MANILA, Philippines — Office rents in Metro Manila are projected to further decline in the coming year mainly due to an oversupply of vacant space, according to a global commercial real estate services firm.
In its latest Asia Pacific Outlook 2025 report, Cushman & Wakefield said average headline rents are forecast to decline by an additional 3.20 percent in
2025.
“Average headline rents are expected to decline further by 3.2 percent in 2024–2025, following a 2.8-percent decline in 2023–2024, due to an oversupply of vacant space,” Cushman & Wakefield said.
Latest figures from Cushman & Wakefield showed that average headline rent of prime and Grade A office developments in Metro Manila closed at P1,003 per square meter per month, 67 basis points lower than the P1,010 per sqm per month in the previous quarter. This is also lower than the P1,041 per sqm per month in the same period a year ago.
In the third quarter alone, the Metro Manila office market registered a vacancy rate of 18.2 percent, 136 basis points lower than the previous year’s levels, the highest level since the second quarter of 2004.
“Due to the volume of expected office space turnover in response to the total ban on Philippine offshore gaming operators (POGOs), annual net absorption drastically declined to 1,500 sqm in 2024 from approximately 271.250 sqm in 2023,” Cushman &
Wakefield said.
From 2025 to 2029, Cushman & Wakefield said it projects the average annual net absorption level to increase by 36 percent compared to the average levels recorded between 2020 and 2024.
“Office space absorption is expected to increase in the medium-term as a flight-to-quality mentality drives demand for innovative office space designs that incorporate collaborative spaces, alongside sustainable facility and property management technologies and practices,” the real estate services firm said.
However, vacancy rates are likely to remain elevated due to space rationalization and completion of new supply.
“The full implementation of the CREATE More Act will allow local IT-BPM companies, among other occupiers, to implement remote work setups, altering space demand growth in the short- to medium-term,” Cushman & Wakefield added.
Cushman & Wakefield earlier attributed an elevated vacancy projection for the medium term to the total ban on POGOs and the implementation of the CREATE MORE Act, which supports flexible work arrangements and will likely result in more vacant spaces.
Source: Philtstar
