Manila has 4th cheapest prime office rent in Asia-Pacific in Q4

In the fourth quarter, the Philippine capital was the fourth most affordable city for prime office rent among 23 Asia-Pacific markets, based on the latest edition of the Asia-Pacific Office Highlights by real estate consultancy Knight Frank.

During the period, Manila’s occupancy cost amounted to $29.04 per square foot, dropping by 0.6%. It was lower than the 0.7% average growth of the region.

Source: Business World

Metro Manila office rents seen to rise in some districts

Metro Manila’s key business districts are expected to face upward pressure on office rents this year, driven by strong demand from multinational firms and business process outsourcing tenants, analysts said.

“Rental performance will continue to be highly district-specific,” Mikko Barranda, director for commercial leasing at Leechiu Property Consultants, said.

Submarkets such as Bonifacio Global City (BGC) are likely to see upward pressure on rents as demand outpaces available supply, he said.

BGC posted the lowest vacancy rate among Metro Manila office submarkets at 9% as of end-2025, according to Leechiu Property Consultants’ Fourth-Quarter Property Market Report.

In contrast, districts with double-digit vacancy rates include Makati City (15%), Ortigas and Mandaluyong City (18%), Quezon City (19%), Taguig City (21%), Alabang (23%), and the Bay Area (28%).

“This trend will be reinforced by limited new completions and strong flight-to-quality preferences among multinational occupiers,” Mr. Barranda said.

He added that major central business districts (CBDs) such as Makati and BGC are expected to continue benefiting from strong tenant preference, constrained new supply, and sustained interest from multinational companies.

Submarkets with higher vacancy levels, however, may see “relatively flat rental growth in the near term,” he said.

Office rents in Metro Manila will remain a “case-to-case” scenario, said Kevin Jara, head and director of office services — tenant representation at Colliers Philippines.

“In established business districts with limited available space, such as Makati CBD, BGC and Ortigas CBD, we expect modest year-on-year rental growth in the range of 1% to 5%, supported by low vacancy levels,” he said in an e-mail.

“So far, we are not seeing any major space surrenders similar to the levels during the POGO (Philippine Offshore Gaming Operators) exodus, that could materially increase vacancy and put downward pressure on rents,” Mr. Jara noted.

However, Colliers is monitoring potential risks to office demand, including corporate layoffs overseas and the progress of proposed outsourcing-related bills in the United States, he said.

These include the Keep Call Centers in America Act and the Halting International Relocation of Employment (HIRE) Act, which aim to protect US-based call center jobs amid rising offshoring and the use of artificial intelligence-powered bots.

The Keep Call Centers in America Act seeks to limit federal benefits granted to companies that outsource call center jobs overseas.

Meanwhile, US Senate Bill 2976, or the HIRE Act, proposes a 25% excise tax on American firms’ payments to foreign service providers for work consumed in the United States.

Jamie S. Dela Cruz, research manager at Savills Philippines, said office rents in Metro Manila’s CBDs are likely to remain tenant-favorable overall.

She noted that elevated vacancy levels in some districts continue to give locators greater flexibility in lease negotiations, she said.

“Despite this, office demand continues to be supported by the information technology-business process management sector, as the industry works to remain competitive by enhancing skills and attracting more global shared services,” Ms. Dela Cruz said.

She added that higher-quality, green-certified office buildings continue to command higher asking rents.

“Less competitive office stock that remains vacant could put pressure to the overall market and potentially further soften rental rates,” she said.

Data from Leechiu Property Consultants showed that as of end-2025, BGC remained the most expensive office submarket at P1,167 per square meter (sq.m.), followed by Makati City at P891 per sq.m.

Other office rental rates were recorded in the Bay Area and Pasay City at P798 per sq.m., Alabang and Muntinlupa City at P787 per sq.m., Ortigas and Mandaluyong City at P738 per sq.m., and Taguig City at P724 per sq.m.

Source: Business World

Modernization key as tenants raise standards

Tenant demand for resilient, green-certified buildings is pushing Philippine developers to modernize projects and tighten compliance, analysts said.

Property developers must ensure that their projects are updated with current building codes and leverage the expertise of third-party evaluators as more tenants prioritize safety and sustainability in their choice of office and residential spaces.

“Global occupiers increasingly prioritize buildings that are disaster-resilient, energy-efficient, and structurally sound, as this supports business continuity, employee safety, and talent retention,” Erika Recomite-Manasan, senior manager for commercial leasing at Leechiu Property Consultants, said.

She said developers that consistently modernize and upgrade their buildings are more likely to attract and retain occupiers compared to outdated properties.

The need for compliance was underscored last month when the Department of Environment and Natural Resources (DENR) flagged the Monterrazas de Cebu residential project for multiple violations of environmental standards.

Developers must secure all required permits and clearances before construction, Ms. Manasan said. These include zoning and building permits from local governments, an environmental compliance certificate from the DENR, utility clearances, an occupancy permit and a fire safety certificate.

Developers must likewise comply with geotechnical and soil testing, structural analysis under the Department of Public Works and Highways and occupational safety and health requirements from the Department of Labor and Employment.

“We advise occupiers to seek the expertise of independent third-party organizations (architectural and engineering firms) to vet the structural integrity of the building, its resilience to fire, earthquake, and flood,” she said.

Ms. Manasan also noted that more tenants are favoring developments with green building certifications amid the looming climate crisis.

These include the US Green Building Council’s LEED (leadership in energy and environmental design) certification; the International WELL Building Institute’s WELL certification; and the International Finance Corp.’s EDGE (excellence in design for greater efficiencies) certification.

Nigel Paul C. Villarete, senior adviser at technical advisory group Libra Konsult, cited the need for local governments to regularly review their comprehensive land use plans  to ensure that real estate developments comply with environmental, social and economic goals.

“It has to be revisited as frequently as possible, because development is constant, especially in urban areas like Metro Manila, Metro Cebu and other metropolitan areas,” he said.

Source: Business World