MANILA’S potential for retail growth continues to attract international retail brands, placing it among the world’s growing markets, global real estate consultancy firm Jones Lang Lasalle (JLL) said in a new report.
According to JLL’s Global Cross Border Retailer Attractiveness Index 2016, Manila is classified as a ‘growth retail city,’ ranking 29th on the list of the top 50 attractive cities for retail.
Growth cities are those that have displayed significant growth in the retail sector, JLL explained.
“Strong retail sales growth is driven by an expanding population, rapidly rising middle classes and fast track urbanization,” JLL said.
Apart from Manila, some of the other cities that are classified as growth retail cities are Dubai, Kuwait City, Riyadh, Jeddah and Abu Dhabi in the Middle East; Shanghai, Beijing and Bangkok in Asia; and Moscow in Europe.
JLL explained that growth cities present generally high levels of shopping center development.
In a separate report by the real estate firm, it noted that a high volume of retail supply is expected to come online in the Philippine property market in the second half of the year, with the projected completion of 395,300 square meters of retail space.
“From 2017 to 2019, around 570,000 square meters of retail space is expected to be added to the current stock,” JLL said.
Aside from the Growth Retail Cities category, the global retail attractiveness index also classified other cities as Global Retail Cities and Mature Retail Cities.
Global Retail Cities are established markets with the greatest appeal to international retailers, and are generally the first ports of call for retailers seeking international expansion into their respective regions, according to JLL.
Among cities under this category are London, Hong Kong, and Paris, which grabbed the top 3 ranks in the global retail attractiveness index.
“The real estate market is generally characterized by high levels of market transparency, and the premier retail areas attract significant levels of retail spend from a diverse and strong international customer base,” JLL said.
In contrast, Mature Retail Cities are well-developed cities that international retailers are eyeing to expand to, beyond the Global Retail Cities.
“These are established markets, with strong domestic sales and domestic brands, stable growth outlooks and an affluent consumer base. The real estate market is transparent and legislation is often favorable towards international retail brands,” the real estate services firm said.
Some of the cities classified under this category are Miami, Boston, Toronto, and Honolulu in North America, Sydney, and Melbourne in the Asia Pacific region and Barcelona, Amsterdam, Hamburg, and Frankfurt in Europe.
Moreover, JLL noted that demand for the “right physical space in the right place is strong”, as international retailers are focused on balancing their global store portfolios across the globe.
“The global retail landscape is diverse, highly dynamic and each city offers unique opportunities for international retailers,” JLL said. “Retailers who succeed in acquiring the right space in the right place and at the right time will benefit from successful, profitable growth.”
JLL emphasized that there are still a lot of areas across the world that remain “untapped” by international retailers.
“We expect that the search for growth, in what has become an increasingly international retail market place, will accelerate international brand presence across the world’s best retail locations,” JLL said.
At present, JLL noted that London features the largest presence of international brands. This is followed by other global retail cities such as Hong Kong, Paris, New York, and Dubai.
However, JLL noted that this could change in the coming years.
“We expect the global landscape to change dramatically over the next five to ten years as retailers tap into the global opportunity for growth across a broad range of global cities,” JLL concluded.