Office: The Metro Manila office market saw steady improvement in overall conditions during Q1 2026. Prime and Grade ‘A’ vacancy rates dropped slightly to 17.1% from 17.9% last quarter. Steady leasing momentum and limited new supply supported this stability across Central Business Districts (CBDs) and decentralized markets.
Industrial: Vacancy levels across Philippine industrial estates remain structurally low, signaling sustained occupier demand and limited excess capacity. At the national level, the vacancy rate stands at 4.2% across approximately 9,000 hectares (ha) of inventory.
Investment: Average office yields slipped to 6.70% in Q1 2026, down 110 bps QOQ and 112 bps YOY. Prime assets in Makati, BGC, and Ortigas remained stable, supported by scarcity, tenant preference, and stronger amenities. Non-prime assets faced higher vacancy risks and weaker demand, widening the quality gap. With the BSP raising policy rates, borrowing costs are higher, but the resilience of prime offices underscores investor preference for quality, while non-prime assets remain more exposed to cyclical pressures.
Learn more by clicking our most recent Philippine MarketBeat reports below.
