Malls will still thrive despite e-commerce
MALLS will continue to flourish in the Philippines despite the rise in e-commerce in the Philippines, according to global real estate firm Colliers.
Research associate Joey Bondoc said that despite retail vacancy in Metro Manila reaching 15.2 percent in the first quarter of 2022, which was up from 14.8 percent in the third quarter 2021, he expects that by the end of 2022, vacancy will only reach 16 percent, lower than their previous projections of 17 percent.
“The slight improvement is due to more brick-and-mortar retailers taking up physical mall spaces as consumer traffic reverts to pre-Covid-19 levels. Based on our first quarter 2022 Retail Survey, some Filipino consumers continue to prefer physical stores over e-commerce platforms,” Bondoc said.
“About 83 percent of respondents chose to shop in-store rather than online because they can physically feel the merchandise. Delivery and logistics issues as well as online security issues factor in as well,” he added.
This comes as in the period ending in August 2022, SM Investments Corp. reported that consumer traffic more than doubled year on year. This has resulted in an increase in revenues where SM Retail posted P163.7 billion in the first half of 2022, up 18 percent year on year.
The SM Store’s Executive Vice President for Operations and Sales support Dhinno Tiu noted that brick-and-mortar spaces will continue to thrive and remain relevant among Filipino shoppers despite the growth of e-commerce.
He added that retail spaces, particularly malls, are the “go-to community spaces” of Filipino consumers.
And now with activity returning in the country’s Central Business Districts, fringe areas, or places in the outskirts of these particular districts and city centers, are also becoming a hot commodity.
Over the past 12 to 36 months, Colliers has observed growing residential demand in fringe areas, including the Makati Fringe, Manila North and South, and the Camanava (Caloocan, Malabon, Navotas and Valenzuela) corridor. These submarkets accounted for about 26 percent of total condominium take-up in Metro Manila from 2020 to the first half of 2022.
“In our view, the lack of developable land and high property prices in central business districts have compelled investors and end-users to consider residential units in peripheral locations,” Bondoc pointed out.
“To capture the demand, we recommend developers look into developable land in fringe areas as the implementation of the government’s infrastructure projects such as the Makati Subway and the Metro Manila Subway should improve connectivity and support residential demand in these locations,” he added.