MANILA, Philippines — Leechiu Property Consultants (LPC) shared its mid-year outlook in a recent 1H 2025 briefing, signaling a mixed recovery across key real estate sectors.
Office Market Sees Strong Rebound, Led by IT-BPM
Mikko Barranda, LPC Director for Corporate Leasing, reported a notable recovery in the office market. Office demand in the first half of 2025 already reached 67% of total demand logged for all of 2024, pointing to a possible full-year rebound.
Tenant exits—an indicator of downsizing and closures—declined for the second consecutive quarter, suggesting growing stability. The IT-BPM (Information Technology and Business Process Management) sector continues to be the top source of office space take-up nationwide.
“The market is recalibrating, but clearly, IT-BPM remains the backbone of demand,” Barranda noted.
Residential Sector Faces Oversupply, Flat Demand
In contrast, Roy Golez, LPC Director for Research and Consultancy, highlighted sluggish performance in the residential sector.
Only 6,643 units were sold in Q2 2025, up a modest 2% quarter-on-quarter. Developers now face over 52,800 unsold units across 638 projects, equivalent to 37 months of inventory.
While ready-for-occupancy (RFO) units performed better—95% sold, versus 62% for pre-selling units—overall momentum remains weak. The upscale segment (₱7M–₱12M) posted the strongest absorption.
Rental rates continue to slide, while vacancy rates vary: Bonifacio Global City (BGC) held steady at 10%, but Ortigas, Quezon City, Alabang, and Manila Bay reported higher vacancies of 18% to 25%. Bacolod and Cavite posted the highest vacancy levels in the country at 25% to 36%, a signal of mounting provincial oversupply.
Luxury Village Prices Hit New Highs—But Growth is Uneven
LPC also shared updates on land values across Metro Manila’s top gated communities and emerging suburban areas.
Forbes Park and Dasmariñas Village in Makati posted record-breaking highs at ₱649,000 to ₱704,000 per sqm, reaffirming Makati’s position as the country’s most expensive residential enclave. In contrast, Ayala Alabang and other southern villages remained 18% to 63% cheaper.
Price growth was also uneven: Ayala Alabang saw just +0.4% appreciation, while Greenmeadows in Quezon City jumped to ₱288,000 per sqm, fueled by renewed demand. Meanwhile, Southlinks, a newer village in the south, climbed to ₱157,000 per sqm, closing the gap with Metro Manila’s core neighborhoods.
Bottom Line:
While the office sector shows signs of a strong comeback, the residential market continues to grapple with oversupply, uneven demand, and declining rents—especially outside Metro Manila. Still, the luxury segment remains resilient, with Makati continuing to set new benchmarks in land values.
