More malls on the horizon in the PhilippinesApril 25, 2014 / By
Why go “malling?” In addition to offering a large variety of goods and services, shopping malls encourage social activity; they are convenient places to meet friends and share time together on common interests, such as shopping and dining. Many Filipinos even view shopping malls as indoor parks that allow them to escape the hot sun and the torrential rain.
Property developers in the Philippines are capitalising on this demand for shopping mall therapy as is evident from the growing retail property supply nationwide. Strong retail demand is being fueled partly by the sustained growth of Overseas Filipino remittances, which grew by 7.37% in 2013, infusing USD 23 billion into the local economy. The continued strong performance of the Offshoring and Outsourcing industry is another major contributor which is increasing disposable income and fostering consumption of retail goods. These factors, together with a positive outlook for the economy, are contributing to the demand for more retail space, prompting developers to invest in retail projects.
By end-2013, existing shopping mall space in the country reached 13 million square metres with Metro Manila contributing almost half at approximately 7 million square metres. The largest malls in the country, among the largest in the world, are situated in Metro Manila with SM City North EdSA, SM Mall of Asia and SM Megamall together contributing about 1.2 million square metres of floor area.
Shopping centres in the provinces contribute some 6 million square metres with the bulk of it in Cebu, Davao, Cavite, and Pampanga. A new wave of developments is underway which will inject around 1.4 million square metres of new supply and bring the retail area in the provinces on a par with that of Metro Manila by 2015.
While we see shopping malls on the rise all over the country, online shopping is likewise growing in popularity, as evidenced by the number of buying sites available today. Online shopping gives small players an opportunity to compete at some level with seasoned retailers without the cost of having their own shops. It also provides access to virtual retail centres that expand the shopping landscape for local consumers without the need to visit tangible property. In the Philippines, the growth of e-commerce is being driven by its convenience factor, together with the presence of group buying sites that offer attractive discounts to customers.
Going forward though, physical shopping centres will continue to draw the bulk of shopper patronage as, apart from merely offering the basic “boxed” collection of stores, they have turned themselves into recreational destinations, offering experiences that online “retail centres” cannot match.
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