OFFICE LEASING activity in Metro Manila surged in the primary half of 2025, reaching levels not seen since 2017, as demand from the data technology-business process management (IT-BPM) sector drove a stronger-than-expected recovery, in keeping with Leechiu Property Consultants (LPC).
“We’re all shocked at the quantity of leasing activity in the primary six months of the 12 months — we haven’t seen these levels since 2017,” LPC Founder and Chief Executive Officer David Leechiu said in a news briefing on Thursday.
“Even without the POGOs (Philippine offshore gaming operators), that is the best level of activity we’ve ever seen — and that is despite corporations talking about work-from-home setups and AI (artificial intelligence) taking up jobs.”
In the primary half of 2025, the office market recorded 740,000 square meters (sq.m.) of leasing activity, in keeping with LPC’s Second Quarter Philippine Property Market Report. This figure accounts for 67% of the 1.1 million sq.m. total demand recorded for the total 12 months of 2024.
“In previous years, we’ve also seen strong take-up within the second half, so we’re banking on the likelihood that demand might be even higher by yearend,” LPC Director for Business Leasing Mikko Barranda said on the sidelines of the briefing.
The Metro Manila office market experienced a slowdown within the second half of 2024, following the exit of POGOs and uncertainties stemming from the US presidential elections.
While US tariffs may introduce recent risks to the market, Mr. Barranda said, “We didn’t see any direct effect on the office sector. So, if all the things goes well, we would just see this momentum carry over for the remainder of the 12 months.”
The IT-BPM sector stays the backbone of the office market, accounting for 365,000 sq.m. of take-up in the primary half of 2025 — corresponding to 86% of its full-year demand in 2024, LPC said.
As of end-June, the country had about 3.2 million sq.m. of office supply, with 2.7 million sq.m. positioned in Metro Manila and 615,000 sq.m. within the provinces.
Bonifacio Global City (BGC) recorded the bottom office emptiness rate at 10%, while the best vacancies were seen within the Bay Area (27%), Alabang (25%), and Taguig (25%).
On average, office deals ranged between 2,000 sq.m. and 5,000 sq.m., with more tenants preferring buildings lower than 10 years old.
OVERSUPPLY
Condominium oversupply in some areas of Metro Manila grew in the primary half of the 12 months, whilst buyer activity improved, in keeping with LPC Director for Research and Consultancy Roy Amado L. Golez, Jr.
Residential demand posted two consecutive quarters of growth, with 6,643 units sold. Recent launches also rose by 31% from the previous quarter to 1,761 units.
Metro Manila’s condominium inventory rose to 82,800 units — corresponding to three years’ price of supply.
“[Condominium inventory] grew barely despite demand for six,600 units, primarily resulting from recent launches in addition to cancellations or blackouts,” Mr. Golez said. “In consequence, we at the moment are right down to 37 months of inventory from previous quarters. It’s still flat.”
Quezon City accounts for the most important share of unsold units at 19,500, followed by Ortigas with 15,000, the Bay Area with 13,800, and Manila with 11,400.
Take-up within the residential market has yet to return to pre-pandemic levels, Mr. Golez said, adding that developers remain cautious with recent launches.
Despite recovering sales, rental rates remained soft, with the Bay Area posting the steepest decline at 50%. Rental yields ranged from 2% to eight%, indicating “relatively modest returns for property investors,” LPC said.
Expected rate of interest cuts by the Bangko Sentral ng Pilipinas (BSP) could support stronger residential demand, Mr. Golez said.
“We hope that home loan rates of interest will improve, making it more palatable for investors to buy units through financing and, at the identical time, offer them for rental income,” he said.
The BSP recently said it has room for 2 more rate cuts amid a moderating inflation outlook. Last month, it lowered rates of interest by 25 basis points to five.25%. — Beatriz Marie D. Cruz