Demand in the Metro Manila office market remained steady in the first quarter of the year, with transactions registering at 193,000 square meters (sqm) as the market is yet to see the effects of the ongoing oil crisis, according to Colliers Philippines.
In its first quarter property briefing, Colliers Philippines Director and Head for Office Services Kevin Jara said the first quarter transaction volume is 13 percent lower than the 222,000 sqm transaction volume in the first quarter of 2025.
However, he noted that the first quarter figure is 12 percent higher than the 173,000 sqm recorded in the fourth quarter of 2025.
“Actually, what we were expecting this quarter were any detrimental effects because of the corruption scandal and flood control issue, which started in Q3 last year. But in fact, we actually did better in Q1 2026, versus Q4 2025,” Jara said.
Jara emphasized that the market is yet to see the impact of the ongoing oil crisis, adding that this is still being monitored and will likely be covered in the next quarterly report.
Colliers said that office demand in the first quarter was driven by expansions and new setups. It added that traditional firms accounted for the bulk of the office space transactions during the quarter, or for 113,000 sqm of office space. This was followed by the business process outsourcing (BPO) sector with 41,000 sqm worth of transactions.
Meanwhile, vacated office spaces during the period registered at 119,000 sqm, a 41 percent decline from the previous year. As a result, net office take-up in the first quarter registered at 73,000 sqm, slightly lower than the 78,000 sqm net take-up in the same period a year ago.
“Vacancy is holding steady at 19 percent. It might still creep up a bit, depending on the net take-up that’s going to happen this year,” Jara said.
He emphasized that vacancy levels remain stable and developers have been really controlling the releases of new supply.
“We’re still keeping our forecast net take-up for the year at 400,000 square meters, pending what the resulting effects would be of this crisis. But 400,000 is an optimistic outlook, actually. And if we achieve that, we will still end up at 19 percent,” Jara said.
Moreover, in terms of office supply, the Metro Manila office market currently has a stock of about 15 million sqm.
“We’re expecting to end 2026, with an additional 500,000 square meters. But then, right after that sudden drop of 200,000 square meters [2027]. So we see a very controlled release of inventory starting in 2027, and the years after that would be 200,000 sqm to 300,000 sqm per year,” Jara said.
He added that based on a survey conducted by Colliers, only nine percent of the projects in the pipeline from 2026 to 2030 have not yet broken ground.
“So everyone is committed to fulfilling their projects,” Jara said.
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