The Philippine office market closed 2025 on firmer ground as demand broadened, vacancies eased, and leasing activity exceeded expectations. Despite global challenges and evolving workplace dynamics, the sector continued to build on its recovery, supported by expanding IT-BPM activity and renewed engagement from traditional occupiers. Year-to-date demand reached 1.22 million sqm, already surpassing full-year 2024 levels and reinforcing the market’s resilience.

Steady and Broad-Based Office Leasing Growth

Leasing demand grew by 10% year-on-year, totaling 1.22 million sqm as of December 2025. The IT-BPM sector remained a significant driver, accounting for 32% of transactions or 549,000 sqm. Traditional corporates, government agencies, and PIGO tenants contributed 68% or 671,000 sqm, underscoring the breadth of demand across industries. Expansion deals were the dominant transaction type across both segments.

BGC and Cebu Lead Market Activity

Bonifacio Global City maintained its position as the most active Metro Manila district with 218,000 sqm in closed transactions, representing a 73% increase from 2024. Quezon City and the Ortigas–Mandaluyong corridor followed with 169,000 sqm and 155,000 sqm, respectively.

Outside Metro Manila, Cebu continued to outperform, capturing 150,000 sqm or 55% of all provincial take-up, driven by sustained interest from IT-BPM firms and traditional occupiers alike.

Vacated Space Drops Significantly in Q4

A notable improvement in 2025 was the sharp decline in vacated office space. Vacancies dropped by 59% quarter-on-quarter, from 205,000 sqm in Q3 to only 85,000 sqm in Q4. Much of the vacated area came from relocations rather than downsizing, particularly among IT-BPM occupiers. Year-to-date, the sector saw 221,000 sqm of vacated space, with consolidation efforts helping stabilize supply conditions.

Net Take-Up Closes the Year on a High Note

Net take-up for 2025 reached 476,000 sqm, up 13% from 2024. Despite elevated vacated space earlier in the year, consistent demand and fewer major exits allowed absorption to gain momentum. The improvement highlights occupiers’ continued confidence in maintaining or expanding their physical office footprint.

Tight Conditions in BGC and Makati Set the Stage for Rental Recovery

Metro Manila’s overall vacancy rate stands at 18%. BGC maintains the lowest vacancy at 9%, while Makati follows with 15%. Both markets continue to have lean development pipelines, positioning them for faster rental recovery in the coming years. Nationwide, the supply pipeline remains manageable, with about 2.3 million sqm slated for completion over the next five years and 1.9 million sqm expected across Metro Manila from 2026 onwards.

What’s Ahead for 2026

Early indicators point to a steady 2026. Active leasing requirements currently total 350,000 sqm, with 85,000 sqm already under negotiation. IT-BPM expansions, the rise of Global Capability Centers, and continued activity from traditional sectors are expected to sustain demand. While hybrid work remains an ongoing consideration, most occupiers continue to pursue high-quality, well-located office spaces as part of long-term workplace planning.

”The Philippine office market continues to demonstrate consistent demand as it closes the year with 1.22 million square meters, a milestone achieved by only a handful of markets globally. This performance underscores the sector’s enduring relevance despite ongoing global headwinds, geopolitical uncertainty, and economic volatility.” — Mikko Barranda, Director for Commercial Leasing at Leechiu Property Consultants

As office demand continues to evolve, staying informed is essential for occupiers, developers, and investors alike. Explore more research and download the full Q4 2025 Philippine Property Market Report at leechiu.com/market-insights.