85,000 sq.m. of Grade A office space to enter Davao by 2029 — PRIME

DAVAO’S office sector will see an influx of office space with approximately 85,000 square meters (sq.m.) entering the market in three years, according to property consultancy firm PRIME Philippines.

Around 85,000 sq.m. of Grade A office space will be introduced from 2026 to 2029, the firm said in its special market report. It will largely be driven by the business process outsourcing segment, accounting for 35% of demand, and information technology segment (25%).

The report said Gokongwei-led Robinsons Land Corp. is projected to lead the 322,000-sq.m. office space expansion in 2027, with the launch of Cybergate Victoria in April bringing over 25,000 sq.m. of gross leasable space.

Sy-led SM Prime and Tan-led Megaworld are also slated to launch office properties that would put Davao’s supply at a record-high of 381,000 sq.m. in 2029.

These developments were driven by the province’s fiscal revenue of P3.13 million as of 2024, placing Davao as the second most fiscally productive for highly urbanized cities in Mindanao behind Cagayan de Oro, Misamis Oriental at P4.31 million.

PRIME Philippines said further rent segmentation will follow the introduction of new office spaces from major real estate developers.

Davao province’s office market recorded an occupancy rate of 96% in 2025, with estimated 12,000 sq.m. of vacant spaces left. It is 3,000 sq.m. lower than 2024’s record of 15,000 sq.m. in vacant spaces with 95% spaces occupied.

The firm said total net take-up in 2025 was around 10,000 sq.m. with no additional supply. The last recorded peak was in 2022 with around 58,000 sq.m. in net take-up and 35,000 sq.m. in additional supply, totaling to 93,000 sq.m. in office supply.

In the first quarter, information technology and business process management (IT-BPM) expansions from companies like Alorica, Concentrix, Connext, ibex, iQOR, Ingenuity, Sixeleven, Smart Solutions, and VXI took up a combined total of 284,000 sq.m. in office occupancy, or 75% of the total supply. The remaining 25% of supply went to traditional offices.

The consultancy firm projected that the lease rate will range from P500 to P900 per square meter, up by roughly P100 from 2025’s reported P500-to-P800 rate. Average rates projected for the rest of the year stand at P640, up by around P30 from last year’s P610 average. — Juliana Chloe A. Gonzales