
The country’s office, hospitality, and retail markets are expected to expand this year, offering a silver lining despite the mixed performance of the real estate industry in 2024, global real estate services firm JLL Philippines said on Tuesday.
During the JLL Q4 2024 Market Overview press conference, Janlo De los Reyes, head of Research and Consulting at JLL Philippines, reported that Metro Manila's gross leasing volumes grew by 27.3 percent year-on-year, with 583,728 square meters of leased properties compared to 458,470 sqm in 2023.
Taguig City led Metro Manila in office leasing transactions with 151,030 sqm, followed by Makati (107,602 sqm) and Quezon City (79,353 sqm).
Corporate/traditional occupiers accounted for 44.6 percent of office leasing volumes, business process outsourcing (BPO) tenants made up 40.7 percent, and internet gaming licensees comprised 14.7 percent.
“We project leasing volumes to remain stable throughout 2025, reaching around 600 to 700,000 sqm, supported by the BPO and traditional office demand. We expect soft leasing to persist as hybrid work arrangements continue to shape the office landscape. Nevertheless, we still expect solid interest coming from BPO and corporate occupiers to enter the market,” De los Reyes told reporters.
For the retail market, De los Reyes noted sustained growth in store openings across Metro Manila’s prime malls. A total of 40,820 sqm of retail space was opened in the fourth quarter of 2024, slightly down from 59,988 sqm in 2023.
Local brands dominated new store openings at 63 percent, while foreign entrants accounted for 37 percent, reflecting continuous expansion in the sector.
In the hospitality sector, the occupancy rate in Q4 2024 was 83.2 percent, with 44,600 rooms occupied, slightly lower than the 86.4 percent occupancy rate or 43,300 rooms during the same period in 2023.
“For the hospitality market, full-year tourist arrivals stood at 5.9 million but fell short of the 7.7 million targets of the government. But one thing worth noting is that despite this, we are still seeing a growth in tourist arrivals of around 9.2 percent year-on-year. We anticipate tourist arrivals to continue recovery in 2025, which will benefit the hospitality sector as a whole,” De los Reyes reported.
2025 outlook
Looking ahead, De los Reyes said the office market is expected to face continued pressure from high vacancy rates.
“The retail segment, on the other hand, shopping centers will have to be more experiential, as a lot of redevelopment and mall expansions will be happening in 2025, which will define the shopping mall developments in the future as we see a lot of opportunity for this market. For the hospitality market, we are expecting it to grow together with the retail market due to the increase in tourist arrivals in the country,” he said.