OFFICE VACANCY levels in Metro Manila may rise with the completion of new projects from this year through 2030, according to property services firm JLL Philippines.

“For upcoming (office) stock, we have a total of 1.8 million square meters (sq.m.) of new stock coming in between 2025 and 2030,” JLL Philippines Head of Research and Strategic Consulting Janlo C. De Los Reyes said during a media briefing on Wednesday.

“The majority of that new stock will come in the second half of 2025, at 568,000 sq.m., before dropping to around 300,000 sq.m. and 200,000 sq.m. levels between 2026 and 2030. What we’re expecting is for vacancy levels to increase, while rentals remain soft in the medium to long term,” he added.

Mr. De Los Reyes said Metro Manila’s office vacancy is expected to reach 18% by yearend, with the current total office supply now at 11.1 million sq.m.

He added that office vacancy for the second quarter slightly declined to 18.2% from 18.4% in the previous quarter.

“What we expect for the remainder of the year is for overall vacancy to remain elevated at around 18%, still within that range, due to the large volume of new stock coming in,” he said.

“Bonifacio Global City and the Makati central business district (CBD) still recorded the lowest vacancies during the quarter, again due to solid demand and interest from both business process outsourcing (BPO) companies and corporate occupiers,” he added.

In terms of new supply, Mr. De Los Reyes said Makati City leads all business districts in Metro Manila, with 557,000 sq.m. of upcoming office space, largely driven by demand from banks.

“This includes around 368,000 sq.m. from these banks alone, and they are expected to complete [their buildings] between 2029 and 2030,” he said.

“Most banks are in the Makati CBD. They’re either redeveloping or constructing their buildings there,” he added.

Meanwhile, Mr. De Los Reyes said gross office leasing volume in Metro Manila rose by 80.2% to 582,000 sq.m. in the first half, from 323,000 sq.m. in the same period last year.

He projected gross office leasing volume to reach 800,000 to 900,000 sq.m. by yearend.

“In the first quarter of the year, we saw significant take-up from both BPO occupiers and corporate occupiers. Meanwhile, in the second quarter, we saw corporate demand weaken slightly, and that’s when the BPO sector carried its momentum throughout the period,” he said.

“What we expect for leasing volumes in the next couple of quarters is for them to remain stable,” he added.

RESIDENTIAL VACANCYThe capital region’s residential vacancy rate is expected to decline next year as developers scale back on launches, according to real estate consultancy firm Colliers Philippines.

“By 2026, we will see residential vacancy in Metro Manila’s secondary market finally declining. From 25.8% [by end-2025], we are likely to see this fall to 25.3%,” Colliers Philippines Director and Head of Research Joey Roi H. Bondoc said at a briefing on Wednesday.

“You have your supply and demand factors, but it’s mainly because of limited supply — fewer completions in the Metro Manila condominium market are contributing significantly to this drop in vacancy,” he said.

In its Second Quarter Property Market Report, Colliers noted that about 30,500 ready-for-occupancy (RFO) condominium units remained unsold as of end-June. Of this total, 32% came from the lower middle-income segment.

Metro Manila is facing an ongoing oversupply in the middle-income condominium market, primarily driven by the government’s ban on Philippine offshore gaming operators last year.

According to Colliers, Metro Manila’s pre-selling condo launches declined by 57% to 11,000 units in 2024, from 26,000 in 2023.

Likewise, pre-selling launches between 2022 and 2024 dropped by 58% compared to the 2017-2019 period, Colliers data showed.

As of the second quarter, Metro Manila’s residential vacancy slightly rose to 24.5% from 24.3% in the previous quarter, Colliers said.

“One out of four condo units being leased or resold right now remains vacant — no taker, no buyer, no individual willing to lease those condominium units,” Mr. Bondoc said.

Colliers also noted an 84% plunge in Metro Manila condo completions, averaging 5,800 units from 2025 to 2027, down from 13,000 units between 2017 and 2019.

Despite this, Colliers reported a 25% drop in backouts to 3,600 units in the second quarter from 4,800 units, indicating the effectiveness of developers’ flexible payment terms.

“I think the promos introduced in the last quarter worked because we haven’t seen promos this aggressive before. Previously, discounts were around 10%, but now they go up to 45% or 50%,” Colliers Philippines Managing Director Richard Raymundo said at the briefing.

These buyer-friendly promos include discounts on select RFO projects, rent-to-own units, and minimal or no down payments for move-ins, Colliers said. — Revin Mikhael D. Ochave and Beatriz Marie D. Cruz