Leechiu Property Consultants reports sustained growth in the Philippine office leasing market, driven by the information technology and business process management (IT-BPM) sectors, which are expected to significantly boost leasing activity in 2025. The firm anticipates a 16 percent increase in net take-up, estimating more or less 490,000 square meters of office space leased by the end of the year.
Mikko Barranda, director of commercial leasing at Leechiu Property Consultants, said that much of this growth is driven by established companies, particularly in sectors such as healthcare, back-office operations, and banking and finance. For example, global financial services firm J.P. Morgan has expanded its footprint in Bonifacio Global City (BGC), nearly doubling its office space from 70,000 square meters to 140,000 square meters in just a few years. This trend indicates a shift toward the continued expansion of in-house centers for U.S. companies operating locally.
The office market in the first quarter of 2025 posted a 7 percent growth in take-up, with 355,000 square meters leased, despite the absence of demand from Philippine offshore gaming operators (POGOs) and government-related transactions. The Ortigas/Mandaluyong/San Juan area emerged as the top performer, with 59,000 square meters leased, showcasing the growing appeal of emerging submarkets offering more competitive rental rates.
Meanwhile, BGC absorbed 51,000 square meters of space in Q1, representing 40 percent of its projected total demand of 126,000 square meters for 2024. Despite the absence of POGOs, which contributed to a decline in vacancy, the overall vacancy rate remains high at 17 percent, though it shows improvement from last quarter’s 18 percent.
Leechiu Property Consultants expects the vacancy rate to continue decreasing in the coming quarters, particularly in key business districts like Makati and BGC, as active leasing activity converts into signed deals. With a slowing pace of POGO exits, the office market is poised for further stabilization, reflecting broader trends in the commercial property sector.
