Metro Manila rental yields may stay flat in 2026

Rental Yields in Metro Manila’s residential market are expected to remain flattish next year amid weak investor demand and lingering condominium oversupply, property consultants said.

“Yields will likely remain flat for the year 2026, with core central business districts (CBDs) recovering faster,” Roy Amado L. Golez, Jr., director for research, consultancy, and valuation at Leechiu Property Consultants (LPC) said.

“Rents in Bonifacio Global City and Taguig have already exceeded pre-pandemic numbers, while other locations remain at a significant discount. This situation will persist until supply is taken up,” he said.

Joey Roi H. Bondoc, director and head of research at Colliers Philippines, said rental yields will likely stay flattish next year as residential demand is driven mainly by end-users rather than investors.

“I think one reason why the ready-for-occupancy promos, for example, of certain developers are working is because the demand is actually end-user driven,” he said in a phone interview.

In Metro Manila, residential rental yields averaged 4.1% in the primary market, or properties sold by developers to end-users, LPC said in its fourth-quarter property market report.

Meanwhile, secondary market yields — which cover pre-owned units offered for sale or for rent by their owners — averaged 4.8%, based on LPC data.

“Secondary market units will continue to generate higher yields versus primary market units, since buyers will be acquiring units from sellers who bought these units at much lower prices,” Mr. Golez said.

Mr. Bondoc added that Metro Manila’s primary residential market continues to face an oversupply of 30,400 unsold units, equivalent to about eight years’ worth of inventory.

Most of the region’s condominium inventory falls under the affordable to lower middle-income segment, with units typically priced between P2.5 million and P6.99 million, Colliers data showed.

“Current prices of condominiums are on the high side, and with challenging rents, this results in lackluster yields. To boost rental yields, prices should remain flat — since we don’t really see widespread price cuts — to allow the market to catch up,” Mr. Golez said.

Joe Curran, chief executive officer at Savills Philippines, expects rental yields in the region to be “broadly stable to slightly firmer” next year, at around 4% to 6%.

He said lower interest rates, return-to-office mandates, and the long-term stay of expatriates and students could help lift rental demand in Metro Manila’s residential market.

To improve rental yields, developers should adopt a more disciplined launch pipeline for condominium projects, Mr. Curran said.

He also cited the need for stronger marketing and proactive maintenance to make unsold condominium units more attractive for leasing.

“While Metro Manila stock continues to grow, supply that remains aligned with genuine end-user and rental demand should support stronger pricing power over the medium term,” Mr. Curran said in an e-mailed reply to questions.

For 2026, Colliers projects residential vacancy to ease to 26% from 26.5% as of end-2025, as developers slow the launch of residential projects in Metro Manila.

Source: Business World

Flexible workspaces may sustain growth in 2026

The Philippines' flexible workspace market is set to expand further this year as global capability centers (GCC) and multinationals increase their presence in key business districts and regional hubs, analysts said.

“We expect continued growth in the flexible workspace sector, supported by both local and global trends,” Mikko Barranda, director for commercial leasing at Leechiu Property Consultants, said in an e-mailed reply to questions. “Global economic uncertainty and cost optimization requirements will reinforce demand further to look for adaptable solutions.”

GCCs, or in-house service hubs of multinational companies, continue to see the Philippines as a key location for talent and cost efficiency.

“For many of these companies, flexible workspaces provide a low-risk entry point before committing to larger, long-term offices,” Mr. Barranda said.

He added that flexible workspaces — offering hot desks, pods, meeting rooms and lounges — have become a staple in corporate real-estate strategies. These models attract project-based teams and market entrants looking to scale operations amid uncertain global conditions and high leasing costs.

Local coworking operator GreatWork Global Workspaces plans to double its footprint by 2026 to capture rising demand.

“We have a strong pipeline of local and international companies requesting GreatWork locations in areas where they are scaling operations and hiring talent,” Ruth Coyoca, assistant vice-president for sales and business development at GreatWork Global Workspaces, said.

GreatWork is in talks with more than 20 landlords across Metro Manila, Clark, Cebu and select regional business districts. Its offices offer coworking areas, private suites and virtual office services with designs featuring natural light, ergonomic layouts and premium finishes.

In 2025, the company recorded about 90% occupancy in its Quezon City and Mandaluyong branches.

About 60% of its tenants are foreign companies — including business process outsourcing and Fortune 500 companies — while 40% are Filipino-led enterprises and government clients.

“This mix provides resilience across economic cycles and reinforces our positioning as a premium, enterprise-ready coworking operator,” Ms. Coyoca said.

Source: Business World

U.S. Offshoring Bill and Its Impact on the Philippine IT-BPM Sector

A new proposal in the U.S. Congress, the Keep Call Centers in America Act, has once again stirred discussion about the future of offshoring and its possible impact on the Philippines’ Information Technology and Business Process Management (IT-BPM) industry.

If enacted, the bill would require call center agents to disclose their location at the start of each customer call and give U.S. consumers the option to speak with an agent based in the United States. It would also require U.S. companies to notify the government 120 days before moving operations offshore. Firms that fail to comply, particularly those receiving government contracts or tax incentives, could face penalties or even blacklisting.

For the Philippines, where nearly 1.9 million Filipinos are employed in the IT-BPM sector and where the industry accounts for about 45% of total office leasing activity, the proposal naturally draws attention.

Temporary Concern, Long-Term Strength

While the measure has raised some concern, similar proposals have been introduced in the past without advancing into law. The Philippine IT-BPM sector has consistently proven resilient in the face of shifting global policies, supported by strong fundamentals and adaptability.

Our data shows that IT-BPM firms remain the primary driver of office demand across the country. Regional hubs such as Cebu, Clark, and Davao continue to attract expansion from outsourcing companies drawn to the deep talent pool, improving infrastructure, and increasing availability of Grade A office spaces suited for outsourcing operations.

Even if some U.S. clients take a more cautious approach, the Philippines retains a clear competitive advantage. Based on U.S. labor data, a U.S.-based call center agent typically costs around $30–$40 per hour, including wages, benefits, and training. By comparison, a Philippine-based agent costs about $12–$15 per hour all-in, a significant difference that continues to make the country a cost-effective and reliable choice.

Why the Industry Remains Resilient

Beyond cost savings, global firms value the Philippines’ skilled, English-proficient workforce, business-friendly environment, and modern, BPO-ready office spaces that meet evolving operational and sustainability standards.

In Cebu, for example, office absorption remains healthy due to the city’s strong IT-BPM presence and access to a consistent talent pipeline from across the Visayas. This ongoing activity reflects how outsourcing firms continue to grow in the Philippines even amid global uncertainty.

Outlook: A Continued Bright Spot for the Economy

Although the Keep Call Centers in America Act may create short-term uncertainty, many industry observers believe it is unlikely to become law given the high labor costs and persistent worker shortages in the United States.

Looking ahead, the IT-BPM sector is expected to remain one of the strongest pillars of employment, office demand, and economic growth in the Philippines. With competitive costs, proven expertise, and continued investor confidence, the country is well-positioned to stay a top global destination for outsourcing in the years ahead.

Source: Leechiu