Steady leasing momentum underpins Manila 2026 office outlook

A total of 18,100sqm of space was taken up in Q4 2025 alone.

Manila’s office market closed 2025 on a stable footing, supported by sustained leasing demand and a robust development pipeline that is expected to shape market dynamics heading into 2026, according to the latest research from JLL.

In its year-end report, JLL noted that the office sector maintained positive net absorption, with 18,100 square metres of space taken up in Q4. Activity was heavily concentrated in Taguig City, which emerged as the primary growth driver for the market. Anchor transactions from IT-BPO and financial services firms accounted for 15,600 square metres of demand in Taguig alone, reinforcing the district’s position as a preferred destination for large occupiers seeking high-quality space.

Meanwhile, Makati City saw corporate occupiers contribute an additional 900 square metres of net absorption. JLL highlighted that while expansion activity continued, space optimisation strategies and a flight-to-quality trend remained evident across key districts. A BPO firm vacated 1,100 square metres in Makati City, while corporate occupiers gave up 1,400 square metres in Taguig City as tenants recalibrated their real estate footprints in favour of newer, more efficient buildings.

Vacancy rates held largely stable despite these occupancy shifts. JLL reported that overall vacancy inched up to 14.1 per cent in the fourth quarter of 2025, a 22.4-basis-point increase from the previous quarter. The modest uptick was primarily attributed to the completion of two office developments in Taguig City, which together delivered 33,800 square metres of new space to the market. Several other projects experienced completion delays and are now slated for delivery in the first quarter of 2026.

Looking ahead, JLL underscored the strength of the pipeline, with approximately 297,300 square metres of new office supply scheduled for completion by year-end 2026. This influx is expected to keep competition elevated among landlords, particularly in submarkets with significant new stock.

Despite the additional supply, rental rates remained stable through the fourth quarter, averaging PHP 1,089.4 per square metre per month. According to JLL, landlords have prioritised tenant retention and occupancy stability over aggressive rental growth amid evolving market conditions. However, capital values posted moderate gains, rising 1.2 per cent quarter-on-quarter to PHP 189,828 per square metre, reflecting sustained investor confidence in the sector.

JLL projects a steady growth trajectory for Manila’s office market in 2026, underpinned by continued leasing demand from IT-BPO, technology and financial services occupiers. The firm noted that the ongoing flight-to-quality trend is likely to benefit premium developments, even as the substantial pipeline may place downward pressure on rents in more competitive segments.

While new supply additions could weigh on headline rental growth, JLL expects prime buildings to maintain current rate levels. Capital values are anticipated to remain steady, with potential for further upside as interest rates stabilise and investor sentiment continues to improve.

Overall, JLL’s outlook points to a market defined by resilient demand, disciplined landlord strategies and a development cycle that will test — but ultimately reinforce — the strength of Manila’s core office districts.