Property consultancy JLL sees new supply of retail spaces to come online from the expansion of existing mall developments and the operation of new malls in Metro Manila.
The market anticipates 129,000 square meters (sq.m.) of new retail space by the end of 2025 as malls in Quezon City, Mandaluyong, and Makati undergo expansion and development, said Janlo delos Reyes, JLL head of research, in a report.
Based on JLL’s data, Metro Manila has total retail supply of 7 million sq.m
Delos Reyes said these include the expansion of Trinoma, Ayala malls and SM Megamall.
Trinoma will add 40,000 sq.m. in the fourth quarter; Ayala Malls Clover Leaf phase 2, 40,000 sq.m. also in the fourth quarter and;
SM Megamall, 28,000 sq.m. by the second quarter of the year.
A new mall, Parqal Lifestyle Mall in Paranaque City, will add 52,000 sq.m. in the fourth quarter.
JLL said Bonifacio Global City (BGC) and Makati City are expected to see fewer new developments, with the Greenbelt 1 renovation adding 30,000 sq.m. by the fourth quarter of 2028 yet.
According to Delos Reyes, rental rates are expected to decline, with rates to hover around P1,700 per sq.m. per month by the end of the year.
He said new mall openings and expansions are expected to lower rental rates and increase vacancy levels the short- to medium- term.
In the report, JLL said store openings continued to surge in the fourth quarter of 2024 at 41,000 sq.m. in total, against 8,000 sq.m. of store closures.
In terms of new store openings in 2024, JLL said majority or 63 percent came from local brands or operators, while 37 percent came from foreign operators.
“Majority of the activity that we saw in 2024 came from the expansion of foreign and local brands. But store closures were led by local brands, given that there is tightening competition within this domain. But we’re still seeing minimal closures with regard to foreign operators in the market,” Delos Reyes said.
Some of the notable new entrants in the market include Anko, Love Bonito, Foot Locker, Flying Tiger among others.
According to Delos Reyes, food and beverage accounted for majority of store openings and store closures in 2024.
“it’s quite a dynamic, we’re seeing a lot of movement here, particularly from local brands which are being squeezed out by foreign brands. Nonetheless, there is still some growth for the local brands as homegrown concepts are still expanding their footprints in the metro, he added.
For general retail, JLL said it saw a surge in store openings in the home furnishing sector such as Natori, Anko and MUJI in 2024
JLL said with no new retail space stock and the surge of store openings in the fourth quarter of last year, vacancy levels went down to around 6.2 percent during the period.
“ This is reflective of the strong retail demand during the fourth quarter,” Delos Reyes explained.
Rents climbed by around 3.1 percent quarter-on- quarter, and around 2.1 percent on a year-on-year basis.
Delos Reyes said this again is due to the strong retail demand in the fourth quarter of the year with all key shopping districts, such as Makati central business district (CBD), BGC and Ortigas Center recording upticks with regard to their rentals to P2,000 per sq.m. per month for Makati CBD, P1,700 for BGC and Ortigas Center, P2,000.
