Retail vacancy rate in Metro Manila is expected to shrink back to its pre-pandemic levels by next year, according to a report from Colliers Philippines.

Vacancy among retail spaces in the capital region eased to 11.4 per cent as of September 30 and is forecast to decrease to 9.5 per cent by next year’s fourth quarter, the report finds. Vacancy was recorded at 9.3 per cent in the third quarter of 2019.

By late 2027, this rate is expected to be 8.2 per cent, which is lower than the pre-pandemic benchmarks.

The report attributed the improvement to the entry of foreign retail brands into the Philippines market, as well as the accelerated expansion of existing brands.

“Foreign brands have been coming to the Philippines,” said Colliers research director Joey Bondoc. “Some of them already left, but they’re now returning, so it’s a huge comeback for them.”

Bondoc added that many companies are attracted by the aggressive refurbishment of major developers as they focus more on experiential retail.

Colliers’ report also highlights that the food and beverage, fast fashion, and retail industries are among the largest occupiers of retail space.