Prime Philippines reports office demand softened slightly in the third quarter, with total space rented edging down to 53,200 square meters from 53,300 square meters in the previous three months. While overall demand has remained stable so far this year, the tenant base is growing more focused, with professional services, medical providers and business process outsourcing firms taking a larger share even as government agencies and retailers reduced their space needs.
Average Metro Manila rental rates fell to P895 per square meter, the lowest level in roughly a decade, even as occupancy improved to 85 percent from 84 percent in the first quarter and 83 percent in the second. That rate remains well above the pandemic-era low of 76 percent recorded in 2021. Performance varied sharply across key districts: Bonifacio Global City led with average rates rising to P1,157 per square meter from P1,110 a year earlier, while Makati dipped to P1,008 from P1,150. Manila Bay area rates climbed 4 percent to P710 per square meter, though no new supply is expected there until roughly 70,000 square meters come online in 2028, and Ortigas Center rates slipped 3 percent to P735.
Four PEZA accreditations have been approved to support new and expanding BPO operations following the lifting of the Metro Manila ecozone ban, covering Arca South 1 in BGC, Yuchengco Centre and Altaire in Makati, Parqal in Manila Bay Area, and One Trium Tower in Alabang. Prime noted these accreditations should help boost space uptake, though landlords are not using them to set higher rents, with pricing determined mainly by location, development costs and market competition.
Separately, industrial property rates across Luzon rose to P260 per square meter from P240 in the first half of the year, supported in part by developers repurposing space for recreational uses such as pickleball and tennis courts, which typically need at least 2,500 square meters plus supporting areas. New warehouse completions are projected to drop to 118,000 square meters next year from 420,000 square meters this year, with 228,000 square meters set to enter the market by 2028, more than half located within industrial parks to better meet demand for higher-standard facilities.
