THE PHILIPPINES has slipped by a notch on the list of most expensive retail property locations this world due to lower-than-expected sales volume so far in the year, a global real estate services firm said.
In a report, Cushman and Wakefield said in Metro Manila dropped from the 52nd spot last year. It cited a slowdown in the sales of luxury properties.
“The luxury segment experienced a slowdown as lower-than-expected sales volumes in existing stores led to upscale brands re-evaluating expansion plans,” the report said.
In spite of the slowdown, Cushman and Wakefield noted the Philippine market continues to enjoy the support of international brands.
“International brands continue to drive the Philippine retail sector, supported by the rising disposable income of a growing middle class population,” the report noted.
Global mid-tier brands accounted for a significant volume of leasing activity in recent quarters.
“In particular, fast fashion retailers and F&B operators are leading the growth of the segment as brands such as Uniqlo and H&M continue to aggressively expand their footprints within and outside Metro Manila,” Cushman and Wakefield said.
Growing competition among mall developers has led to the formation of new retail concepts as a way of expanding market share.
“There is also a shift in the tenant mix, where mall operators are increasing the share of F&B in their retail developments,” the report said.
By region, the Asia Pacific retail market has been seeing a cautious 2016.
“Overall, retailers continued to be cautious in their store expansion across the region due to a number of concerns including continued global economic instability, and we see this trend continuing well into 2017, said Cushman and Wakefield Asia Pacific Head of Retail Theodore Knipfing.
Once retailers start expanding, the focus would be on high-performing malls and high streets with strong pedestrian traffic, Knipfing noted.
“All in all, despite the cautious outlook across the region, major international and regional retailers will have to eye overseas growth, as their respective domestic markets reach saturation point and investors demand results,” Knipfing said.
Moreover, Upper 5th Avenue encompassing 49th—60th Streets in New York, USA remains number one on the list of most expensive shopping locations in the world at $3,000 per square feet.
This is followed by Causeway Bay in Hong Kong at $2,878 per square feet and Avenue des Champs Élysée in Paris France at $1,368.
Retail rent in Philippines, particularly Rockwell and Century City in Makati, is at $57 dollars per square feet.