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. 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.
Continued premiumization of retail
As of end-Q1 2026, total retail stock in the capital region reached 7.9 million sq meters. From Q4 2025 to Q1 2026, Colliers recorded the delivery of 96,400 sq meters (1.0 million sq feet) of new retail space, with the completion of The Plaza Bagong Silang in Caloocan, The Shoppes at Park McKinley West, Park Triangle Mall in Fort Bonifacio, and Ayala Malls Arca South in Taguig.
National developers have been aggressively shifting towards premiumization. Upcoming developments such as the Power Plant Mall Angeles in Pampanga, Robinsons Bacolod, SM Harrison in Manila, and SM Nuvali in Laguna reflect a move away from conventional mall models toward a more curated, lifestyle-oriented retail environment that highlights design quality and a differentiated tenant mix.
On the other hand, Colliers is also seeing premiumization being reinforced by the aggressive expansion of foreign brands, with some taking up massive physical mall space to accommodate their flagship concepts and experience-led layouts. Metro Manila malls are seeing a rise in foreign home furnishing and personal accessory brands taking up massive physical mall space. We are also seeing a number of retailers complementing their shops with cafes, which act as foot traffic drivers.
More experiential, less transactional
In 2025, major developers have also reported an increase in consumer traffic. These developers attributed the increase in consumer traffic to new attractions and refreshed tenant mix across their malls. In our view, there is also a growing need to integrate immersive retail to draw in shoppers.
Some developers have introduced features such as pickleball courts, hybrid libraries, and other wellness facilities to enhance overall mall experience. Colliers believes that malls that evolve with shifting consumer preferences and invest in differentiated concepts are better positioned to sustain consumer traffic.
What’s next for Philippine retail?
Mall developers are likely to continue building brick-and-mortar mall spaces, but with limited and curated leasable spaces. Colliers Philippines sees the proliferation of smaller retail formats that capture the immediate needs of their captured markets. We also believe that the limited new supply will help faster recovery of the retail sector, especially now that the Middle East conflict is likely to challenge gains achieved by the sector post-COVID.
In our view, experiential retail is here to stay. But as mall operators attract more of these tenants that offer immersive retail, both retailers and mall developers should continue to innovate. After all, these renovations and innovations are important in encouraging Filipinos to spend.
While Metro Manila malls are renovating, we see similar redevelopments outside of the capital region. It is no longer surprising to see premium retail experience proliferating in key urban centers outside of Metro Manila, such as Angeles City, Clark Freeport, Cavite, Laguna, Cebu, Bacolod, Cagayan de Oro, and Davao. We expect more mall developers and retailers to target high-growth areas and maximize Filipinos’ propensity to shop.
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