Wider recovery signals new phase for PHL office market — Colliers

AFTER YEARS of turbulence, the Philippine office market is finally gaining ground, The first half of 2025 shows clear signs of a sector that is not only recovering, but recalibrating, Metro Manila is holding steady, provincial locations are accelerating and demand drivers — traditional compa-

- By Kevin Jara and Kath Taburada

nies and the outsourcing sector — are proving resilient. With positive market indicators across the board, the market’s rebound is starting to look less of a short-term recovery and more like the start of the industry’s new growth phase.

METRO MANILA’S MOMENTUM IS REAL

Metro Manila recorded 446,100 square meters of transactions in the first half of 2025 — already surpassing half of 2024’s full-year total. This reflects a sustained recovery in office demand, especially among traditional and outsourcing firms. Notably, 70% of all transactions were driven by expansions and new setups, while the remainder involved relocations — often tied to flight-to-quality moves or space consolidation.

A closer look reveals that more than 80% of 3PO (third-party outsourcing) transactions were tied to business expansions, while over half of shared services firms were new entrants to the market. While large leasing transactions continue to make headlines, market activity in H1 2025 has been largely driven bysmall to mid-sized requirements, with 56% of recorded deals involving spaces below 1,000 square meters, and 36% between 1,000 to 2,000 square meters. Catering to small to mid-sized requirements entail flexibility from landlords. To better accommodate this demand, landlords are encouraged to remain flexible in their size offerings, especially in buildings with high vacancy.

VACATED SPACES ARE EASING — SLOWLY BUT SURELY