According to the latest market report, the vacancy rate of office buildings in the Metro Manila area remains around 20%, and the situation of oversupply is expected to continue until 2027. The withdrawal of the POGO industry and the surplus of new supply are the main reasons, and the decline in rent exacerbates market pressure.
Current Vacancy Rates and Regional Differences
Third-quarter data shows that the overall vacancy rate reached 20.6%, roughly the same as the previous quarter. Regional performance varies: Alabang CBD has the highest vacancy rate at 36.6%, Bay Area at 35.9%, while BGC is relatively low at only 8.3%. Places like Makati CBD have seen a slight decrease in vacancy rates, but the market overall is still oversupplied.
Inventory Structure and Leasing Dynamics
BGC leads with an inventory of 2.26 million square meters, followed by Makati CBD (1.75 million square meters) and Ortigas Center (1.33 million square meters). Net absorption area decreased by 15.65% year-on-year, with leasing activities concentrated in BGC and Ortigas Center, reflecting insufficient demand.
Future Supply and Rent Trends
The future new supply is concentrated, for example, Quezon City will increase by 220,000 square meters of space. The demand from IT-BPM companies cannot digest the inventory, forcing landlords to reduce rents. The core area's monthly rent has dropped to 833.4 pesos per square meter, and it is expected to bottom out at 800 pesos by the end of 2026. The withdrawal of POGO causes market fluctuations, and long-term restructuring is inevitable.
