The way we work has changed dramatically over the past decade, driven by technological advancements, shifting workforce dynamics, and evolving business needs. Physical office spaces have adapted as well, with occupiers and enterprises increasingly seeking agile, flexible environments. This shift has fueled a surge in demand for flexible workspaces, transforming them from a niche concept into a mainstream office solution.
In our recently released white paper titled The Future is Flex: Insights from the Philippine Flexible Workspace Industry, we highlighted how the industry has transformed from its introduction in 1996 to its new phase of growth post-pandemic, showing that flexible workspaces are no longer just an alternative to traditional leases—they are now central to workplace strategies of businesses navigating an increasingly dynamic market.
The rise of flexible workspaces
The growth of flexible workspace industry is closely tied to the country’s transformation into a global outsourcing powerhouse and the rise of digital workers and entrepreneurs. Multinational business process outsourcing (BPO) firms were drawn to the country for its highly educated, English-speaking workforce and its advantageous time zone alignment with Western markets.
Alongside the BPO sector’s maturity, a new wave of digital workers and entrepreneurs also emerged. The proliferation of online platforms and remote work technologies gave rise to freelancers, virtual assistants, and digital entrepreneurs who seek professional, plug-and-play spaces.
Developers and flex providers recognized this growing need and responded with coworking spaces and serviced offices offering short-term leases, ready-to-use setups, and collaborative environments. These spaces evolved beyond workstations into hubs for innovation, networking, and community.
Through market highs and lows
Fueled by the continued expansion of the BPO sector and the rapid growth of POGOs, the period between 2012 and 2018 marked a golden era for the Philippine office market. Year-on-year vacancies in the capital consistently hovered below 5%, signaling a landlord’s market where office supply struggled to keep up with demand. These favorable conditions create a conducive environment not only for office developers but also for flexible workspace operators.
Existing flex providers capitalized on the momentum by aggressively expanding their footprint, while new coworking brands entered the market, bringing their global and regional expertise to the country. 2012 also marked the geographical diversification in the flexible workspace footprint. Once concentrated in Bonifacio Global City (BGC) and Makati CBD, operators also began to expand into Ortigas Center and Quezon City, responding to growing demand based outside of the traditional business districts. From just 10,000 sqm of flexible workspace in 2011, the industry saw explosive growth, with an annual growth rate of 30% and reaching 236,000 sqm by the end of 2019.
The COVID-19 pandemic brought unprecedented disruption to the Philippine office market, reversing nearly a decade of sustained growth. As lockdowns and mobility restrictions took effect in early 2020, the market shifted dramatically. Within a year, overall market vacancy reached 9.1% and by 2021, it had surged to 15.7%, the steepest rise in vacancy since the Global Financial Crisis in 2008. The flex workspace sector mirrored this downturn. By the end of 2020, the sector recorded a 41% vacancy rate—its highest ever—as companies downsized, shifted to remote work, or closed operations altogether. This led to a contraction of 53,000 sqm of flexible workspace stock, reducing total inventory to 194,000 sqm by the end of 2021.
Two years later, signs of recovery began to surface as the flex industry experienced a strong rebound. From a high of 41% vacancy, the sector saw a sharp drop to 18% by Q3 2022, indicating a resurgence in demand. Operators also responded swiftly: by the end of 2022, approximately 35,000 sqm of new leases were added to the flex stock. As of 9M 2025, the industry’s vacancy stands at 21%, with its total inventory in Metro Manila reaching 267,000 sqm, surpassing pre-pandemic levels and further solidifying the sector’s role in the new hybrid work landscape.
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