Metro Manila office completions pile up in Q4 2026 as Grade A vacancy nears 20%

Only 9% of third-quarter Grade A office supply in Metro Manila was delivered on schedule, pushing 231,600 sq.m. into the final quarter of 2026. Savills Philippines warns that vacancy could exceed 20% by yearend as negative net take-up and heavy completions pressure the market.

Metro Manila is facing a concentration of office building completions in the final quarter of 2026 after construction timelines for major developments shifted from the third quarter, according to property consultancy Savills Philippines.

Only 16,900 sq.m., or about 9 per cent of the 183,400 sq.m. of Grade A office space expected for delivery in the third quarter, was completed during the period. Three major developments — Yuchengco Centre, Offices at the Galleon, and SM North EDSA Tower 5 — were moved to the fourth quarter. Including Southfield Center and Spectrum, approximately 231,600 sq.m. of new office space is now scheduled for delivery in the fourth quarter, accounting for about 70 per cent of the 329,800 sq.m. in total office completions projected for 2026.

The anticipated increase in supply comes as Metro Manila’s Grade A office market recorded negative net take-up of 23,900 sq.m. in the third quarter, reversing six consecutive quarters of positive absorption. Gross leasing reached 118,200 sq.m., but this was outweighed by 142,100 sq.m. of space returned to the market as companies consolidated, relocated, or reduced their office footprints. The overall office vacancy rate rose to 19.2 per cent from 18.9 per cent in the preceding quarter.

Savills estimated that approximately 1.96 million sq.m. of Grade A office space stood vacant at the end of September, following a 40,700-sq.m. increase during the quarter. The 231,600 sq.m. scheduled for completion in the fourth quarter is equivalent to about 2.3 per cent of the market’s existing stock. The consultancy said the potential increase in vacancy would depend partly on current pre-leasing levels, with the largest increases expected in districts facing substantial new supply.

Makati CBD is among the markets expected to face additional vacancy pressure. Savills said the upcoming completion of Yuchengco Centre could push Makati CBD’s vacancy rate to around 23 per cent by yearend from 20.9 per cent in the third quarter. In Quezon City, vacancy climbed to 23.1 per cent from 19.8 per cent in the second quarter, and Savills projected it could rise to around 26 per cent by yearend as additional office space is completed. Ortigas Center recorded positive net take-up of 7,800 sq.m., and its vacancy rate improved to 18.6 per cent from 19.2 per cent. However, about 81,700 sq.m. of office space is scheduled for completion across the fourth quarter of 2026 and the first quarter of 2027, which Savills projected could push Ortigas Center’s vacancy rate back to around 22 per cent by early 2027. The Bay Area, which recorded positive net take-up of 11,600 sq.m., retained the highest vacancy among established business districts at 35.3 per cent; Savills expects it to rise to around 36 per cent by yearend.

Despite the increase in overall vacancy, average Metro Manila Grade A office rents rose by 0.5 per cent quarter on quarter to P861.10 per sq.m. per month, marking a third consecutive quarterly increase. Alabang CBD recorded the strongest quarterly rental growth at 2.8 per cent, followed by Ortigas Center and Quezon City at 1.5 per cent each. Bonifacio Global City was the only major district to record a rental decline, with average monthly rents easing by 0.4 per cent to P1,089.60 per sq.m.