Despite slower personal consumption expenditure in the first nine months of 2025, malls across Metro Manila continue to record healthy occupancy levels. Mall operators have been proactive in refreshing their retail spaces, and this contributes to a stronger take-up of physical mall space across the capital region. Major developers have been earmarking billions for the reinvigoration of their retail centres, and this enormous retail capex is also likely to benefit other growth areas outside Metro Manila.
Colliers Philippines believes that ramping up omnichannel retail strategies is a must these days. Online and brick-and-mortar retail spaces should continue to complement each other, especially with the influx of foreign retail brands in the Philippines.
Colliers encourages mall operators and retailers to take advantage of the traditionally strong fourth quarter to lure more consumers to stay longer and spend more in malls. A sustained retail space absorption is essential in ensuring that Metro Manila’s mall vacancy reverts to the pre-pandemic level by the end of 2026.
Foreign retailers drive demand as developers temper new supply
Colliers expects sustained take-up from foreign clothing and home furnishing retailers. Food and beverage (F&B) brands are likely to remain the primary drivers of physical mall space take-up over the next 12 months.
Regional and district center mall expansions were completed in Q3 2025. From 2026 to 2028, Colliers expects limited new retail supply as developers prioritize the redevelopment of existing malls across the capital region.
The Metro Manila market is experiencing an influx of foreign home furnishing and personal accessory brands occupying massive physical mall space. Colliers encourages developers to aggressively chase these retailers as they are not just aggressive in opening new stores, but they also chip in faster space take-up, given the humongous brick-and-mortar space that they occupy.
Banking on holiday induced-spending
The fourth quarter is traditionally a strong period for retail, driven by employees’ holiday bonuses and increased remittances from overseas Filipinos. With inflation likely settling below the government-projected target of between 2 and 4 percent in 2025, Colliers encourages mall operators and retailers to ramp up marketing initiatives to take advantage of Filipinos’ greater disposable incomes and increased propensity to spend this holiday season.
Mall operators should also carefully curate holiday-related events to mount in activity centers to attract more mallgoers.
Amplifying omnichannel strategies
In our view, mall operators and retailers should continue improving the omnichannel shopping experience of consumers. This is particularly crucial towards the end of the year when we expect more shoppers to do a mix of online and offline holiday shopping.
With retail vacancy nearing and consumer traffic exceeding pre-pandemic levels, we believe that brick-and-mortar stores are far from obsolete, proving that physical stores remain essential to Filipino shopping habits. Mall operators have been successful in drawing in more visitors by hosting bazaars and concerts within their activity centers, while online platforms enhance convenience by streamlining check-out processes and offering discounted shipping vouchers and expedited deliveries. Colliers believes that an effective omnichannel strategy is crucial in supporting the retail sector’s recovery.
Expansion of experiential and immersive retail space
The future of Philippine retail will be experiential. More mall developers are integrating activity centers into their spaces where families and friends can do activities together. This strategy appears to be working, with more consumers enticed to stay longer within retail centers and spend more.
Over the past few quarters, we have seen major developers offering these experiential spaces–SM building a football field atop the SM Mall of Asia, while a couple of operators carving spaces for mallgoers’ pets.
Retailers are also offering new concepts to maximize Filipinos’ trips to malls. The sip-and-shop (e.g., department stores and bookstores housing coffee shops) concept proliferates across Metro Manila. In our view, these retail concepts will remain popular moving forward as Filipino customers become more discerning and get exposed to the premium retail experience being offered abroad. These retail concepts also take up massive brick-and-mortar space, contributing to greater mall space absorption moving forward.
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