Retail rents held steady in the second quarter, with global retailers—particularly coffee and fast‑fashion chains—accelerating expansion into provincial markets while other real estate sectors weakened.
The latest market monitor shows retail was the only segment that kept rental levels unchanged, driven by strong demand for prime locations and robust consumer spending supported by overseas worker remittances.
The head of retail and transaction management highlighted retail and consumer properties as the most reliable asset class in the current environment.
Among high‑street districts, Makati recorded the steepest rent rise at 9%, followed by Alabang with a 3% increase; monthly rents varied from P800 to P2,800 per square meter in Makati and P800 to P1,100 in Alabang.
Rents in Fort Bonifacio, Quezon City and the Bay Area remained flat, while Ortigas and Cebu experienced declines of 2% and 20% respectively.
The sector’s resilience is linked to continued expansion by international retailers, with food and beverage operators accounting for eight out of ten new entrants.
Coffee chains are a primary growth engine, with major brands targeting a combined 700 to 800 new stores in the coming years.
One operator aims for 800 outlets by the end of 2026, and other coffee brands are also rapidly extending their footprints.
Apparel retailers add further demand; a leading fast‑fashion brand remains a major traffic generator in malls, and global names such as Levi’s, Lacoste and Gap continue to open new locations, while local brands show slower growth.
International brands are focusing expansion on provincial cities where disposable incomes rise but organized retail space is limited.
Key provincial markets identified include Davao, Pampanga, Iloilo and Bacolod, buoyed by business process outsourcing employment and remittance inflows.
Developers seeking to attract global tenants are advised to collaborate with major franchise operators and design larger units with double‑height frontages to meet international specifications.
