The real estate sector reported strong momentum in the first half this year, bucking global economic volatility with broad-based growth across office, industrial, residential, and hospitality segments, according to new data from global property consultancy Santos Knight Frank.
The office sector led the recovery, recording net absorption of 192,000 sqm, driven predominantly by business process outsourcing (BPO) firms expanding in Metro Manila. With 158,000 sqm of new stock added, total supply reached 8.8 million sqm, with over 403,000 sqm more expected by year-end.
“Despite geopolitical uncertainties, strong fundamentals and rising domestic demand continue to anchor the market,” said Rick Santos, chairman and CEO of Santos Knight Frank. “Metro Manila remains a top outsourcing destination, and we are seeing consistent demand from BPO and traditional occupiers.”
Grade A developments in Bonifacio Global City (BGC), Taguig and Makati are attracting sustained interest. Taguig now boasts the lowest vacancy rate at 15 percent and highest average rents at P1,248/sqm/month, while Makati follows at 17 percent vacancy and P1,220/sqm/month.
Industrial activity is gaining steam, with CALABARZON and Central Luzon emerging as top choices for foreign manufacturers and logistics firms. Average rents range from P230 to P290/sqm/month, appealing to players in pharmaceuticals, manufacturing, and cold storage.
In the residential segment, Manila ranked 9th globally in Knight Frank’s Prime Global Cities Index for Q1 2025, posting a 5.5 percent annual price increase, reaffirming its reputation as an affordable luxury market in Asia-Pacific.
Prime residential villages continue to appreciate, led by Forbes Park (up 15 percent to P825,000/sqm), followed by Dasmariñas, Magallanes, and Ayala Alabang (14 percent). Tight supply and exclusivity sustain price growth in this segment.
The hospitality market rebounded with 2.9 million tourist arrivals in H1 2025, supported by policies like tourism tax refunds and expanded visa-free access. This lifted 5-star hotel rates by 11 percent, led by demand in Taguig (P14,991/night) and Pasay-Bay Area (P13,601/night).
A wave of new hotel investments signals optimism: iconic brands Sofitel (Cebu) and InterContinental (New Clark City) are staging comebacks, while global players like Accor, Marriott, and Banyan Tree expand through local partnerships.
Metro Manila’s retail landscape gains further prestige with the arrival of Smith & Wollensky, the famed New York steakhouse, opening in BGC’s Finance Center. Its entry highlights increasing global confidence in the local retail and F&B market, as high-end brands eye the growing spending power of the Filipino consumer.
