Philippine office market surpasses forecast, eyes strong close to 2025

The Philippine Office Market Surpasses Forecast Eyes Strong Close to 2025

As of September 2025, the Philippine office market has exceeded its full-year forecast, with a net take-up of 215,000 square meters (sqm), according to Colliers Philippines Director for Office Services-Tenant Representation Kevin Jara. This significant milestone is attributed to strong transaction activity from third-party operating companies (3POs), services, and traditional firms.

Metro Manila's Strong Performance

The Metro Manila office market has demonstrated remarkable performance in the third quarter of 2025, with completed transactions reaching 232,000 sqm, the highest quarterly performance since the ban on Philippine Offshore Gaming Operators (POGO). Additionally, 127,000 sqm returned to the market via non-renewals and surrenders, marking a low point since the POGO ban.

Vacancy Rates Remain Steady

Despite increased demand, vacancy rates have remained flat at 19.8 percent, with most vacancies concentrated in areas like the Bay Area and Alabang, which used to be POGO areas. Tightening vacancies were observed in Primary Central Business Districts (CBDs) such as Makati and Ortigas Center.

Forecast for 2028 A Downward Trend

Jara forecasts a downward trend on vacancy rates starting next year, with an expected rate of around 17 percent by 2028, assuming a net take-up of 500,000 sqm. This is believed to be the normalized volume of office demand experienced before the pandemic and POGO arrival.

Total Transactions A Marked Improvement

As of September 2025, total transactions in Metro Manila have reached 674,000 sqm, a marked improvement from 608,000 sqm in the same period last year. Jara attributes this growth to the strong transaction activity mentioned earlier.

Emerging Markets Fort Bonifacio and C5 Corridor

Fort Bonifacio has emerged as the strongest performer in Q3, with transactions reaching 83,000 sqm, driven by expansions from shared services and traditional companies. The C5 corridor is another area gaining traction, with potential to exceed supply levels of some areas in Manila.

Cebu Remains a Top Performer

Beyond NCR, Cebu remains the top performer, with total transactions reaching 210,000 sqm as of September 2025, compared to 184,000 sqm in the same period last year. Jara attributes this growth to large deals and interest from outsourcing companies and shared services coming out of Manila.

Developers Expand Portfolio

Developers are expanding their portfolio in underserved locations, with new provincial supply including Ayala Land's Evo City Technohub 1 & 2 in Cavite, BDO's Cebu Fuente Tower in Cebu, and SM City Bacolod's The North Block BPO.

Headwinds and Opportunities

Jara identifies national and global trends such as AI-related lay-offs and US legislation affecting the business process outsourcing (BPO) industry as headwinds that need to be navigated. However, he also highlights emerging opportunities for investors in the flexible workspace industry and provincial market expansions.

In conclusion, the Philippine office market has surpassed its forecast, driven by strong transaction activity and expanding markets. As we move forward into 2025 and beyond, it's essential to monitor these trends and identify opportunities for growth and investment. With the power of data and analysis, we can navigate the challenges and create a brighter future for environmentalists and businesses alike.

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Edward Lance Arellano Lorilla

CEO / Co-Founder

Enjoy the little things in life. For one day, you may look back and realize they were the big things. Many of life's failures are people who did not realize how close they were to success when they gave up.