(Source: The Philippine Star, by Iris C. Gonzales | Aug. 24, 2015)
The country’s top three retailers, Ayala Land Inc., SM Prime and Robinsons Land, are expected to launch more shopping malls and account for the bulk of the new retail space this year through 2018 on the back of rising incomes.
“By 2018, total pipeline is estimated to be at 600,000 square meters. The optimistic consumer sentiment sales will grow and put upward pressure on rents, reaching five percent to 10 percent growth in 2015,” global real estate advisor Savills World Research said in its Asian Cities Report on Manila Retail in the first half of 2015.
The research report noted more shopping malls are launching in the next few years.
It also said that approximately 600,000 sqm of new retail space are in the pipeline, with 75.2 percent to be delivered by the top three players.
“Ayala will be the most active by opening two new shopping malls with a couple of new podium retail spaces in 2015, while several malls are expanding across the city,” the report read.
Among the new projects in the pipeline, the largest is SM’s 200,000-sqm Mall of Asia expansion, which would increase the property’s total area to 550,000 sqm, making it one of the world’s biggest malls.
Aside from expansion in Metro Manila, developers are also exploring more opportunities in the provinces and neighboring cities.
“One example is the SM City Seaside in Cebu with a gross floor area of 472,400 sqm. SM City Seaside is also slated to be among the world’s largest shopping malls once it opens in 2015,” the report said.
Savills World Research also sees expansion of the high-end retail sector in the Entertainment City, the 100-hectare Las Vegas-style casino complex of the Philippine Amusement and Gaming Corp.
“Aside from the upcoming malls, the retail industry is also expected to shift its attention to the casinos in Entertainment City, as this will be the new home of several luxurious brands once its retail sections become fully leased out within the next year or two,” it said.
And aside from the top three players, Savills World Research said other retailers are expected also to play a major role in the growth of the sector.
These include Cosco Capital and DoubleDragon Properties, which are currently executing an aggressive retail expansion strategy, mainly outside Metro Manila.
DoubleDragon for instance, aims to build 100 malls by 2020 and is on track with its short-term goal of having 25 malls by the end of this year after securing its 15th site last December.
On the other hand, Cosco Capital is planning to put up eight malls over the next two years after recently acquiring a portfolio of five commercial properties and nine supermarkets that are under the Puregold brand.
“Different and more modern retail development formats, such as convenience stores and hypermarkets, are also on the rise. The convenience store segment is a rapidly gaining footprint on the market, close to the BPO centres where professionals work day and night. Japanese convenience store giant Lawson Inc. entered into a partnership with the local brand Puregold last year to tap these favourable conditions and roll out 500 stores by 2020,” it said.
In all, the report said the strong economic performance is keeping the real estate market buoyant across all sectors.
“Aside from the outsourcing industry, the expected economic growth of six to seven percent has resulted in increased business activity, driving the demand,” it said.
Article Link: http://www.philstar.com/business/2015/08/24/1491365/top-retailers-going-full-blast-mall-expansion