By Beatriz Marie D. Cruz, Reporter

LISTED PROPERTY companies in the Philippines are expected to post modest revenue growth this year amid tepid economic expansion and elevated inventory in the office and residential segments, analysts said.

“Revenue trajectory [is] on the way to recovery, but the journey can be challenged by moderating gross domestic product growth this year and the oversupply overhang in some segments like office and high-rise residential,” First Metro Investment Corp. Head of Research Cristina S. Ulang said in a Viber message.

The government has lowered its economic growth target for this year to 5%-6% from the previous 6%-7% range set for 2026 to 2028.

This came after a corruption scandal involving flood control projects dampened government spending and consumer confidence in the latter half of 2025.

Ms. Ulang also cited the oversupply of office and vertical residential units in some areas, which could weigh on listed developers’ revenue growth.

The Metro Manila office market has about 2.7 million square meters of vacant supply, while 80,300 condominium units remain unsold in the region, according to Leechiu Property Consultants’ fourth-quarter property market report.

Unicapital Securities, Inc. Research Head Wendy B. Estacio-Cruz said modest revenue growth is expected this year as the sector has yet to fully recover from tempered demand following a prolonged period of high interest rates.

In December, the Bangko Sentral ng Pilipinas (BSP) cut policy rates by 25 basis points (bps) to a more than three-year low of 4.5%. This marked the BSP’s fifth consecutive 25-bp reduction, bringing total rate cuts to 200 bps since August 2024.

BSP Governor Eli M. Remolona, Jr. recently signaled that the Monetary Board is nearing the end of its easing cycle.

However, Ms. Estacio-Cruz said interest rates remain relatively elevated and may continue to weigh on housing affordability, particularly in the mid- to mass-market segments.

Rising land, construction, and financing costs may also delay project launches, she added.

“Leasing assets in prime locations should remain resilient, while upper-mid to high-end residential projects are likely to drive sales, given their relative resistance to interest rate pressures,” Ms. Estacio-Cruz said.

As a result, developers are expected to rebalance their revenue mix this year, analysts said.

The country’s industrial and logistics sector also presents revenue opportunities for listed firms, particularly amid the growth of e-commerce, data centers, and cold storage facilities, First Grade Finance, Inc. Managing Director Astro C. del Castillo said.

Developers with hospitality and retail assets may also post steady profits, he said, supported by an influx of local and international events scheduled this year.

Sy-led SM Prime Holdings, Inc. reported a 10% increase in net income to P37.2 billion for the first nine months of 2025.

Ayala Land, Inc.’s nine-month profit rose slightly to P21.4 billion from P21.2 billion a year earlier.

Robinsons Land Corp. posted a 2% increase in attributable net income to P10.17 billion for the period.

Megaworld Corp. recorded a 16% rise in attributable net income to P15.93 billion.

Federal Land, Inc. posted a 6% increase in nine-month reservation sales, while Filinvest Land, Inc. reported a 5% rise in consolidated net income to P3.64 billion.

Century Properties Group, Inc. saw its nine-month net income climb 17% to P2.1 billion, while DoubleDragon Corp.’s consolidated net income edged up to P2.55 billion.

Cebu Landmasters, Inc. posted a 6% increase in consolidated net income to P3.1 billion, while Vista Land & Lifescapes, Inc. recorded a 4% rise to P9.46 billion for the first nine months of 2025.

Rockwell Land Corp. posted a 13.1% increase in consolidated net income to P3.5 billion as of end-September, while Sta. Lucia Land, Inc.’s net income fell 38% to P2.05 billion during the period.

“In our view, topline performance will be supported by improving leasing conditions, a gradual recovery in residential sales, and the increasing contribution of recurring income streams,” Ms. Estacio-Cruz said.

METRO MANILA’s key business districts are expected to face upward pressure on office rents this year, driven by strong demand from multinational firms and business process outsourcing tenants, analysts said.

“Rental performance will continue to be highly district-specific,” Mikko Barranda, director for commercial leasing at Leechiu Property Consultants, said in an e-mailed reply to questions.

Submarkets such as Bonifacio Global City (BGC) are likely to see upward pressure on rents as demand outpaces available supply, he said.

BGC posted the lowest vacancy rate among Metro Manila office submarkets at 9% as of end-2025, according to Leechiu Property Consultants’ Fourth-Quarter Property Market Report.

In contrast, districts with double-digit vacancy rates include Makati City (15%), Ortigas and Mandaluyong City (18%), Quezon City (19%), Taguig City (21%), Alabang (23%), and the Bay Area (28%).

“This trend will be reinforced by limited new completions and strong flight-to-quality preferences among multinational occupiers,” Mr. Barranda said.

He added that major central business districts (CBDs) such as Makati and BGC are expected to continue benefiting from strong tenant preference, constrained new supply, and sustained interest from multinational companies.

Submarkets with higher vacancy levels, however, may see “relatively flat rental growth in the near term,” he said.

Office rents in Metro Manila will remain a “case-to-case” scenario, said Kevin Jara, head and director of office services — tenant representation at Colliers Philippines.

“In established business districts with limited available space, such as Makati CBD, BGC and Ortigas CBD, we expect modest year-on-year rental growth in the range of 1% to 5%, supported by low vacancy levels,” he said in an e-mail.

“So far, we are not seeing any major space surrenders similar to the levels during the POGO (Philippine Offshore Gaming Operators) exodus, that could materially increase vacancy and put downward pressure on rents,” Mr. Jara noted.

However, Colliers is monitoring potential risks to office demand, including corporate layoffs overseas and the progress of proposed outsourcing-related bills in the United States, he said.

These include the Keep Call Centers in America Act and the Halting International Relocation of Employment (HIRE) Act, which aim to protect US-based call center jobs amid rising offshoring and the use of artificial intelligence-powered bots.

The Keep Call Centers in America Act seeks to limit federal benefits granted to companies that outsource call center jobs overseas.

Meanwhile, US Senate Bill 2976, or the HIRE Act, proposes a 25% excise tax on American firms’ payments to foreign service providers for work consumed in the United States.

Jamie S. Dela Cruz, research manager at Savills Philippines, said office rents in Metro Manila’s CBDs are likely to remain tenant-favorable overall.

She noted that elevated vacancy levels in some districts continue to give locators greater flexibility in lease negotiations, she told BusinessWorld in an e-mail.

“Despite this, office demand continues to be supported by the information technology-business process management sector, as the industry works to remain competitive by enhancing skills and attracting more global shared services,” Ms. Dela Cruz said.

She added that higher-quality, green-certified office buildings continue to command higher asking rents.

“Less competitive office stock that remains vacant could put pressure to the overall market and potentially further soften rental rates,” she said.

Data from Leechiu Property Consultants showed that as of end-2025, BGC remained the most expensive office submarket at P1,167 per square meter (sq.m.), followed by Makati City at P891 per sq.m.

Other office rental rates were recorded in the Bay Area and Pasay City at P798 per sq.m., Alabang and Muntinlupa City at P787 per sq.m., Ortigas and Mandaluyong City at P738 per sq.m., and Taguig City at P724 per sq.m. — Beatriz Marie D. Cruz