Manila to see 159,000sqm of new office supply in the near term

The supply influx is expected to impact rents.

In a report, JLL said Manila’s steady office leasing activity from the BPO sector is anticipated, though the considerable 159,000 sqm supply influx could pressure some landlords to adjust rates to maintain occupancy levels.

“Rents may soften under new supply pressure entering the market, though premium buildings with solid occupancy are likely to preserve rates. Capital values are anticipated to remain stable with appreciation prospects, as interest rates normalise,” the report added.

Here’s more from JLL:

The office sector recorded 28,700 sqm of positive net absorption, driven by IT-BPO and financial services. Makati City secured a 1,600 sqm IT-BPO lease, while Taguig City secured a 4,500 sqm BPO and a 4,200 sqm financial services deal, reinforcing steady momentum.

Recent relocations show companies pursuing space upgrades, with a BPO firm consolidating 6,000 sqm, a beverage corporation moving 13,000 sqm and a telecommunications company securing 18,000 sqm across key developments in Taguig City.

Vacancy rates sustain improvement amid completion delays as a significant pipeline remains intact

There were no new office completions recorded in Q3, as developers shifted delivery schedules to Q4. Approximately 159,000 sqm of new office supply remains scheduled for end-2025, maintaining a robust development pipeline despite the timing adjustment.

There was a notable vacancy rate improvement in Q3 2025, dropping to 13.9% from the previous quarter, a decline of 58.9 bps. This was driven by steady leasing activity across Makati City and Taguig City, spanning diverse industries.

Rents hold steady while capital values show modest growth

Rents stayed at PHP 1,101.8 per sqm, per month throughout Q3 2025, as landlords adopted conservative pricing strategies for tenant retention amid market pressures.

Capital values climbed modestly by 0.2% in Q3 2025, reaching PHP 187,578 per sqm, and signalling steady investor sentiment.