THE Philippine office sector delivered a solid performance in 2025, posting a 19.4 percent vacancy rate and 309,000 square meters (sqm) of net take-up — overtaking the prior forecast of 285,000 sqm, according to real estate consultancy firm Colliers Philippines.
For 2026, Kevin Jara, Colliers director and head of office services-tenant representation, expressed optimism as the market “returns to a natural state, propped up by organic growth — without the previous disruptors in the industry like the POGOs.”
Despite major headwinds such as the 2024 US elections and the ban on Philippine offshore gaming operators (POGOs), the Colliers report noted that the office market had returned to pre-POGO market behavior during the years 2014 to 2016.
During the media briefing on Feb. 3, Jara compared the years between the entry of POGOs and their subsequent exit and noted that annual office demand has “normalized.” Average annual office demand stood at 807,000 sqm from 2015 to 2017, closely matching the 809,000 sqm recorded between 2023 and 2025. In contrast, average annual office demand surged to 1.5 million sqm during the peak POGO years of 2018 to 2019. “Simply put, there is still no industry that was as disruptive as the POGO,” Jara said.
While the 2025 vacancy rate remains elevated, it is “expected to drop to 18.9 percent in 2026, supported by improved transaction activity and fewer lease surrenders.” But to “move the needle,” Jara said higher amounts of net take-up of at least 600,000 sqm are needed. “Our forecast this year is 400,000 ... so it’s not quite there yet. But, we will be seeing marginal improvements in vacancy rates starting this year.”
Metro Manila recorded a post-pandemic high of 847,000 sqm in transactions in 2025, representing a 13 percent increase year on year (YoY). While the demand is driven by non-BPO with 65 percent demand share, the shared services and global in-house capability centers grew remarkably, showing a 67 percent growth YoY.
The growth of this sector in 2025 is “very interesting,” according to Jara. “It is expected to have a larger contribution to the office sector in the years to come,” he said, adding that this development aligns with the projection of IT & Business Process Association of the Philippines’ (Ibpap) growth forecast and roadmap for the industry.
IT-BPM drives demand
Most transactions in the sector were recorded in Fort Bonifacio, which dominated Metro Manila submarkets with a total volume of 232,000 sqm, almost doubling its 2024 performance.
Demand in Fort Bonifacio continues to be driven by the expansions and new setups of IT-BPM firms, said Jara. Companies such as Wells Fargo, Coca-Cola, and even non-BPO firms like GCash are “picking up space” in the area. Noteworthy as well is the entry into BGC of a new flexible and co-working operator headquartered in Singapore.
Jara added that investors and locators can expect several infrastructure upgrades, including the Metro Manila Subway stations at Kalayaan and BG, the BGC West Gate bus terminal hub, redevelopment projects, such as the Fort Strip and MC Home Depot, and updates to the BGC master development plan. High-quality buildings such as W 6th by the W Group, Bench Tower by Suyen Corporation, and Amani Tower by Amani Corporation are targeted for completion in 2027–2029.
“BGC is the preferred address of MNCs and outsourcing firms,” Jara stated, adding that “it will remain to be an important district in the years to come.”
Metro Manila office pipeline is forecasted to average 320,000 sqm annually from 2026 to 2030.
Cebu is the clear leader in the provincial market, with 121,000 sqm in transactions, which accounts for almost half of total provincial transactions for the year. Provincial office demand surged, with Cebu up by 70 percent YoY, with total provincial transactions hitting 243,000 sqm.
“If you stack up Cebu with other Metro Manila submarkets, it actually comes in second after Fort Bonifacio,” Jara said.
IT-BPM (3PO/Shared Services) continues to drive demand in the provincial markets, accounting for 69 percent share. This is in contrast to Metro Manila, where the demand is driven by non-BPO and traditional office space users.
Notable reductions in vacancies were recorded, especially in Cebu, Pampanga, and Davao, which Jara described as a “certified landlords’ market.” He also said opportunities for expansion for locators can now be found in Iloilo and Bacolod, where “all major developers have space.” Supply in Cebu will diversify geographically as new office space is expected to open outside the traditional CBDs in the province.
Jara pointed out that Cebu and Davao both suffered quarter-on-quarter (QoQ) drops to as much as 60 percent due to calamities in the area. “But, overall, provincial numbers are looking good and show a strong finish, beating 2024 numbers,” he observed.
Jara concluded by the end of the session: “We are excited about the growth of the shared services sector as the IT-BPM industry continues to re-skill and retool.”