Foreign brands drive Manila malls boom
Mar 2, 2015
“With several new malls operational this quarter, supply of retail space has boosted,” concludes CBRE’s The Philippine Real Estate Industry Update and 2015 Outlook.
“Retail sales remained solid, demonstrating upticks in consumer spending as evidenced by the low inflation rate and an encouraging outlook for real estate and tourism sectors.”
Nationwide, the Philippines’ retail industry growth is being fuelled by both local and international brands expanding their footprints.
“The quarter saw the entry and expansion of new and existing global brands in different retail core sites. These international brands have recognised the potential of the Philippine retail market, signified by the country’s strong economic growth.”
Sweden’s H&M is a prime example: after a successful debut in Manila, the company has aggressively expanded its operations throughout Metro Manila with local major shopping mall operators. The first H&M outlet in Megamall occupies 3000 sqm over three floors and is now considered one of the largest retail stores in the Philippines.
Estancia Mall in Capitol Commons, which houses several retail outlets and restaurants, opened in the fourth quarter in time for the holiday rush. The building, which has a gross floor area of over 30,000 sqm meters, also incorporates office space.
Other Manila malls opening during the quarter were Robinson’s Place Las Piñas and City of Dreams Manila.
“With the holiday season at hand, the retail sector remained active with more international retailers showing interest in entering the domestic market. Consumer sentiment was sustained as major drivers such as the BPO sector and overseas remittances show no signs of slowing down,” said CBRE.
Diversifying into the retail segment, major developers are taking advantage of the ‘Retail- tainment’ concept wherein office and residential projects are including retail use.
“The purpose of this is to provide the overall retail experience to Filipino shoppers, giving them the power of choice at their own convenience. This factor is also seen to attract foreign retail players to dive into the Philippine market scene.”
These factors, says CBRE, will drive “upbeat” demand for, and supply of, retail space in Manila malls in the near future.
“Overall, the Metro Manila retail market is seen to remain strong and stable for the remainder of the year empowered by the expanding Business Process Outsourcing industry, Overseas Foreign Worker remittances, growing tourism and a growing middle-income market.”