OVERVIEW
The 2Q 2026 Metro Manila Office Briefing by Savills Philippines highlights a broad improvement in office leasing activity, with vacancy easing and rental rates beginning to firm. However, a significant wave of new supply is expected in the second half of 2026, creating different opportunities and challenges across key business districts.
KEY FINDINGS
- Metro Manila net take-up rose sharply to 129,000 sq m in 2Q 2026 from 25,700 sq m in 1Q
- Overall vacancy improved to 19.0%, from 20.0% in 1Q 2026
- Average rents increased 1.8% to PHP 854.5/sq m/month, marking the first meaningful increase after a prolonged flat period
- Around 337,000 sq m of supply remains scheduled for 2H 2026 and 2027
KEY INSIGHTS
- Office demand is showing a broad-based recovery, with almost all submarkets recording positive absorption
- Quality, PEZA, and green-certified buildings continue to attract stronger tenant demand
- BGC remains the tightest major CBD, with vacancy at 7.4%, while the Bay Area continues to have the highest vacancy
- The recovery remains uneven as upcoming supply could put renewed pressure on vacancy
MARKET IMPLICATIONS
- Vacancy could move above 20% in 3Q 2026 as new supply enters the market
- Landlords of quality and certified buildings are likely to retain stronger pricing power
- Tenants may have greater negotiating leverage in high-vacancy areas such as the Bay Area and Alabang
- BGC and other supply-constrained locations may see continued rental pressure as available quality space becomes limited
FAQ
What is the 2Q 2026 Metro Manila Office Briefing?
It is a quarterly Savills Philippines research report covering office demand, supply, vacancy, rental rates, and market conditions across Metro Manila.
Who should read this report?
Office occupiers, investors, landlords, developers, brokers, and businesses evaluating Metro Manila office opportunities.
What are the main highlights of 2Q 2026?
Leasing activity strengthened significantly, vacancy declined to 19.0%, and rental rates started to recover.
What is the outlook for the rest of 2026?
The market is expected to face a substantial wave of new supply in 2H 2026, which could push vacancy higher despite improving leasing activity.
