The Metro Manila property market is expected to sustain growth this year, although developers and investors will need to closely monitor supply dynamics and broader economic conditions, according to Jones Lang LaSalle (JLL) Philippines.

In a statement on Friday, March 6, JLL Philippines said it maintains a “cautiously optimistic” outlook for 2026, expecting continued expansion across major real estate segments following a strong performance in 2025.

“Metro Manila’s real estate market demonstrated strong underlying fundamentals throughout 2025, with office, retail, and logistics sectors delivering particularly solid performance,” said Janlo de los Reyes, head of research and strategic consulting at JLL Philippines.

“Our outlook for 2026 reflects cautious optimism as we anticipate steady market ascent while navigating supply absorption dynamics, infrastructure project timelines, monetary policy impacts, and tourism recovery—factors that will shape opportunities in emerging locations,” he added.

JLL Philippines said infrastructure development will remain a key catalyst for property growth, particularly as major connectivity projects near completion.

Among the projects expected to support real estate expansion this year are the Cavite-Laguna Expressway (CALAX), C5 South Link Expressway, and North Luzon Expressway (NLEX)-South Luzon Expressway (SLEX) Connector Road.

These transport links are expected to improve accessibility across key corridors, potentially unlocking development opportunities in emerging locations.

JLL Philippines also noted that Metro Manila’s property development pipeline through 2030 signals sustained investor confidence, with significant new supply planned for office space, retail areas, residential units, hotel rooms, and logistics and industrial facilities across several provinces.

The optimistic outlook follows a strong showing across multiple property segments last year.

The office market posted one of the biggest gains, with gross leasing volume jumping 71.5 percent year-on-year in 2025.

The business process outsourcing (BPO) sector accounted for 64 percent of demand, while corporate occupiers represented the remaining 36 percent.

According to de los Reyes, total office transactions last year reached close to one million square meters (sqm), the highest volume since 2022 and continuing the recovery in leasing activity.

Taguig City emerged as the top-performing location, with the Bonifacio Global City (BGC) business district driving demand, while Makati City recorded the fastest annual growth in leasing activity at 92.2 percent.

However, office vacancies rose to 18.6 percent in the fourth quarter as new supply entered the market and companies continued rightsizing operations while shifting to green-certified buildings.

The retail sector also gained momentum late in the year.

Retail openings rose 34 percent in the fourth quarter, while store closures dropped 60.8 percent, signaling renewed expansion by retailers.

Food and beverage establishments accounted for 27.1 percent of new openings, followed by clothing and apparel retailers at 14.8 percent and general retail at 11 percent.

Total retail supply reached 7.9 million sqm, while rental rates rose modestly by 1.3 percent year-on-year.

Meanwhile, the residential condominium market showed improving demand, particularly in the midscale and upscale segments.

Pre-selling take-up rates reached 78.6 percent for midscale units and 85.2 percent for upscale and luxury developments, supported partly by steady remittances from overseas Filipinos (OFs).

The hospitality sector also maintained strong occupancy levels.

Hotels in Metro Manila recorded 82-percent occupancy in 2025, slightly below the previous year’s 83 percent but still reflecting solid demand from leisure travel, corporate events, and staycations.

International tourist arrivals reached about 6.5 million last year, up from 5.9 million in 2024, helping support hotel demand.

Meanwhile, the logistics and industrial segment expanded significantly, with warehouse inventory rising as developers ramped up speculative developments.

Speculative warehouse supply grew 34.2 percent year-on-year, far outpacing the 2.2-percent increase in built-to-suit facilities, indicating developers’ confidence in demand for ready-to-lease logistics space.

Vacancy rates remained tight in several logistics hubs, including the provinces of Cebu, Pampanga, Batangas, and Laguna, where vacancy levels stayed below four percent.

Despite the strong 2025 performance, JLL Philippines said the property market’s trajectory this year will depend on how quickly new supply is absorbed and how macroeconomic conditions evolve.

Still, JLL Philippines expects steady growth across sectors, supported by infrastructure development, tourism recovery, and continued investor confidence in the Philippine property market.