Resilient office demand delivers positive net absorption, driven by corporate activity in Taguig and Makati

• Office net absorption reached 40,400 sqm, driven by corporate activity in Taguig City. Notable deals include a logistics firm (3,250 sqm) and a construction firm (2,180 sqm).
• Similarly, Makati City saw strong activity with a media firm taking 1,660 sqm and consumer goods and manufacturing sectors securing 2,500 sqm.

Vacancy rate decreased in Q2 2026 with sustained leasing momentum and no additional supply

• No new supply entered the market the quarter, with Q2 2026 projects delayed to Q3 2026. About 202,200 sqm of office space remains in the pipeline for delivery by year-end 2026.
• Q2 2026 saw vacancy rate decline to 13.8%, down 80.9 basis points from the prior quarter, behind sustained leasing demand.

Modest rent and capital value appreciation recorded during Q2 2026

• Monthly average rents grew to PHP 1,108.1 per sqm in Q2 2026, reflecting a 1.8% quarterly increase driven by rental escalations as occupancy levels improved.
• Capital values increased 0.3% during Q2 2026, reaching PHP 190,594 per sqm, driven by sustained investor confidence.

Outlook: Sustained momentum supporting moderate 2026 growth

• Sustained demand from IT-BPM, technology, financial services sectors, flex spaces, and construction firms pursuing flight-to-quality space is anticipated to support absorption of considerable new supply scheduled for year-end delivery.
• Rental rates face potential upward pressure driven by well-occupied existing inventory and premium upcoming new supply pricing. Capital values remain under modest pressure as elevated interest rates sustain investor caution.