Metro Manila faces 231,600 square metres of Grade A office space scheduled for delivery in the final quarter of 2026 after construction slippages left third-quarter handovers at just 16,900 square metres. The delivery pileup threatens to tip metropolitan vacancy past 20 percent before January.
Property data from Savills Philippines shows the fourth-quarter concentration accounts for roughly 70 percent of the 329,800 square metres projected for completion across all of 2026. Developers completed only 9 percent of the 183,400 square metres originally slated for handover between July and September.
Delays Funnel Handouts into Year-End
Three developments slipped out of the third quarter: Yuchengco Centre, Offices at the Galleon, and SM North EDSA Tower 5. These join Southfield Center and Spectrum in a crowded fourth-quarter schedule that adds about 2.3 percent to the capital region’s total office stock in three months.
The supply arrives as tenant demand weakens. Metro Manila recorded negative net absorption of 23,900 square metres in the third quarter, down from positive take-up of 144,700 square metres in the second quarter. While gross leasing took up 118,200 square metres, tenants surrendered 142,100 square metres as business operators consolidated, relocated, or trimmed their operating floors.
Rents Resist Mounting Vacancy Across Key Hubs
Average Grade A monthly rents across Metro Manila still rose 0.5 percent quarter on quarter to 861.10 pesos per square metre, logging a third straight quarterly advance. Bonifacio Global City stood out as the sole major commercial district to discount space, with rents sliding 0.4 percent to 1,089.60 pesos per square metre.
Other districts pushed rates higher despite mounting vacancies. Alabang posted the steepest climb at 2.8 percent, while Ortigas Center and Quezon City recorded 1.5 percent increases. Total vacant space across the metropolis reached 1.96 million square metres at the close of September, lifting the overall vacancy rate to 19.2 percent from 18.9 percent in June.
Makati and Quezon City Face Supply Pressure
Makati central business district faces sharp vacancy increases once Yuchengco Centre opens its doors. Savills projects the district rate will jump to around 23 percent by December, up from 20.9 percent in the third quarter, after Makati shed 2,100 square metres of occupied space. Gross leasing in the district fell to 13,700 square metres from 24,800 square metres in the prior quarter, though monthly rents rose 0.8 percent to 999.50 pesos per square metre.
Quezon City registered the sharpest deterioration among all submarkets, with vacancy jumping to 23.1 percent from 19.8 percent in the previous three-month period. A major corporate departure triggered negative net take-up of 30,900 square metres, and completions before December could elevate district vacancy to 26 percent.
Bay Area Leads Vacancy as Ortigas Center Tightens
Ortigas Center proved an outlier by logging four straight quarters of declining vacancy, ending September at 18.6 percent with positive net absorption of 7,800 square metres. That reprieve will prove short-lived, with 81,700 square metres of new offices due by the end of the first quarter of 2027, an addition equal to 6 percent of the district’s footprint that could drive vacancy back to 22 percent.
The Bay Area remains the most oversupplied market in Metro Manila, sitting on an empty-space rate of 35.3 percent despite absorbing 11,600 square metres during the third quarter. Projections indicate Bay Area vacancies will reach 36 percent by year-end and hover near that band through 2027 as more buildings finish construction.
The contraction in third-quarter absorption broke a streak of six straight quarters of positive net absorption that had held firm since late 2024. Corporate real estate directors now face an aggressive tenant-favoured market as 231,600 square metres of new office space is scheduled for delivery in the fourth quarter.
