BY DARWIN G. AMOJELAR SENIOR REPORTER
[ manilatimes.net ] June 27, 2011
RENTAL rates in Metro Manila malls are expected to rise in the next 12 months on strong consumer confidence, according to a property research firm.
In its latest Philippine market overview, Colliers International said rental rates in Metro Manila malls are projected to rise as high as 5 percent over the next 12 months because of increasing consumer confidence.
The Bangko Sentral ng Pilipinas earlier reported that overall consumer confidence was broadly steady in the second quarter, with the confidence index decreasing slightly to -24.1 percent from -23.1 percent in first quarter.
Colliers said volume sales on products such as apparel and electronics are expected to improve, leading to the increase in effective rents.
In the first quarter, rental rates in the Makati Central Business District, particularly in Ayala Center, increased by 0.9 percent from the previous quarter to P1,180 per square meter.
In the Ortigas CBD, rental rates increased by 0.5 percent to P1,055 per sq m.
Colliers said occupancy rates were high at the 99 percent level across super regional and regional malls.
The vacancy rate is lower across super regional malls at 0.4 percent or at a range of 600 to 800 sq m.
Regional malls had higher vacancies at 0.8 percent rate, or 700 to 900 sq m.
“With most of these mall-types located in major CBDs, vacated stores are expected to be easily replaced by new tenants pushing vacancy rates to be at a long-term low,” Colliers said.
In addition, heavy foot traffic strengthened occupancy as the result of the expansion of international brands, and the emergence of varied products and services offerings, the consultancy firm said.
By yearend, Colliers said additional stock of 108,000 sq m is anticipated, as the construction of the Lucky China Town Mall in Binondo, Manila is set to complete.
The research firm said mall operators are also expanding outside Metro Manila.
These are Robinson’s Place Palawan, SM City Masinag and SM City Olongapo. Ayala Land Inc. announced its planned expansion in Cavite, Cebu and Bacolod.
“Apart from regional expansion, a trend in retail development for the medium term is imminent in small–scale community malls, which function as the support component for the BPO offices and residential communities,” Colliers said.
A few district-to-regional-sized malls are expected to rise on the fringes of Metro Manila, the firm said.
“Simultaneously, retail activities are also geared towards the retrofitting and expansion of the existing malls,” it said.
Colliers said land values are still inching up, albeit at a slower pace than in the fourth quarter of 2010.
With the current planned developments in the traditional business districts, the research firm said land values are expected to grow at an average of 3 percent to 5 percent.
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