BusinessOffice Rental Prices Going Even Lower

Thanks to its thriving economy, skilled workforce, and favorable investment climate, the Philippines has long been a strategic location for foreign and local businesses. As 2024 draws to a close, it is becoming increasingly evident that there has never been a better time to register a business in the Philippines, particularly for entrepreneurs seeking affordable office space in Metro Manila. Office space prices in the capital have been declining month after month, creating a unique opportunity for businesses to secure prime locations at competitive rates.

Before the pandemic, office space rentals in Metro Manila were relatively high, with prices per square meter reaching substantial figures. In 2019, office rents in the central business districts like Makati, Bonifacio Global City (BGC), and Ortigas Center ranged from PHP 900 to PHP 1,500 per square meter, depending on the area and type of office space. As Metro Manila became an attractive destination for global businesses, these prices reflected the demand for commercial real estate. However, the outbreak of the COVID-19 pandemic in early 2020 drastically altered this landscape.

Impact of the Pandemic on Office Space Demand

The COVID-19 pandemic and subsequent lockdowns forced businesses worldwide to rethink their operations. In the Philippines, companies were required to adapt to remote working setups as the government imposed strict quarantine measures to control the spread of the virus. With the majority of employees working from home, businesses no longer needed large office spaces, leading to a significant reduction in demand for commercial real estate.

As businesses struggled to stay afloat during the pandemic, many were forced to close, while others opted for more flexible arrangements, such as remote or hybrid working models. This shift to remote work and a decrease in businesses operating in physical office spaces led to an oversupply of office properties in Metro Manila. As a result, office vacancy rates skyrocketed, and rental prices began to fall.

Office Space Availability and Price Trends in 2024

According to reports from August 2024, the office space market in Metro Manila showed signs of recovery, but the availability of office spaces remained high. Data from real estate firms revealed that vacancy rates in Metro Manila had increased significantly in the previous years. In August 2024, vacancy rates in key districts like Makati, BGC, and Ortigas reached levels as high as 15% to 20%, with some areas seeing even higher vacancies due to the ongoing trend of remote work and the reduced demand for office space. As a result, office space rental prices in Metro Manila had fallen considerably, with average rates hovering between PHP 700 and PHP 1,200 per square meter—representing a significant reduction from pre-pandemic levels.

Despite this decline, some areas like BGC remained steady due to multinational companies’ presence and the demand for Grade A office spaces. However, many businesses looking for affordable options could still find ample choices in other business districts, such as Quezon City, Makati, and Mandaluyong, where office rental prices were more competitive.

By December 2024, this trend continued as the office space market saw further price reductions. Data from the real estate firm JLL showed that Metro Manila office rents were expected to decline even further in 2025 due to increased vacancy levels and lower demand from businesses seeking large office spaces. The price range in December 2024 was reported to be even lower than in August, with rates now starting at PHP 600 per square meter in some parts of Metro Manila, particularly in areas where businesses opt for smaller, more flexible office spaces.

In the same report, JLL also noted that the overall supply of office space in Metro Manila remained robust, with several new office developments completed throughout the year. However, despite the increase in supply, the high vacancy rates and decreasing demand for traditional office spaces meant that rental prices continued to decline.

Why Businesses Should Take Advantage of the Declining Office Space Prices

The steady decline in office rental prices in Metro Manila presents an excellent opportunity for businesses, especially those looking to expand or establish a presence in the Philippines. With rental rates falling to more affordable levels, companies can secure office spaces in prime locations without the burden of exorbitant rental costs. Additionally, office space availability in various districts across Metro Manila allows businesses to choose from a broader range of options that best suit their operational needs.

Furthermore, flexible office spaces are becoming increasingly popular for businesses seeking to cater to a hybrid workforce. These spaces provide companies with the opportunity to scale their office requirements up or down as needed without the long-term commitments and higher costs traditionally associated with leasing office space. As more companies adopt hybrid or remote working models, demand for these flexible office spaces is expected to grow, making it a wise decision for businesses to take advantage of the current market conditions.

Is Assistance Available?

For foreign and local entrepreneurs interested in establishing a business in the Philippines, the question arises: is assistance available to navigate the complexities of registering a company and finding the right office space?

The answer is yes. We are here to help. Our team of experts is well-versed in assisting businesses with registration procedures in the Philippines, but we also offer specialized services to help you find the perfect office space. Whether you’re looking for a prime location in the heart of Metro Manila or a more affordable option in the city’s outskirts, our consultants can help you identify suitable office spaces that meet your business needs and budget.

Furthermore, we understand the importance of office fit-outs, and we can guide you through fitting out your office space to ensure it is functional, compliant with local regulations, and tailored to your brand’s identity. By working with us, you can streamline finding, leasing, and setting up your office space, saving you time and effort while ensuring a smooth transition into the Philippine market.

Contact us today to schedule an initial consultation with one of our experts. Let us help you take advantage of the office space market and successfully launch your business in the Philippines.

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