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

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