Metro Manila’s office vacancy rate is set to tighten through 2026 as pullback in new construction and resilient demand from traditional corporate tenants stabilize the capital’s property market, according to Colliers.
The real estate consultancy said in a report released on Monday, Feb. 10, the vacancy rate in the national capital region (NCR) is projected to fall to 18.9 percent this year from 19.8 percent in 2025.

The optimistic outlook follows a year in which net take-up—a key measure of office demand—reached 309,000 square meters, exceeding initial industry estimates of 285,000 square meters.

Colliers noted that office demand in 2025 was driven largely by traditional firms and government agencies, while third-party outsourcers and shared services companies continued to provide stable take-up despite global and domestic headwinds.

For 2026, net absorption is projected to rise to 400,000 sqm, supported by sustained occupier demand and the continued easing of space surrenders. Vacancy is expected to improve further as developers temper new office completions.

Outside Metro Manila, office demand also increased, driven by Cebu and other key regional markets.

The consultancy warned that limited new supply could constrain future growth, prompting landlords and developers to undertake long-term planning for office pipelines in major central business districts (CBDs) and key provincial markets.

Value-based rental pricing will be critical, the report said, with rent adjustment needing to be backed by refurbishments, sustainability features and enhanced amenities, while flexibility remains key in high-vacancy submarkets.

“Despite persistent global and local headwinds, the Philippine office market delivered a stronger-than-expected finish in 2025, signaling a clear return towards a more normalized

environment as demand, net take-up and new supply steadily revert to pre-POGO levels,” said Office Services-Tenant Representation Director Kevin Jara.

“This momentum sets a positive tone as we look ahead to further stabilization and recovery in 2026,” Jara added.

Colliers recorded 369,600 sqm of new office supply in 2025, about 40 percent lower than its initial estimates. In 2026, the Bay Area, Makati Fringe and Quezon City are expected to account for 52 percent of new office completions.

In light of the improving market outlook, Colliers urged landlords and developers to start long-term planning of office projects in major CBDs such as Makati, Ortigas and Fort Bonifacio, as well as key provincial hubs including Cebu IT Park, Cebu Business Park, Davao, Cagayan de Oro and Dumaguete.

These markets, the report said, remain attractive to occupiers due to strong talent pools and improved infrastructure, but inventory is tightening and near-term supply is limited, which could restrict expansion options.

With vacancy easing and market fundamentals improving, Colliers said early planning will help developers align projects with future demand, secure land and approvals, and position assets to meet evolving occupier needs.