The Market Monitor Minding the Nation's Business
- Office net absorption is at 192k sq.m. this H1 2025
- Manila’s residential retains position in Top 10 of Knight Frank’s Prime Global Cities Index
- Manufacturing, logistics, and cold storage continue to fuel industrial growth in CALABARZON and Central Luzon
- Iconic hotels are making a comeback in new strategic locations
The Philippine real estate sector continues to demonstrate steady growth in the first half of 2025, defying global volatility. According to global real estate services company, Santos Knight Frank, the office sector is taking the lead with occupancy levels rising as more BPO firms choose to expand within Metro Manila, reaffirming its position as a top outsourcing destination.
Rick Santos, Chairman & CEO of Santos Knight Frank says: “The current geopolitical climate is marked by rapid and unpredictable changes, creating uncertainty for investors, businesses, and consumers alike. Despite this, the Philippine real estate sector continues to demonstrate remarkable resilience, anchored by strong market fundamentals, proactive government policies and growing domestic demand.”
“We continue to see steady demand in the office market from BPO and traditional occupiers. The industrial sector is expanding steadily, driven by growth in manufacturing, logistics, and storage. In residential, Manila continues to position itself as an affordable luxury market, while the hospitality sector is regaining strength with an expanding hotel pipeline across key destinations.”
He continues: “As economic tides shift, real estate reaffirms its place as the gold standard of investment – offering long-term value, enduring stability, and tangible growth opportunities.”
H1 Office Net Absorption records at 192k sq.m.
Net absorption this first half of 2025 records at 192,000 sq.m., largely driven by move-ins and expansions from the BPO industry. Metro Manila office market’s supply totals to 8.8 million with the introduction of 158,000 sq.m. new office stock.
More than 403,000 sq.m. office stock is expected to be completed in the latter part of the year, with an additional of more than half a million square meters over the next five years.
More BPO companies continue to choose Metro Manila as their preferred office destination with the launch of more Grade A and Prime buildings especially in BGC, Taguig and Makati. Taguig now commands the lowest vacancy rate of 15% and the highest average asking rate at PHP 1,248/sqm/mo., 21% higher than the overall average of PHP 1,024/sqm/month. Makati follows at 17% vacancy and PHP 1,220/sqm/month asking rate.
Manila an affordable luxury residential market
Manila continues to retain its position in the super prime market, placing 9th in Knight Frank’s Prime Global Cities Index in Q1 2025, with a 5.5% y-o-y increase in prices. On a global landscape, this puts Manila in an affordable luxury market, providing more value for its consumers comparing to other APAC markets.
Meanwhile, prime villages in Metro Manila continue to demonstrate steady growth in the first half 2025, sustaining their upward trajectory. Forbes Parks leads with a 15% increase, now at PHP825,000 per sqm, closely followed by Dasmarinas, Magallanes and Ayala Alabang at 14%. Urdaneta and San Lorenzo are at 12%, while Bel-Air closes the list at 11%. Limited availability and exclusivity continue to drive the demand in these exclusive subdivisions.
CALABARZON and Central Luzon are Industrial Hotspots for foreign enterprises
CALABARZON and Central Luzon solidify their status as key industrial hotspots, attracting strong interest from foreign enterprises seeking operational efficiency and access to critical infrastructure.
Average rents in these areas range from PHP230 to PHP290/sqm/month – offering competitive rates for companies in manufacturing, pharmaceuticals, and cold storage – sectors that are driving sustained demand for industrial space.