Mall owners should invest in online shops to “future-proof” their business, says property management and research firm Colliers Philippines.
It says the overall vacancy in Metro Manila, for instance, has risen 10 to 11 per cent this year following the completion of about 500,000 sqm of extra leasable space. However, it is also possible the vacancy rate may ease to 8 or 9 per cent as retailers absorb the new space.
Cebu follows similar trend. According to last year’s Cebu Property Market report by Pinnacle Real Estate Consulting Services, vacancy rates reached 12 per cent in 2015 but have eased to 9 per cent. At the end of last year, Cebu had 1.08 million sqm of commercial and retail spaces available.
“The popularity of online shopping will surge over the medium to long term, given the improving access to faster internet and proliferation of smartphones,” says Colliers research manager Joey Roi Bondoc.
While only 1 per cent of the population uses online retail platforms, he says this presents a massive opportunity that developers and retailers could tap. As more Filipinos embrace online shopping, the need for logistics services and warehousing will also surge.
Collies says some of the largest mall groups in the Philippines have already invested in online retail.
In February, the Ayala Group acquired a 49 per cent stake in Zalora Philippines, while the following month the SM Group acquired 34.5 per cent stake in the parent firm of 2Go Group, an integrated transportation provider.
Mall giant SM last year partnered with Lazada Philippines, while Stores Specialists (SSI) – the company behind Rustan’s and exclusive Philippine franchisee of such brands as Estee Lauder, Gucci and Kate Spade – has launched an online shop for Lacoste, relaunched Beauty Bar’s online platform, and expanded online shopping sites SSIlife.com.ph and Payless.ph.