The retail sector takes an upbeat turn to innovate the consumer experience by offering immersive, experiential activities that can be shared with friends and families. Such significant developments are also marked by the developers’ bold move to refresh retail space, expansion of foreign brands, and home furnishing giants betting big on the local market, as reported by Colliers Philippines.

For the 1st quarter of the year, Metro Manila recorded a total of 7.9 million sqm of leasable retail space, and new retail supply of an average of 158,000 sqm is expected to be added annually in the next two years.

Launched in February, MOA Sky is a 55,000 sqm attraction in SM Mall of Asia with a football pitch, amphitheater, sanctuary, alfresco dining, and a paw park. SM Supermalls has earmarked P100 billion in capital expenditure and will spend P21 billion on mall expansion and redevelopment. SM Hotels recently broke ground on SMXCITE, the country’s largest exhibition venue with 18,000 sqm of leasable area, and is scheduled to open in 2027.

It was also reported that Ayala Malls has allocated P13 billion for the redevelopment of its flagship malls and another P5 billion to renovate malls in Davao, Pampanga, and Quezon City.

“Developers, including Robinsons Land, Sta. Lucia Land, and Rockwell Land, have been ramping up their projects. Pampanga will be housing its first Power Plant mall, the first outside of Metro Manila, in 2027,” said Joey Bondoc, research director of Colliers Philippines.

Bondoc also shared that retailers of home furnishings continue to expand their presence and place their bid in the local market. Home retailers are betting on the growing middle class, the steady remittances of OFWs, new residential developments within and outside Metro Manila, and the low saturation for the home retail segment. “The residential market in Metro Manila has more than 170,000 unsold condo units. Once these units are taken up, the buyers or owners will be requiring home furnishings for those condo units, and that will result in greater demand for home furnishing brands,” he added.

Anko, an Australian home and lifestyle brand, opened its first store in Glorietta 2 in Makati in 2024 and its second in Alabang Town Center last May. Its third and largest store, at 1,634 sqm, will open in Trinoma Mall, Quezon City, in July. Home furniture and décor store Nitori opened its first branch in BGC, Taguig, while its second store was launched in Makati last year.

Bondoc also observed that foreign retailers are entering the food and beverage segment. Clothing store Uniqlo took the lead by opening its café in 2023, while Japanese brand Muji recently opened a bakery and coffee counter in its flagship store in Makati.

He pointed out that this key market trend will continue to expand. “The aim of retailers is for customers to sip and shop, so they will stay longer and spend more. We are also seeing coffee shops, such as the Coffee Bean and Tea Leaf, within department stores. The food halls, formerly known as food courts, are now being redeveloped and refurbished to continue serving a mix of cuisines. As an example, the World Kitchens in Gateway Mall covers 2,500 sqm of food hall space with 15 show kitchens.”

Bondoc added that the arrival of the Michelin Guide in the country will bring more developments in the industry.

In the 1st quarter of 2025, the retail vacancy in Metro Manila registered at 13 percent, an improvement from 15 percent in the 3rd quarter of the previous year. “This only indicates greater mall space absorption. We are likely to see more vacancies in the 4th quarter of 2026, where the mall vacancy across Metro Manila reverts to the pre-pandemic rate of 9.8 percent,” said Bondoc. “When these retailers occupy space, they take massive retail spaces, and that will solve the substantial vacancy,” he added.

Among the major business districts, Fort Bonifacio leads with a low retail vacancy rate of 5.2 percent, followed by Makati with 9.5 percent, Ortigas Center with 10.9 percent, and the Bay Area with 11.4 percent. The redevelopment of the Makati CBD, including expansion of mall spaces and retail shops, is expected to contribute to the absorption of retail space. Bondoc said, “We believe that Makati can accommodate more retail space given that the CBD has the strongest and highest spending power across the capital region.”