The Philippine office market sustained modest but meaningful gains in the third quarter of 2025, reflecting resilience amid global uncertainty and structural transitions across major sectors, according to Leechiu Property Consultants.
Net office demand climbed to 319,000 square meters—or 76 percent of 2024’s total—marking a sustained rebound from last year’s trough.
Demand reached 966,000 square meters year-to-date, equivalent to 88 percent of 2024’s full-year level, underscoring continued stability and tenant confidence even without support from the Philippine Offshore Gaming Operator (POGO) sector.
The market has largely absorbed the impact of POGO exits, with contractions stabilizing and relocations driving continued movement across business districts.
The IT-BPM sector accounted for nearly half of total demand, or 45 percent, supported by global capability centers and third-party outsourcing firms expanding operations nationwide. Traditional occupiers also remained active, taking up 449,000 square meters, while government relocations and new industries contributed incremental growth.
Bonifacio Global City (BGC) led office take-ups at 183,000 square meters, driven primarily by IT-BPM expansions. Quezon City and Ortigas–Mandaluyong followed closely with a combined 271,000 square meters, supported by traditional occupiers seeking larger and cost-effective spaces. Makati Central Business District (CBD), while stable, posted selective growth as tenants pursued value-driven relocations.
Outside Metro Manila, Cebu sustained its lead, accounting for nearly 60 percent of provincial demand. Its IT Park remains near full occupancy at six percent vacancy, while Davao and Iloilo saw renewed expansion from IT-BPM firms, signaling continued decentralization of office demand across the Visayas and Mindanao.
Overall Metro Manila vacancy stood at 18 percent, or 2.7 million square meters, down from pandemic-era highs. BGC, at 9 percent, and Makati CBD, at 10 percent, recorded the tightest vacancies and are expected to recover fastest, with limited new supply in the pipeline.
Rents in BGC have begun edging higher amid sustained single-digit vacancy, while Makati Grade A and B buildings hold steady. Outer districts, including Alabang and the Bay Area, remain competitively priced, attracting large-space tenants seeking cost efficiency.
Leechiu Property Consultants associate director for commercial leasing Edward Gador said the first three quarters of 2025 show that the office market continues to hold its ground—as long as demand remains stable and contractions stay manageable.
“What we’re seeing is a more sustained and resilient recovery, driven primarily by the IT-BPM sector and traditional office occupiers,” said Gador.
Senior manager for commercial leasing Erika Manasan also of Leechiu Property Consultants, said, “If the office market continues its steady demand performance—and if contractions stay manageable—we’re on track to reach last year’s demand level. That’s a strong and reassuring sign that the market has found its footing again. The stability we’re seeing today, even without POGO activity, tells us that this recovery is not just a rebound, it’s a sustained one.”
Leechiu Property Consultants said the Philippine office sector continues to demonstrate steady progress toward recovery.
With policy easing, robust IT-BPM expansion, and active traditional occupiers, the market is expected to sustain positive momentum through the remainder of 2025 and into 2026. As vacancy rates narrow and rents stabilize, prime districts like BGC and Makati are poised to lead the next growth phase.
