Metro Manila’s office landscape faces a continuing challenge: a significant vacancy rate projected to remain around 20% throughout the year. Despite growing interest from key sectors, the influx of new office spaces is currently outpacing demand, creating a complex dynamic for landlords and tenants alike.
The surge in available space, totaling over 400,000 square meters for 2026, is heavily concentrated in specific areas. The Bay Area leads with nearly half of the new supply, followed by the bustling Makati central business district, Bonifacio Global City, and Ortigas Center, each contributing a substantial portion.
Interestingly, a large percentage of recent office activity isn’t expansion, but rather companies shifting locations. Last year, approximately 75% of all transactions involved tenants relocating, suggesting businesses are actively seeking better terms or more suitable spaces within the city.
The business process outsourcing (BPO) industry remains a dominant force, driving over half of the overall demand for office space. Traditional companies account for a significant 31%, while flexible workspaces and government entities contribute the remaining percentages.
A clear preference is emerging among tenants: buildings accredited by the Philippine Economic Zone Authority (PEZA) and those with green certifications are attracting the most attention. This indicates a growing emphasis on operational efficiency and sustainability within the business community.
This abundance of space has inevitably put downward pressure on rental rates across Metro Manila. While BGC commands the highest average rent, followed closely by Makati, rates remain competitive in areas like the Bay Area, Quezon City, Ortigas Center, and Alabang.
Looking ahead, the pace of new office construction is expected to slow considerably. Developers are adopting a more cautious approach, carefully evaluating market conditions before committing to new projects, signaling a potential shift towards a more balanced supply and demand scenario.
