Office: Prime and Grade A vacancy edged up to 17.6% in Q2 2026, from 17.1% in Q1 2026, as limited new supply and persistent economic uncertainty tempered leasing activity across CBD submarkets. Occupiers increasingly favored fringe CBD locations, where large, contiguous floor plates better accommodate long-term space strategies amid ongoing headwinds. This flight to value supported modest rental growth, with average headline rents rising 52 basis points quarter-on-quarter to PHP 964 per square meter per month.
Industrial: The logistics and industrial sector posted strong fundamentals in Q2 2026, with national vacancy tightening to 2.48% across approximately 9,400 hectares of estate inventory, down from 4.2% in Q1 2026. This signals sustained occupier demand and limited excess capacity across key corridors. The logistics pipeline stands at 13% of existing inventory, while build-to-suit commitments for high-specification buildings account for 10%, reflecting a disciplined and measured approach to supply-side development.
Investment: Average gross rental yields edged up to 6.7%, rising three basis points YoY and one basis point QoQ. Despite GDP growth moderating to 2.3% in Q2 2026, C&W Research maintains a cautiously optimistic outlook. A weaker peso has drawn dollar-based investors toward operating platforms and income-generating assets, while the 99-year foreign land lease framework and the World Bank's upper-middle-income classification reinforce long-term capital formation in the logistics and industrial segments. Occupiers, meanwhile, are adopting a more measured approach to expansion, carefully timing relocations, optimizing fit-outs, and renegotiating leases.
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