Metro Manila’s office market showed strong signs of recovery in the first quarter of 2025, according to Colliers International Philippines. After a quiet 2024, leasing activity picked up, helped by renewed tenant demand and the return of pre-leasing deals — the first since 2022.
Net office take-up reached 77,100 square meters in Q1, already covering more than half of Colliers’ full-year forecast. Fewer space givebacks and nearly 97,000 sq. m. of new office completions in Makati, Quezon City and Fort Bonifacio contributed to this boost. Leasing transactions rose 66 percent from the previous quarter, totaling 237,700 sq. m. Traditional firms led the way, followed by outsourcing and shared service providers. Most transactions were driven by expansions.
“Despite global challenges, office demand is holding steady,” said Colliers Office Services-Tenant Representation director Kevin Jara. “More businesses are looking for quality space at better prices.”
Makati’s central business district stood out with falling vacancy rates and rising lease prices. Premium office rents rose 3.1 percent quarter-on-quarter, hitting P2,400 per sqm. With no major new buildings expected until 2029, Colliers predicts Makati could become a landlord’s market by 2026.
To support future demand, Colliers backs proposed zoning changes that would allow taller buildings and mixed-use projects in Makati. The firm also calls for the passage of the “Condominium Redevelopment Act” to encourage upgrades to older buildings.
Colliers revised its 2025 supply forecast downward to 612,300 sq. m. due to construction delays, with most new space expected in Quezon City, Makati Fringe and the Bay Area. Overall vacancy across Metro Manila stood at 19.7 percent in Q1 and may rise to 22 percent by year-end due to ongoing space returns and global uncertainties.
Office demand outside Metro Manila also remained solid, with provincial transactions growing 18 percent year-on-year to 54,900 sq. m. Cebu led regional deals, followed by Pampanga and Davao, with activity from firms like Teleperformance, Genpact, and UPC BioEnergy.
Colliers urges companies to take advantage of the current tenant-friendly environment. With flexible terms and better spaces available, now is the time to relocate, expand, or pre-lease. The firm also recommends a “flight to value” strategy — prioritizing quality and location.
For landlords, staying competitive means offering flexible leases, upgrading older buildings, and responding to shifting tenant needs. While risks remain, early 2025 momentum points to a more stable and resilient office market ahead.