Foreign brands are going to the provinces and setting up shop in retail centres such as Megaworld’s Upper East Mall in Bacolod City. — MEGAWORLD WEBSITE
MANILA: More foreigners are expected to enter the country’s retail property segment next year, banking on the Philippines’ consumption-heavy market to drive growth amid shifting customer behaviours.
In its 2025 Philippine Property Market Outlook Report, real estate investment management firm Colliers Philippines said foreign retailers were finding the country more attractive for investments.
“The Philippine economy is primarily consumption-driven, and this entices foreign retailers to invest in the country,” Colliers said.
“Foreign players are now more aggressive in taking up physical mall space.”
It added that companies in the home furnishing segment would be among those looking to expand to the Philippines to meet demand for home improvement.
So far, Japan-based Nitori and Australia-based Anko entering the Philippine market this year, with the latter eyeing two more branches by 2025.
Nitori, meanwhile, wants to have 65 Philippine stores by 2035.
Colliers research director Joey Bondoc told the Inquirer in an email that food and beverage (F&B) retailers were also “taking advantage of Filipinos’ affinity for food and our economy being led by personal consumption.”
Bondoc added that foreign F&B brands were projected to take up 31 percent of the total space to be occupied by F&B retailers in Metro Manila in the next 12 months.
At the same time, foreign clothing and footwear companies will likely account for around 70 per cent of the fashion brands opening physical stores next year.
As a result, vacancy rate in the retail space is expected to slightly shrink to 15 percent next year from 15.1 percent currently.
“It is obvious that foreign retailers are taking advantage of our young and millennial workforce that propel spending across the country,” Bondoc said.
This comes as developers are redesigning their existing retail spaces to introduce new concepts and become “more experiential [and] less transactional,” according to Colliers.
It noted that developers were taking advantage of high demand for “more immersive experiences” inside malls by expanding their food halls, upgrading cinemas and putting up popup stores to gauge market sentiment.
“This segment is making a comeback after being disrupted heavily by the pandemic due to physical distancing.”
For one, real estate giant SM Prime Holdings Inc. is currently renovating Mall of Asia in Pasay City to include a football field the size of the International Federation of Association Football’s, or 105m by 68m.
Other major malls that are currently being renovated are SM Megamall, SM East Ortigas and Robinsons Forum. Ayala Land Inc. is also pursuing its P13-billion plan to reinvent Glorietta and Greenbelt 2 in Makati, Trinoma in Quezon City, and Ayala Center in Cebu province.
Colliers likewise pointed out that the shift to key areas outside Metro Manila has spilled over to the retail sector.
Retail centre in other regions will soon sprout, including Filinvest Mimosa Mall and Power Plant Mall in Pampanga province, and The Upper East Mall in Bacolod City. - Philippine Daily Inquirer/ANN
