Metro Cebu remains key retail destination in Philippines

CEBU, Philippines — Metro Cebu remains a key retail destination outside Manila as it is the second largest outsourcing hub in the country and is among the major sources of overseas Filipino workers (OFWs), a study revealed.

This development provides developers the opportunity to consider exploring retail demand of developments in townships and build more space in Mandaue City, Global advisory and research firm Colliers International Philippines suggested.

The advisory firm further encouraged developers to differentiate retail offerings, and explore partnerships between national and homegrown firms.

As of end-2018, Metro Cebu’s retail stock reached 1.04 million sq meters (11.2 million sq feet), unchanged from the end of 2017 as no new malls were completed in 2018.

Over the next 12 months, Colliers sees the delivery of about 105,400 sq meters (1.1 million sq feet) of new retail space.

Among the new malls due to be completed in 2019 are Mactan Town Center, CityMall Bacalso, and the expansion of Elizabeth Mall. The latter has been benefitting from its proximity to schools, hotels, and transportation terminals.

Another upcoming mall is Il Corso by Filinvest Land Inc (FLI) which is to be developed within FLI’s City di Mare integrated community in SRP. We see the nearly 40,000 sq meter (430,000 sq feet) mall recording strong take up once completed as Colliers sees retailers banking on demand from residential and office towers being completed within the City di Mare integrated community.

Another major mall due to be completed in 2019 is Central Bloc Mall by Ayala Land. It should offer about 43,000 sq meters (463,000 sq feet) of retail space, the largest to open over the next 12 months. It is planned within the Central Bloc complex in Cebu IT Park. Hence, we see the new mall benefitting from its proximity to a new Seda hotel as well as office towers.

“Other large malls that we see being delivered from 2020 to 2021 are Gatewalk Central and Plaza Magellan malls. The former is likely to be inside the Gatewalk Central township being developed by Ayala Land and AboitizLand in Mandaue, while the latter should be in Megaworld’s Mactan Newtown. Both malls are in integrated communities developed by national players. We see employees and condominium owners driving retail demand in these areas,” the report said.

From 2019 to 2021, Colliers projects the completion of about 259,000 sq metres (2.8 million sq feet) of new retail supply. This should expand Metro Cebu’s stock to 1.3 million sq metres (14 million sq feet) by the end of 2021, about 25% higher from its stock in 2018.

According to the report, the rising purchasing power of households and employees is enticing retailers to occupy more space.