Shopping malls facing highest vacancy rate since Asian crisis

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About 14 percent of selling space in Metro Manila’s shopping malls will likely be vacated by cash-strapped retailers—the highest vacancy rate seen since the Asian crisis—as the coronavirus pandemic has shattered consumer confidence and driven away foot traffic from crowded areas.

This is according to property consulting firm Colliers International Philippines, which also reported that the pandemic coupled with the exodus of some online gaming players, had also caused vacancy rates across Metro Manila’s office and residential properties to shoot up.

From 2016 to 2019, vacancy rates at shopping malls had been stable at 8-9 percent. The last time the Philippines had seen as 14-percent vacancy rate was in 1999 during the Asian crisis, but the peak was seen at 19 percent in 2001.

A number of footwear and clothing brands have closed their physical mall space as they fully migrated to online selling. Some retailers of personal accessories and miscellaneous items have also expan­ded their online reach and are not likely to take up new brick-and-mortar space in the next six to 12 months, Bondoc said.

As such, rental rates in shopping malls are seen to decline by 10 percent this year—deeper than the 7.3-percent contraction seen in 2009, during the global financial crisis.


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