Local brands close retail space, foreign brands enter Philippines market

“The retail sector saw more store openings than closings in the last quarter of 2022, with move-ins from several foreign brands,” says Janlo de los Reyes, JLL Philippines’ Head of Research and Strategic Consulting.

Store openings totaled 49.8k sqm of space while closures totaled 22.3k sqm for the whole of 2022.

The effect of holiday surge

The holiday surge drove retail store openings in the last quarter of 2022, which carried over to the first month of 2023.

Foreign brands such as Mitsukoshi, Decathlon, No Brand, and True Value opened new stores, while brands such as Feta Mediterranean, PaperMoon Café, and Levi’s saw store closures or move-outs.

Move-ins and move-outs: top retail categories

The food and beverage (F&B) retail category continues to lead both move-ins (openings) and move-outs (closures). The last quarter also saw many local brands across different retail categories move-out.

Metro Manila mall store openings and closures by retail category

Vacancy levels and rents

Despite new supply, vacancy levels declined. Vacancy levels last quarter are down to 5.1% (32.7 bps) in comparison to 2021. However, this is still far from pre-pandemic levels (around 3 to 4%).

With leasing activities accelerating, rents also rose. The average rent per sqm per month is now PHP1,705, which shows a 9.3% increase from the previous year.