Property consultant Jones Lang LaSalle (JLL) on Wednesday projected a steady stream of new retail spaces coming online in Metro Manila in the coming months when rent could prove slightly lower.
Janlo delos Reyes, JLL head of research, said rents could range from P1,605 and P1,750 or lower compared to the average of P1,746 at the moment.
JLL projects a steady demand for new shopping mall space from retailers.
“We don’t see any movement as mall developers and operators maintain their rent rates to continue attracting tenants. We forecast rents to decline slightly towards year end with new supply entering the market,” delos Reyes said.
According to JLL, 34,911 square meters of retail space went online in the second quarter, up 12 percent from only 31,215 square meters the quarter before.
Delos Reyes said this was the backdrop the mall developers moved into in addressing the demand for new rent spaces from retailer brands like Nitori, Giordano, Handyman, Muji, Mesa, Uniqlo, among others.
Food and beverage brands continue to lead the demand for more rent space, accounting for 23.2 percent of transacted volume, followed by home appliances and furniture stores and general retail with 11.5 percent.
A majority of the new store openings represent the expansion of existing brands but JLL also reported seeing foreign new brands entering the market such as the Nitori of Japa, delos Reyes said.
As for closures, local brands lead the pack due to competition from foreign brands expanding their presence in Metro Manila.
Delos Reyes also noted the majority of new retail space were opened in Quezon City (17,682 square meters) and Makati (15,721 square meters) by mall developers.
Delos Reyes said the opening of new malls helped reduce the retail space vacancy rate in Metro Manila to 6.3 percent from 6.5 percent a quarter earlier.
“Specifically, we observed that Gateway Mall in (Cubao,) Quezon City saw a significant decline in vacancy to 29 percent in the second quarter. The mall recently opened a new area which has a high occupancy rate of 88 percent,” he said.
The JLL said Parananque has the highest retail space vacancy of 16.8 percent, followed by Makati with 10.9 percent and Muntinlupa with 9.8 percent.
This will slightly increase towards year end as another 123,000 square meters from new shopping malls enter the market.
“This will take time to get filled up despite the steady retailer take up,” he said.
But Delos Reyes said retailers historically spend more and open new businesses in the fourth quarter.
