The office market in Metro Manila is showing strong signs of recovery as vacancy rates dip to their lowest levels since 2019. Major business districts like Makati CBD and Bonifacio Global City are seeing a resurgence in leasing activity.
BPO Sector leading the charge
The Business Process Outsourcing (BPO) industry remains the primary driver of office demand, accounting for over 60% of new transactions in Q4 2025. With many companies enforcing return-to-office mandates, physical workspace is once again at a premium. Companies are looking for spaces that foster collaboration, something that was missed during the years of remote work.
This resurgence is not just limited to traditional call centers. Knowledge Process Outsourcing (KPO) firms, which specialize in higher-value services like legal, financial, and medical research, are also expanding their footprint.
New Supply vs. Demand
New supply entering the market in upcoming quarters is expected to be absorbed quickly, keeping rental rates competitive but stable. Analysts predict a rental growth of 3-5% in prime locations over the next 12 months. Developers who paused construction during the pandemic are now rushing to complete projects to meet this renewed demand.
Flight to Quality
Tenants are increasingly prioritizing premium, LEED-certified buildings that offer better amenities and sustainability features, leaving older Grade B buildings with higher vacancy rates. Features like advanced air filtration systems, touchless elevators, and green spaces are now non-negotiable for many multinational tenants.
The Future of Flex Spaces
Another emerging trend is the demand for flexible workspaces. Companies are opting for hybrid models where they maintain a smaller core office but utilize co-working spaces for satellite teams. This shift allows for greater agility and cost-efficiency in a fluctuating economic climate.
