Metro Manila continues to dominate as a preferred location for corporate expansion, according to Santos Knight Frank’s (SKF) recent occupier sentiment survey, The Collab Special Report. The survey reveals that 64% of respondents are optimistic about increasing their office footprints over the next three to five years, with 33% choosing Metro Manila as their top growth destination.
Rick Santos, Chairman and CEO of Santos Knight Frank, attributed this trend to favorable investment policies. “The Philippine real estate sector is riding on a wave of opportunities driven by proactive measures from the current administration to open the country further to investments. These efforts are creating a more dynamic and business-friendly environment, paving the way for sustained development and progress,” Santos cited.
Prime real estate continues to soar
Despite limited supply, the commercial real estate sector remains robust. Prime residential properties in Metro Manila have witnessed a compound annual growth rate (CAGR) of 17%, up from 13% earlier this year. Additionally, Manila ranks as the third most affordable city in the Asia Pacific region for office occupancy costs, reinforcing its appeal to multinational corporations and business process outsourcing (BPO) companies.
The surge in demand for sustainable and green-certified buildings also marks a significant shift in tenant preferences. According to SKF’s findings, green-certified spaces have achieved an impressive 87.27% occupancy rate, reflecting tenants’ desire for cost-efficient and environmentally friendly options.
Infrastructure driving property value appreciation
The completion of the LRT Line 1 Cavite Extension is poised to enhance property values in the areas it serves. Improved connectivity is making these neighborhoods more attractive for both residential and commercial investments. Santos highlighted the ripple effects of infrastructure developments, stating the Marcos administration’s CREATE MORE Act promotes investment-friendly policies designed to stimulate business growth and demand for real estate. “With these reforms, Manila presents a prime opportunity for investors to capitalize on its expanding commercial and industrial sectors,” he added.
Hospitality and logistics sectors gain momentum
The Philippines’ hospitality sector is also gearing up for expansion, with 8,000 new hotel keys expected to launch by 2025 to accommodate the rising number of international tourists. The demand for MICE (Meetings, Incentives, Conferences, and Exhibitions) facilities has seen a 30% year-on-year increase, with venues like the SMX Convention Center and World Trade Center Manila at the forefront.
Meanwhile, Manila’s logistics market ranks third in year-on-year rental growth across Asia Pacific, driven by the rise of e-commerce, pharmaceuticals, and cold storage facilities. Santos Knight Frank’s report highlighted this trend, noting that conditions are transitioning from landlord-favorable to more neutral as the market matures.
Emerging cities offer alternative growth opportunities
While Metro Manila remains a primary hub, emerging cities like Cebu, Iloilo, Bacolod, and Metro Clark are gaining traction as viable alternatives for businesses seeking to diversify their locations. These cities offer promising opportunities while maintaining lower costs compared to the capital.
As the Philippine real estate sector evolves, it is clear that proactive government policies, infrastructure advancements, and shifting tenant priorities are paving the way for sustained growth across various segments. With a resilient market and strategic investments, the future looks bright for Manila and beyond.
