Retail sector shows strong growth

• The Q4 2025 retail net absorption of 99,300 sqm reflects strong holiday season demand and year-end store openings as retailers capitalizing peak shopping periods and seasonal consumer spending patterns.
• The food and beverage industry leads new store launches responding to rising consumer spending.

Vacancy falls amid supply delays

• No new retail completions were noted in Q4 2025, as developers have shifted all planned openings to 2026. Previously scheduled year-end retail space was delayed, tightening vacancy levels in the near term.
• Overall vacancy improved to 5.1% in Q4 2025, a significant 162.2 bps decline q-o-q, due to increased leasing activity during the quarter and the absence of new supply.

Retail rents hold steady

• Average retail rents remained stable at PHP 1,759 per sqm per month in Q4 2025 with no rental rate movement during the quarter.
• Capital values increased to PHP 242,892 per sqm in Q4 2025. The Bangko Sentral ng Pilipinas’ December rate cut to 4.50% supported investment sentiment by reducing financing costs.

Outlook: Sustained retailer expansion to drive sector

• Retail demand is anticipated to strengthen in 2026 as foreign brands a projected to sustain store expansion. Food and beverage sector, leading store openings during Q4 2025, is expected to continue driving leasing activity.
• The rental rate is positioned for stronger performance in 2026 as economic conditions stabilize and retail activity gains traction. Landlords are expected to maintain pricing discipline while capitalizing on improved leasing conditions.