THE Philippine office market is showing strong signs of recovery and growth in 2025, driven mainly by the booming IT-BPM industry, according to a recent market briefing by Leechiu Property Consultants (LPC).
In the first six months of 2025, office leasing demand reached 740,000 square meters, which is already 67 percent of the total 1.1 million square meters leased in all of 2024. This momentum signals a solid rebound, largely fueled by expansions, outsourcing, and growing confidence in the country’s workforce.
“The first half of the year has already clocked in 740,000 square meters of leasing activity. That is 67% of last year’s number. That is a very big number, to put it in perspective.” He added that while uncertainties remain about the second half, the current trend shows promise for continued growth,” said Mikko Barranda, Director for Commercial Leasing at LPC.
LPC founder David Leechiu said the strong office take up during the first half of the year was achieved despite the continued absence of POGOs (Philippine offshore gaming operators), work-from-home set up of several companies and threat of AI (artificial intelligence) taking over the jobs of in the BPO sector.
The IT-BPM sector alone accounted for 365,000 square meters of leased space in the first half of 2025, which is 86 percent of its total take-up in 2024. Barranda noted,
“This signals a possible return to pre-pandemic levels, driven by expansion, outsourcing, and increasing confidence in the Philippine talent pool,” Barranda asid.
Bonifacio Global City (BGC) led the leasing activity in Metro Manila, with 146,000 square meters leased in the first half of the year, already surpassing its total for 2024. Cebu remained the top provincial market, accounting for over half of the provincial leasing volume.
Vacancy rates held steady at 18 percent nationwide, with Metro Manila’s office space supply reaching 2.7 million square meters.
While vacancy rates remain at double-digit level, especially outside key districts like BGC, Barranda pointed out that space is tightening in prime locations:
“If you are a 5,000 square meter tenant, there are only four buildings in BGC that can meet that requirement. For PEZA-registered BPOs, only two buildings are available.”
This shortage is prompting some tenants to look at alternative areas like Makati and Quezon City, where suitable office spaces are available.
LPC also noted that the office market has shifted from cautious relocations to bold expansions.
“Companies are actively growing their footprint rather than just moving to newer buildings,” Barranda said. Many tenants are leasing bare shell spaces, showing confidence in long-term occupancy and willingness to invest in customized office fit-outs.
Green-certified buildings are also increasingly favored, especially by multinational companies.
Barranda concluded, “Demand has been strong for the first half of the year. We believe it will continue, but again, you never know. We’re optimistic about it.”
