Years after the COVID-19 pandemic, we continue to see a mixed bag for the Philippine property. Some segments are definitely performing better than others.
The office segment was able to breach our initial estimate as outsourcing firms and traditional occupants took up massive space over the past 12 months. The Metro Manila condominium market surprised a lot of stakeholders, with net take-up rebounding significantly due to attractive promos offered by developers despite elevated bank mortgage rates. The retail sector has been the most resilient, backed by brisk take-up from foreign brands and mall developers’ aggressive refurbishment of retail spaces. International tourist arrivals remain subpar, with much of the recovery in hotel rates and occupancies due to strong local market. Meanwhile, we remain optimistic for the industrial sector with Philippine exporters projecting decent growth as more foreign investment pledges materialize in 2026.
We expect 2026 to present a mix of headwinds and tailwinds, a normal occurrence for a cyclical Philippine property market. Developers need to future-proof their businesses to remain relevant in a constantly evolving real estate market.
Office: A strong finish
Metro Manila’s office market closed 2025 on a stronger footing, with net take-up exceeding revised projections. The pick-up of demand, together with lower space surrender, helped ease year-end vacancy to 19.4%. Traditional firms and government agencies drove transaction activities while third-party outsourcers (3POs) and shared services remained stable demand drivers despite global and local headwinds.
Outside of Metro Manila, we project Cebu to continue dominating office transactions. We also expect Pampanga to pick up momentum in the months ahead.
Residential: Shorter inventory life points to improving condo appetite
The unsold condominium inventory in Metro Manila has substantially improved in Q4 2025 after reaching a record high of more than 13 years. We attribute the shorter remaining inventory life (RIL) to tempered condominium launches and to developers’ innovative ready-for-occupancy (RFO) promos extended to their clients. Colliers projects slower completion beyond 2026, partly due to tempered condominium launches in major Metro Manila CBDs for the past three to four years.
Significant take-up of pre-selling Metro Manila condominium units (RFO and under construction) in mid-2025 proved that developers’ promos were effective. For residential end-users looking at acquiring RFO units, now is a very good time, given the availability of nearly 30,000 units of unsold inventory strategically situated near major business hubs, supported by the attractive RFO terms being extended by developers.
Retail: From caution to consumption
Mall operators have been proactive in refreshing their retail spaces, and we believe that this should result in stronger take-up of physical mall space across the capital region. Colliers retains its forecast that Metro Manila retail vacancy will revert to pre-pandemic level by the end of 2026.
Ramping up omnichannel retail strategies is a must these days. Online and brick-and-mortar retail spaces should continue to complement each other, especially with the influx of foreign retail brands in the Philippines.
We are seeing a more pronounced shift to suburbia, and this is happening not just in the residential sector. With more developers complementing their masterplanned communities with retail centers, we are likely to see more national developers expanding retail footprint in high-growth areas outside Metro Manila.
Hotel: Treading growth amid subpar arrivals
The Philippines’ international arrivals remain disappointingly low compared to our ASEAN peers. The Tourism department is looking at other foreign markets (India, Canada, and France) to fill the void left by subpar arrivals from South Korea and China.
In 2026, we project Metro Manila to record its biggest hotel completion since 2018. From 2026 to 2029, we project foreign-branded hotels likely accounting for about half of new supply across the capital region.
Metro Manila occupancy rates are likely to hover above 60% in 2026 (vs. 72% in 2019), with local tourists partly offsetting lower foreign arrivals. Meanwhile, in-person events will continue driving the demand for meetings, incentives, conferences, and exhibition (MICE) facilities, and this should help lift hotel occupancies and average daily rates (ADRs).
Industrial: Dissecting PHL developers’ expanding industrial footprint
The industrial sector remains competitive, as shown by the aggressive expansion of industrial park developers. In our opinion, the implementation of the land lease extension will likely be crucial in attracting more foreign manufacturers into the country. Developers with expansive industrial footprints should also take advantage of the entry and expansion of manufacturing locators by enticing them to put up facilities within their industrial parks.
Colliers believes that raising the country’s industrial competitiveness is crucial in attracting millions or even billions in foreign direct investments. In our view, these big-ticket investments will have positive impacts on the industrial sector, and the benefits could even spill over to other property segments, including office, residential, and hospitality.
Overall, 2026 will continue to test property developers and their ability to adapt. Property firms and stakeholders should be quick in altering strategies based on existing challenges and immediately seize opportunities in a post-COVID world.
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