Office take-up outpaced by new supply, vacancy to hold at 20% — Savills

OFFICE VACANCY in Metro Manila is expected to hover around 20% this year, as take-up from healthcare and business process outsourcing (BPO) tenants is outpaced by new supply, according to real estate consultancy Savills Philippines.

“I think office vacancy will remain at more or less 20% in 2026 because of new supply being completed,” Savills Philippines Chief Operating Officer Rosario “Cha” P. Carbonell said during the firm’s property market briefing on Wednesday.

“Maybe there will be more transactions in 2026, but at the same time, a lot of that will be offset by transactions that will likely come from tenant relocations,” she added.

For 2026, the Metro Manila office market has an upcoming supply of 403,806 square meters (sq.m.), Savills said.

Nearly half (43%) of the new supply will come from the Bay Area, 19% from the Makati central business district (CBD), 12% from Bonifacio Global City (BGC), 12% from Ortigas Center, with the rest located in Quezon City (10%) and the Alabang CBD (4%).

“Beyond 2026, new office supply is expected to thin out significantly, reflecting more cautious development activity,” the report noted.

About 770,000 sq.m. of office transactions were recorded in 2025, with 75% classified as relocations and 25% as expansions.

The information technology-business process management sector accounted for 58% of demand last year, followed by traditional firms (31%), flexible office spaces (7%), and government tenants (4%).

John Corpus, executive director of tenant representation at Savills Philippines, said demand has been concentrated in PEZA-accredited and green-certified buildings.

Meanwhile, office rentals softened in 2025 amid elevated vacancies, he added.

Average rents last year were highest in BGC at P1,024 per sq.m., followed by the Makati CBD (P973 per sq.m.), Bay Area (P699 per sq.m.), Quezon City (P667 per sq.m.), Ortigas Center (P646 per sq.m.), and Alabang CBD (P572 per sq.m.). — Beatriz Marie D. Cruz