By Manila Bulletin
As more retail spaces are built in the third quarter of the year, experts from real estate and investment management firm Colliers have forecasted vacancy rate to further rise to 17 percent next year from 14.l4 percent in the first quarter this year due to new available physical mall space in 2024.
During the third quarter Philippine Property Market Briefing held at the Insular Life Building in the Makati Central Business District (CBD) on Oct. 25, Colliers Research Director Joey Bondoc said the firm’s panel of experts are “optimistic of sustained interest from retailers, especially those interested to occupy brick-and-mortar mall space in prime locations across the capital region.”
“We are projecting a slight increase in vacancy starting 2024 due to substantial delivery of new mall space,” he added.
Colliers’ retail property report indicates that vacancy increased to 14.4 percent in the third quarter from 14 percent in the first quarter of 2023 due to new supply of retail spaces.
It noted that 81,300 square meters of new retail space was completed from the second to third quarter this year, which include the Parqal Mall in the Bay Area, Kai Mall in Caloocan City, Nova Plaza Mall in Quezon City, and Greenbelt 4 in the Makati CBD. Other malls to be completed until the end of this year are One Ayala in Makati CBD, and Gateway Mall 2 in Quezon City.
Rents are seen to rise 2.2 percent faster in 2023 than the one percent growth recorded in 2022 due to more local and foreign retailers absorbing space in malls, and sustained consumer traffic.
Vacancy is expected to rise by 17 percent next year as 385,900 square meters of new retail space is built. Colliers expects the annual completion of 190,600 square meters of new mall space from 2024 to 2026, with new malls in San Juan and Quezon City.
Among the retailers that have taken up the most space in physical retail establishments in the third quarter are food and beverage (43 percent) and fashion (26 percent) businesses.
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