Over 380,000 sqm of Metro Manila office space vacated in H1

Some 383,000 square meters of office space in Metro Manila were vacated in the first half of the year as occupants sought for newer areas and better rates, according to a recent report by commercial real estate and investment management firm Jones Lang LaSalle.

Out of the total space released in the first six months, the business process outsourcing (BPO) sector accounted for 61%, followed by internet gaming licensees with 24%, and corporate occupiers with 15%.

“Majority of that is coming from the BPOs. They’re the ones who are contracting their spaces. A lot of them are moving out and transferring to new locations with better quality buildings given that there is more competitive pricing now,” JLL head of research Jan-Loven De Los Reyes said in a briefing in Makati City.

There were 189,000 square meters of space vacated in the first quarter, and another 189,000 square meters (sqm) in the second quarter. Net absorption for the first half stood at 160,000 square meters.

“As you can see, it’s still a tenant’s favorable market compared to, let’s say, previous years where you had a landlord favorable market because you have a lot of options given the supply in the market,” De Los Reyes said.

“You have elevated vacancies so there’s a lot of options for different tenants that they can take a look at and see new office spaces,” he added, noting that a major corporate occupier pulled out of Taguig City and moved to the Makati City central business district (CBD) with more favorable rates.

The average rent in Bonifacio Global City was the highest at P1,246 per sqm; backed by the Makati City CBD at P1,219 per sqm; Makati City at P1,169 per sqm; Taguig City at P1,167 per sqm; Pasay City at P901 per sqm; and Parañaque at P888 per sqm.

Rent in Mandaluyong City averaged P832 per sqm; Quezon City at P801 per sqm; Muntinlupa City at P785 per sqm; Ortigas CBD at P777 per sqm; Pasig City at P751 per sqm; and Manila City at P709 per sqm.

“In terms of rentals, particularly Makati CBD or Makati City in general, there are some buildings there that are still holding their rentals, even older buildings, at P1,000 per square meter per month. They’re quite expensive compared to newer buildings given that there’s a big difference in terms of quality,” De Los Reyes said.

“These new buildings are relatively, I would say, affordable in terms of pricing so if you were a tenant, you’re in an older building, you see that there’s an upcoming building or there is an existing space in Makati CBD, you will definitely take a look or consider that on as an option for you,” he added.

In terms of vacancy, the overall rate in Metro Manila stood at 18.2% in the second quarter of 2025, equivalent to an annual decline of 111.7 basis points.

The biggest vacancy rate was recorded in Parañaque with 49.6%, followed by Manila City with 36.3%, Pasay City with 25.5%, Muntinlupa City with 21.6%, Quezon City with 19.1%, Makati City with 17.3%, Ortigas central business district with 17.1%, Pasig City with 16.8%, and Mandaluyong City with 15.5%.

Taguig City recorded a vacancy rate of 12.4%, the Makati City CBD with 11.7%, and Bonifacio Global City with 9.6%. —AOL, GMA Integrated News