OVERVIEW
The 3Q 2026 Metro Manila Office Briefing by Savills Philippines highlights a softening office market, with net take-up turning negative and vacancy edging higher despite continued rental growth. With a substantial volume of new supply expected in the final quarter of 2026, market conditions are likely to remain uneven, creating greater opportunities for tenants while testing landlords' ability to maintain occupancy and rental rates.
KEY FINDINGS
Metro Manila net take-up turned negative at -23,900 sq m in 3Q 2026, down from 144,700 sq m in 2Q.
Overall vacancy increased to 19.2%, from 18.9% in 2Q 2026.
Average rents rose 0.5% quarter-on-quarter to PHP 861.10/sq m/month, marking the third consecutive quarterly increase.
Approximately 231,600 sq m of new office supply is expected in 4Q 2026, bringing projected full-year completions to 329,800 sq m.
KEY INSIGHTS
Office demand weakened as space returns of 142,100 sq m outpaced gross leasing of 118,200 sq m, ending six consecutive quarters of positive net take-up.
PEZA-accredited and green-certified buildings continue to demonstrate stronger occupancy, reaching 82.3% compared with 70.6% for non-certified buildings.
Greater Ortigas and BGC remain among the tightest office markets, with vacancy rates of 10.3% and 7.7%, respectively, while the Bay Area maintains the highest vacancy at 35.3%.
Rental performance remains mixed across districts, with Alabang CBD recording the strongest quarterly increase at 2.8%, while BGC rents edged down 0.4%.
The significant volume of upcoming supply, combined with uneven leasing demand, could push Metro Manila's overall vacancy rate above 20% by year-end.
MARKET IMPLICATIONS
Vacancy could exceed 20% by year-end 2026 as new supply enters the market and tenant space returns continue to weigh on absorption.
Landlords of PEZA-accredited and green-certified buildings may retain a competitive advantage through stronger occupancy and tenant demand.
Tenants may gain greater negotiating leverage in high-vacancy districts such as the Bay Area, Alabang CBD, and Quezon City, where available space and upcoming completions could create more leasing options.
BGC and Greater Ortigas may sustain stronger rental performance due to limited near-term supply and relatively low vacancy, while other districts may face greater pressure to offer leasing incentives.
FAQ
What is the 3Q 2026 Metro Manila Office Briefing?
It is a quarterly Savills Philippines research report covering office supply, leasing activity, vacancy rates, rental trends, and market conditions across Metro Manila.
Who should read this report?
Office occupiers, investors, landlords, developers, brokers, and businesses evaluating office leasing opportunities or real estate investments in Metro Manila.
What are the main highlights of 3Q 2026?
Net take-up turned negative at -23,900 sq m, vacancy increased to 19.2%, and average rents rose 0.5% to PHP 861.10/sq m/month. Meanwhile, approximately 231,600 sq m of new office supply is expected in the final quarter of the year.
What is the outlook for the rest of 2026?
The market is expected to face a substantial wave of new supply in 4Q 2026, potentially pushing vacancy above 20% by year-end. While rental rates may continue to strengthen in supply-constrained districts, increased vacancy and uneven leasing demand could intensify competition among landlords and improve negotiating conditions for tenants.
