us, but any expansion will be measured in time to demand so that we sustain the growth and protect our long-term value,” he said.

Outside Metro Manila and Cebu, Ortiga said locations such as Bacolod, Davao, Iloilo, Pampanga and Laguna are seen as the next growth areas for SM Offices.

We see demand in these cities remaining solid. We also have a presence already in these markets, so we are confident with these provincial cities,” he said.

According to Ortiga, SM Offices ended 2025 with overall occupancy ahead of the industry.

“We ended with around 85 percent of our spaces taken compared with the reported average office sector of around 80 percent. Our mall-based offices performed very well. Tenants really value the SM ecosystem and the convenience of being just steps away from an SM mall and other facilities,” Ortiga said.

“For 2026, we are targeting higher take-up across the entire portfolio. Again, growth will largely come from the regional, provincial and mall-based offices,” he said.

SM Prime is pursuing mixed-use developments that combine offices, residences, retail, education, MICE facilities and leisure spaces across the country.

The strategy aims to create efficiency for tenants while supporting employee retention through integrated amenities.