Philippines Real Estate Outlook: What it Means for BPOs, Captive Contact Centers and Shared Services

The Philippines remains a global hub for business process outsourcing (BPO), shared services, and global capability centers (GCCs). But as we get further into the first quarter of 2026, evolving office market dynamics, from leasing activity to property value trends, are influencing how global companies plan and execute their location strategies.

Whether entering the market, expanding an operation, or rightsizing a footprint, it’s essential to align real estate decisions with business and workforce realities on the ground.

1. Office Market Conditions by the Numbers

A snapshot of key office markets in the Philippines reveals how demand from BPO and shared service operators is shaping real estate conditions:

Source: Leechiu Property Consultants

This data illustrates the ongoing strength of BPO demand, especially in Cebu, BGC, and Quezon City, while highlighting the weaker performance in traditionally dominant markets like Makati.

2. BGC and Quezon City Lead Metro Manila Activity

Bonifacio Global City (BGC) and Quezon City accounted for over 100,000 square meters (sqm) of combined office leasing to IT-BPM firms in 2025. This reflects their strategic strengths:

• BGC appeals to U.S. and multinational firms due to its modern, Class A buildings and presence of global banks like JPMorgan and Citibank.
• Quezon City offers the deepest talent pool in Metro Manila and is highly accessible from multiple commuter corridors—ideal for high-volume contact center operations.

With vacancy rates tightening in BGC, the district is expected to transition to a landlord’s market this year, making early lease commitments critical for occupiers seeking prime space.

3. Provincial Growth Centers: Cebu’s Momentum

Cebu City emerged as the largest BPO leasing market in 2025, with 71,000 sqm of new office space leased—outpacing all metro Manila submarkets. It remains the top choice for back-office and shared service functions due to:

• Lower total cost of occupancy
• Strong university ecosystem
• Mature infrastructure for outsourcing operations

Other emerging locations, including Iloilo, Davao, and Pampanga, are gaining attention for their growing talent pipelines and government-supported economic zones.

4. Tenant Leverage Still Exists—But May Shift in 2026

While most office districts across the Philippines are still in a tenant’s market, that balance is beginning to shift. Several trends are emerging:

• Rents in BGC are expected to rise in 2026 as inventory tightens and landlord leverage increases
• Most other markets (Quezon City, Makati, Ortigas, Cebu) will continue to offer flexible terms and incentives through the next 12 months
• Average vacancy rates remain elevated, ranging from 10% to 20% depending on location, keeping base rents stable outside of BGC

Occupiers currently in negotiation or planning stages should act quickly to lock in favorable terms in prime areas before conditions begin to shift.

5. Industry Shifts: From BPO to Global Capability Centers

Looking ahead, the rise of GCCs is expected to influence site selection strategies. The Philippines’ industry association (IBPAP) is actively benchmarking India’s success in this area, with growing interest in hybrid centers that blend IT, finance, HR, and analytics.

With many US companies reportedly evaluating GCC expansion in India, the Philippines is positioning itself to capture a share of that demand. Real estate considerations for GCCs often include:

• Larger floorplates in Class A buildings
• Proximity to executive housing, schools, and airports
• Strong digital infrastructure and building resilience

This shift will likely push demand toward higher-spec buildings in BGC and Cebu, as well as Tier 2 markets with strong lifestyle appeal.

6. Strategy Implications for BPO and Captive Operators

Given these conditions, global occupiers should consider:

• Leasing early in tightening markets like BGC to secure cost and availability advantages
• Exploring Cebu and other regional hubs for high-quality talent at lower real estate costs
• Balancing flexibility and branding needs—especially for hybrid/shared-service teams
• Partnering locally to navigate building-level dynamics and regional incentives

Conclusion: Navigating Complexity with Confidence

The Philippine real estate market continues to support a robust BPO and shared services sector, but subtle shifts in demand, supply, and submarket conditions are creating a more complex environment for occupiers.

Site Selection Group, in partnership with Leechiu Property Consultants, our local partner for over 25 years, brings deep insight, project experience, and on-the-ground intelligence to help our clients optimize every step of their expansion or renewal strategies.

Whether you're evaluating Metro Manila, Cebu, or an emerging regional city, we help ensure that your real estate choices support long-term business goals, workforce strategy, and cost efficiency.