Premium pipeline seen to recast Davao’s office landscape by 2027

Davao’s office market is running hot. Across Davao City, demand is vastly outpacing supply, an uncommon state for office markets in the Philippines which are mostly still in the recovery stage. A visible cue to this is how mixed-use assets are evolving, with several developments leaning into offices as demand deepens.

- JET YU

Damosa IT Park is realigning its development strategy to address strong office demand, building on the full occupancy of its Topaz and Diamond Towers. At Felcris Centrale, an overflow of requirements has pushed office users into areas first intended for retail. Additional office space is also slated for SM Lanang’s renovation and expansion. These shifts set up the discussion that follows why Davao holds one of the most promising office markets in the nation.

COMPETITIVE COSTS, GENEROUS INCENTIVES, AND ENGLISH-PROFICIENT TALENT POSITION DAVAO AS ONE OF THE MOST COMPETITIVE PROVINCIAL OFFICE MARKETS

Davao City stacks up well for office locators on cost, talent, and government incentives. A large regional labor pool feeds the city from nearby cities such as Panabo and Tagum in Davao del Norte, Digos in Davao del Sur, and General Santos in South Cotabato. The Davao region’s English skills are also second only to the Cordillera Administrative Region outside of Metro Manila according to Education First's English Proficiency Index.

Entry rates for customer service representatives in Davao are also competitive. As reported by Indeed, the average monthly wage for the role is around PHP 18.2k per month, below other key office hubs such as Metro Manila, Cebu City, Iloilo City, and Clark. Expanding or new locators also benefit from LGU incentives. The Davao City Investment Promotion center grants up to 3 years’ business tax exemption, 2 years of real property tax exemption, and Mayor’s Permit, fees and licenses exemptions under its Investment Incentive Code.

DAVAO’S TIGHT 95% VACANCY SIGNALS READINESS FOR NEW OFFICE DEVELOPMENTS