Retail market rebounds with positive absorption reversing previous contractions

• The retail market rebounded strongly in Q3, with positive net absorption of 51,000 sqm, reversing the contractions observed previous quarter as retailers strategically open shops during the quarter in preparation for the projected spending during the holiday season.
• The Food & Beverage sector dominated store openings, with local brands expanding rapidly amid increased consumer spending.

Vacancy rates improve significantly as supply holds steady

• No new retail completions were noted in Q3 2025, as developers continue to position planned openings for Q4 2025. Approximately 120,000 sqm of additional retail space remains scheduled to enter the market before year-end, which may impact vacancy levels.
• Overall vacancy improved to 6.7% in Q3 2025, a significant 83.2 bps decline q-o-q, owing to increased leasing activity during the quarter and the absence of new supply.

Retail rents remained stable

• Average retail rents remained stable at PHP 1,759 per sqm, per month in Q3 2025, as operators maintained competitive pricing to attract tenants.
• Capital values rose to PHP 240,012 per sqm in Q3 2025, with the investment market showing steady growth. Market sentiment improved with the BSP’s 25-bps rate cut to 5.0%, potentially encouraging investment as financing costs moderate.

Outlook: Positive market momentum expected to sustain into year-end

• Market fundamentals remain solid, with a projected decline in vacancy rates behind expected new store openings combined with stable rent conditions.
• The BSP’s rate cut to 5.0% should further support investment activity and encourage continued retail expansion opportunities.