Colliers: Office demand steadies amid selective recovery

From AB Capital's The Opening Bell: Three Moves

Event

Metro Manila office transactions reached 193,000 sqm in 1Q26, up 12% YoY, supported by traditional firms, outsourcing, and shared services. Vacancy remained broadly stable and rents were largely unchanged, despite lingering uncertainty from late-2025 disruptions.

View

In our view, the office market is showing measured resilience rather than broad acceleration. Controlled supply should help cushion vacancy, but demand remains selective. Colliers expects vacancy could still rise by 2-3pp if external headwinds persist through the year.

Catalyst

Key sensitivities include PEZA-accredited space availability, IT-BPM expansion, and new supply delivery. Available PEZA space in Makati, Fort Bonifacio, and Ortigas has fallen to 478,000 sqm, which may push occupiers to plan earlier or consider alternative locations.

Action

We think landlords with quality assets, flexible leasing packages, and refurbished space are better positioned. Favor developers and REITs with resilient office portfolios and strong tenant mix, while monitoring provincial markets where demand is more uneven and location-specific.

Disclaimer: The information, analyses, and views contained herein is based on sources which we, AB Capital Securities, believe are reliable, but is not guaranteed by us and is not to be considered all inclusive. It is not to be construed as an offer or solicitation of an offer to sell or buy the securities herein mentioned. AB Capital Securities and its Directors and Officers and/or members of their families may have a position in the securities herein mentioned and may make purchases and/or sales of the securities from time to time in the open-market and otherwise.