Developers (should) maximize opportunities by further adopting Industry 4.0 practices to modernize warehouses, building more cold storage facilities, exploring co-working and flexible warehousing, and converting vacant mall and office spaces into fulfillment centers.
The pandemic and lockdowns have compelled mall operators to implement innovative strategies to reach consumers and adjust to slower consumer traffic.
According to Colliers, mall owners will continue to roll out offline-online strategies to prop up retail demand.
With the limitations brought about by the pandemic and consumers shifting to online shopping, Colliers said retailers will continue to adopt an omnichannel approach as they further tap the e-commerce market.
Some mall operators have introduced curbside pick-up where customers are offered a contactless option to get their orders. Others have rolled out personal shopper services to reduce the risk of transmitting the COVID-19 and to enable contactless shopping.
Ayala Land is offering DeliverEasy and Ayala Malls Neighborhood Assistant (ANA); Megaworld has launched its lifestyle delivery app Pick.A.Roo; SM Supermalls has introduced Get and Go which offers curbside and drive-through pick-ups for essential needs while Robinsons Malls is offering RingRob, Rpersonal Shopper and Rdelivery services. A number of retailers have also been aggressive in rolling out online shopping strategies.
Swedish furniture giant Ikea recently announced that they will likely open their online store months before the completion of their physical store in the Ba y Area. H&M has partnered with Zalora to setup its first e-commerce marketplace while Merrymart is pioneering the dark grocery stores concept that intends to provide a 15-minute delivery service in selected cities in Metro Manila.
Among the malls lined up for completion from 2021 to 2023 are Mitsukoshi Mall, SM City Grand Central, Gateway Mall 2, One Ayala Retail, Parqal Mall, Greenhills Center, and SM Mall of Asia Expansion.
Colliers believes that starting 2021 the pace of construction of new malls will likely hinge on the improvement of Filipinos households’ consumer confidence and purchasing power; and retailers’ propensity to continue taking up physical mall space despite the growing popularity of online shopping.
“From 2020 to 2022, we see retailers engaged in food and beverage (F&B), medical and other essential services driving retail space take-up,” Colliers said in a report.
Over the next 12 months, Colliers sees landlords with rising vacancies exploring the viability of converting their vacant spaces into flexible workspaces.
This is crucial given that malls are near residential communities; this arrangement should significantly reduce employees’ commuting time and improve work-life balance.
Some developers are also seen converting their vacant spaces into fulfillment centers or micro warehouses to enable retailers reach last mile deliveries.
Warehousing, logistics support
Mall operators and retailers will likely firm up partnerships with logistics firms and warehouse developers to reach last mile deliveries. This requires an adequate and versatile network of logistics infrastructure.
As such, there will be healthy demand for warehouses. With increasing competition in the retail landscape, mall operators need to differentiate and partner with logistics and warehousing providers to keep business
“We see developers tapping into the sector’s potential growth as shown by rising storage investments in the country,” Colliers said, citing data from the Philippine Statistics Authority (PSA) which showed that transportation and storage accounted for 33 percent or P14.8 billion of total approved foreign investments in the first half of 2020, an all-time high.
Colliers urged developers to maximize opportunities by further adopting Industry 4.0 practices to modernize warehouses, building more cold storage facilities, exploring co-working and flexible warehousing, and converting vacant mall and office spaces into fulfillment centers. Selected mall operators have announced their plans to convert certain retail spaces into microwarehouses. Demand for these facilities will likely be driven by tenants shifting to e-commerce. Potential locations for these facilities include Quezon City, Manila, Pasig, Makati, Pasay, Muntinlupa, Marikina.