RENTAL rates in Manila posted the highest annual in the Asia Pacific in the second quarter of year, driven by foreign brands, according to a real estate services group.
The rent in Manila grew by 7.9 percent at $577 per square meter per annum in April to June, according to Jones Lang Lasalle (JLL). The numbers would translate to about P26,719 per sqm a year.
The increase was driven by the entry and expansion of foreign and local brands in the country’s retail market.
“Local and international brands remain interested in entering or expanding in Manila,” JLL noted in a report.
Among the foreign brands that opened their first stores in the second quarter are American restaurant Texas Roadhouse at Uptown Mall, Singaporean brand Pezzo Pizza (Robinson’s Place Manila), and Canadian apparel brand Joe Fresh (Shangri-La Plaza).
“Notable expansions during the quarter were Baskin Robbins, Ippudo Ramen, Estee Lauder, Bobbi Brown and Kipling,” JLL said.
Quarter-on-quarter, retail rent in the Philippines rose by 2.0 percent.
“Of the 18 featured markets, only two (Auckland and Manila) saw a quarterly rental increase of 1 percent or more for the most expensive locations, while the remainder mostly recorded flat rents,” JLL said.
Several retail markets in the region saw a decline in rent during the quarter, including Shanghai (-2.1 percent), Singapore (-0.6 percent), and Bangkok (-0.1 percent).
JLL is forecasting a slower growth in rent, particularly in China.
“Demand in China’s Tier 1 markets should continue to be driven by experience-oriented tenants such as F&B and brands targeting children. However, fast fashion may be nearing a saturation point in some markets and this could lead to slower growth going forward,” the report read.
Despite the decline in a number of markets, JLL noted the aggregate Asia Pacific Retail Rental Index increased by 0.3 percent quarter-on-quarter.