Philippines office market stabilizes as demand rises in 4th quarter

MANILA, Philippines — The Philippine office market showed firmer footing in 2025 as net take-up improved, vacancies eased and demand broadened across both IT-BPM and traditional occupiers.

Office demand reached 1.22 million square meters (sqm), surpassing full-year 2024 levels with a 10-percent increase, as expansion deals drove most leasing activity.

IT-BPM companies accounted for 32 percent of 549,000-sqm of take-up, while traditional corporates, government offices, and PIGO made up 68 percent or 671,000 sqm.

“This performance underscores the sector’s enduring relevance despite ongoing global headwinds, geopolitical uncertainty, and economic volatility,” Leechiu Property Consultants director for commercial leasing Mikko Barranda said.

Bonifacio Global City (BGC) led Metro Manila with 218,000-sqm of transactions, followed closely by Quezon City and Ortigas–Mandaluyong with 169,000 sqm and 155,000 sqm, respectively.

Provincial markets remained firm, led by Cebu, which recorded 150,000 sqm, or 55 percent of the total provincial take-up.

While vacant office space declined 59 percent quarter-on-quarter in the fourth quarter to 85,000 sqm, as downsizing slowed and relocations became more common.

Net take-up improved by 13 percent, reaching 476,000 sqm, reflecting steadier absorption after elevated vacant space earlier in the year.

The Metro Manila vacancy rate also stood at 18 percent, with BGC at nine percent and Makati at 15 percent, supported by lean pipelines and limited new supply.

The office market is expected to continue growing moderately in 2026, with hybrid work remaining a key structural consideration. Occupiers will continue to prioritize high-quality and well-located office spaces as part of their long-term workplace strategies.

“Looking ahead to 2025, we remain optimistic. While challenges persist, the Philippine office sector has repeatedly proven its resilience, and all signs suggest that the momentum will continue into the coming year,” Barranda said.