July 10, 2025
UNOCCUPIED office spaces in Metro Manila have risen fivefold compared to pre-pandemic days, the head of the Lobien Realty Group (LRG) said.
“[The] vacancy rate right now is 20 percent. Pre-pandemic, [it was] 4 percent, and at that time, we had POGOs (Philippine offshore gaming operators), [and there was no work from home yet] in the BPO (business process outsourcing) industry. That’s why demand [then] was high,” LRG CEO Sheila Lobien said on Tuesday.
LRG’s midyear property report explained that the high vacancy rate in the second quarter was due to new office supply, vacant office spaces left by POGOs and a contraction in lease rates to 14 percent from 42 percent in Q2 2024.
“Developers, however, are responding very well by openly negotiating lower rental rates with tenants and by controlling their new office supply, with fewer projects carefully completed,” LRG said.
Rental rates dropped to P950 per square meter (sqm) from P990 in the second quarter
Meanwhile, 500,000 sqm of office spaces were constructed annually from 2020 to 2024, a 40-percent reduction from the 1.8 million sqm in 2019.
The report’s upbeat forecast was that the outsourcing sector would drive office demand, particularly from IT-BPM (information technology and business process management) companies that account for 35 percent of total occupied offices and is expected to have 1.9 million employees.
“That’s good because, although there is [still] work from home, they will take up physical office space,” Lobien said.
LRG said that “as one of the country’s leading economic contributors, the BPO industry does not only generate significant employment opportunities but also stimulates the real estate sector through its substantial office space requirements.”
Co-working spaces or flexible offices also remain an alternative for companies not ready to invest in leasing traditional offices.
“It’s actually growing, many companies are centralizing their office operations instead of putting it in one big area,” Lobien said. “It’s easier to manage when it’s decentralized or [if] people can work near their houses. You can easily expand, contract, and you pay for flexibility.”
Over 200 co-working spaces have opened in Metro Manila.
Meanwhile, the vacancy rate of the office market in the provinces was at 30 percent in Q2 while the lease rate remained at 7 percent, LRG Chief Operating Officer Jericho Linao said.
The LRG report noted that “the high vacancy rate in NCR (National Capital Region) also gives incentives to locators to exhaust available spaces before moving to the provinces.”
The main driver of the growth of the office market in the countryside was said to be the government’s Build Better More projects, such as the Luzon Spine Expressway Network, the Cavite-Bataan Interlink Bridge and the New Cebu International Container Port.
Major real estate developers are also establishing townships outside the NCR to supplement office space demands, with concentration in Pampanga, Cavite, Laguna and Rizal
Read more: https://www.manilatimes.net/2025/07/10/business/top-business/office-market-vacancy-rate-hits-20/2146445
CLARK FREEPORT, Pampanga — Amid global and domestic uncertainties, the Philippine economy remains set for continued growth given favorable demographics such as its young, English-speaking population, the head of a real estate consultancy said.
Speaking at a Manila Times forum at the Clark Marriott Hotel, Lobien Realty Group CEO Sheila Lobien said that young entrepreneurs would help sustain economic growth.
“Although we see many women in real estate—mostly in sales, marketing, and consultancy—only a few reach the highest levels of management. While leadership traits like merit, performance, logic, and strategic thinking are common to both men and women, I believe women often bring a more inclusive and caring leadership style. Women leaders tend to be more attuned to their team’s well-being. During the pandemic, for instance, many women leaders didn’t hesitate to check in on their teams with personal messages—something that may feel awkward for some male counterparts.
There is a paradox in the National Capital Region’s condominium market at the moment.
While it is true that there is an oversupply of condominium inventory, we are not seeing developer-initiated significant price reductions to push these inventories out of the market.
THE business process outsourcing industry (BPO) will remain a key driver of Philippine economic growth despite US protectionism, the head of a real estate consultancy said, with projected workforce expansions expected to boost demand for office space.
Speaking at Manila Times economic forum on Thursday, Lobien Realty CEO Sheila Lobien projected that 160,000 new employees would join the BPO workforce this year, requiring companies to add an estimate 480,000 square meters of office space.
Lobien Realty Group is the No. 1 Realty Property Provider in the Philippines. We provide office and commercial spaces, lots and properties for sale/lease in the cities of Makati, Taguig, Pasig, Mandaluyong, San Juan, Pasay, Parañaque, Las Piñas, Quezon, and Caloocan.