MM office vacancy eased in Q4 ’25

Metro Manila’s office market showed incremental improvement in the fourth quarter of 2025, with vacancy rates easing as demand in key central business districts (CBDs) outpaced new supply, according to Cushman & Wakefield (C&W).

In its latest Philippine Office and Investment Market Beat, the global property consultancy said overall Prime and Grade ‘A’ office vacancy rates across Metro Manila narrowed by 40 basis points quarter-on-quarter to 17.9 percent, down from 18.3 percent in the previous quarter.

Vacancy levels in core CBDs—Makati, Bonifacio Global City and Ortigas Center—declined to 10.4 percent, supported by steady leasing activity from the information technology–business process management sector, particularly Global Capability Centers and expanding multinational firms.

C&W said despite improved absorption, vacancy reductions were tempered by the completion of 190,000 square meters of new office supply during the quarter, 36 percent of which remains vacant.

Rental conditions remained under pressure. CBD rental rates fell by 1.89 percent quarter-on-quarter, with average rents declining to P1,093 per square meter per month, as landlords with higher vacancies adjusted pricing to attract tenants.

In contrast, decentralized office markets recorded stable rents at P815 per square meter per month, although vacancy levels remained elevated at 25.7 percent.

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Estimated average office yields for Prime and Grade ‘A’ developments slipped marginally to 6.92 percent, reflecting cautious investor sentiment amid persistent supply and rental pressures.

C&W noted emerging structural shifts in occupier preferences, with growing demand for modern, sustainable offices and early signs of renewed activity in prime markets.