Metro Manila retail amid Middle East conflict: Aim to recover and rediscover

Metro Manila’s retail sector continues its gradual recovery, with vacancy easing to 10.8% in Q1 2026 from 11.4% in Q3 2025, driven by steady tenant take-up from both global and regional brands.

- By JOEY ROI BONDOC

Retail vacancy continues to improve

New entrants such as Bershka, Anko, Nitori, and Maison Kitsuné highlight sustained confidence in the market, particularly in prime malls in major business districts. Vacancy is projected to further decline to 10.2% by year-end, supported by stable demand and limited incoming supply. However, external risks, including geopolitical tensions, are expected to delay a full return to pre-pandemic vacancy levels until the first half of 2027, signaling a more measured pace of recovery despite positive fundamentals.

At the same time, the retail landscape is evolving through premiumization and experience-led innovation. Total retail stock reached 7.9 million sq meters, boosted by new developments such as Ayala Malls Arca South and Park Triangle Mall. Developers are increasingly shifting toward curated, lifestyle-oriented formats, while foreign brands expand flagship and immersive store concepts. Malls are also prioritizing immersive experiences—introducing wellness amenities, hybrid spaces, and immersive attractions—to drive foot traffic. This transition reflects a broader shift from transactional retail toward experience-led destinations, positioning forward-looking malls to remain competitive amid changing consumer preferences.