THE METRO MANILA office market is anticipated to see continued demand for high-quality and strategically situated properties, but fringe areas are facing oversupply, in keeping with property consultancy firm Cushman & Wakefield.
In its Second Quarter 2025 Philippine Office and Investment MarketBeat report, the consultancy said rental rates for Prime and Grade A offices in central business districts (CBD) reminiscent of Makati, Bonifacio Global City (BGC), and Ortigas rose 0.5% quarter on quarter to P1,118 per square meter (sq.m.) monthly, while emptiness rates improved to 10.5% from 11% within the previous quarter.
“This was driven by a flight-to-quality, with demand fueled by multinational relocations and financial sector expansions,” the report said.
In contrast, office rents in fringe CBD areas fell 1.8% quarter on quarter to P842 per sq.m. monthly, with emptiness rates rising to 23.4% from 22.8% within the previous quarter resulting from persistent oversupply and returned spaces.
Cushman & Wakefield data showed that BGC’s CBD has an existing inventory of two.3 million sq.m., while Ortigas and Makati CBDs each have 1.6 million sq.m. and 1.5 million sq.m., respectively.
Fringe areas, meanwhile, account for a complete of 4.7 million sq.m. of unoccupied office space, led by Quezon City (1.5 million sq.m.), Pasay City (800,000 sq.m.), Muntinlupa City (700,000 sq.m.), BGC (Taguig) fringe (500,000 sq.m.), and Makati fringe (500,000 sq.m.).
“The resilience of Metro Manila’s office market, particularly within the established CBDs, underlines the enduring demand for high-quality and strategically situated properties. Meanwhile, fringe areas would require more progressive approaches to deal with persistent challenges,” Claro dG. Cordero, Jr., director and head of research, consulting & advisory services at Cushman & Wakefield, said in an announcement.
The consultancy noted that fringe areas are prone to proceed experiencing rental adjustments and landlord concessions, with greater than 300,000 sq.m. of additional supply expected through 2027. Elevated emptiness rates and hybrid work trends are also expected to weigh on performance in the perimeter office segment.
“Additional supply in 2025, especially in Quezon City and Muntinlupa, is anticipated to sustain pressure on rents and vacancies in fringe markets,” Mr. Cordero said. “CBDs may proceed to profit from demand for high-quality, well-located office spaces.”
Despite headwinds, Cushman & Wakefield said sustained economic growth and easing inflation highlight the resilience of the Philippine real estate market across sectors.
The Philippine economy expanded by 5.5% within the second quarter, barely higher than 5.4% within the previous quarter but slower than the 6.5% growth in the identical period last yr.
Headline inflation, meanwhile, eased to a near six-year low of 0.9% in July resulting from lower utility and food costs.
“The Philippine real estate market continues to reflect the country’s economic momentum, driven by strong consumption patterns, tourism recovery, and advancing logistics demands. Each sector is adapting to the evolving needs of end-users, creating long-term opportunities for developers and investors alike,” Mr. Cordero said. — Beatriz Marie D. Cruz