As global firms like Amazon and Google mandate return-to-office policies, Manila's commercial real estate is evolving. In 2025, Metro Manila's office vacancy rates show mixed signals, influenced by BPO expansions offsetting POGO-related vacancies. Meanwhile, ongoing POGO regulations are normalizing the sector, affecting rents and sales in key office and residential hubs like Pasay and Parañaque.

Office Vacancy Rates Amid Return-to-Office Shifts

Metro Manila's office vacancy rate stands at around 18% in mid-2025, down from 21% the previous year, driven by BPO-led recovery. With companies enforcing hybrid or full office returns, leasing demand surged 80% in H1 2025, reaching 582,000 sqm. Analysts project further declines to below 10% by 2028, as no new supply in Q1 2025 tightened the market. However, some areas face oversupply risks, with rents dropping 3.2% amid competitive pressures. Prime CBDs like Makati are shifting to landlord-favorable conditions.

POGO Regulations and Real Estate Repercussions

The POGO ban, effective January 2025, has vacated spaces, boosting overall vacancies initially but opening doors for BPO repurposing. Office leasing grew despite the ban, with demand at 67% of 2024 levels by H1. Rents in POGO-heavy areas normalized from P1,500/sqm peaks, declining 2.9% y-o-y in CBDs. Residential markets saw 1,000 vacant units, with rents dipping 0.4% in Q1, impacting sales in concentrated zones. Normalization fosters resilience, with developers eyeing adaptive reuse for growth.

Outlook for Investors

In 2025, return-to-office trends could further lower vacancies, while POGO cleanup stabilizes rents, benefiting diversified investors. Monitor BPO expansions for opportunities in Manila's evolving market.