Freed from COVID restrictions, malls have recovered

THE YEAR 2023 was the first year since the lockdowns of 2020 when businesses in the Philippines were free from pandemicrelated restrictions. These included limited operating hours, limited occupancy, and, for some businesses deemed nonessential in the very early days of the pandemic, closure.

In that period, malls treaded carefully. Quarantine passes, and later, vaccine cards had to be presented at doors, and only a limited number of shoppers could be accommodated at one time, forming long lines, or else the businesses had to completely turn away potential customers.

BusinessWorld asked for insights of two of the largest mall operators in the country on their first year of restriction-free operations. Ayala Malls — under Ayala Land, Inc., which is itself under the larger Ayala Corp. umbrella (which has interests in banking, telecommunications, energy; among others) — operates more than 30 malls across the country, including several in the National Capital Region, reaching across to the Visayas and Mindanao with several more properties. Robinsons Malls, meanwhile, is the second-largest mall operator, with over 50 malls in the country. It has properties as far up the northern region with Robinsons Place La Union, all the way down to Mindanao’s Iligan. Robinsons Malls is one of the business units of Robinsons Land Corp. (RLC), itself under JG Summit Holdings, Inc.

According to Robinsons Malls website, its establishments generate over 120 million visits annually. Meanwhile, Ayala Land’s annual report for 2022 says that “footfall and tenant sales exceeded pre-COVID levels, reaching 108% and 110%, respectively” in Q4 in 2022. “This significant improvement brought the average footfall and tenant sales to 87% of 2019 levels,” said the report. For this year, Clavel Tongco (Head of Operations, Ayala Malls), Mark Sablan (Head of Leasing, Ayala Malls), Lisa Yang (Marketing Director, Ayala Malls), told BusinessWorld in a joint e-mail, “We are pleased to confirm that we have successfully recovered to pre-pandemic levels in terms of foot traffic and sales.

“Our malls are once again bustling with activity, and we are delighted to witness a resurgence in people returning to the malls for their shopping needs,” they said. “This positive trend indicates a renewed confidence among our patrons, reflecting their eagerness to engage in the vibrant and diverse retail experiences our malls offer.”

Meanwhile, Robinsons Land’s annual report for 2022 says that their footfall and occupancy rates are nearing pre-pandemic levels. For 2023, Joel S. Lumanlan, Robinsons Malls Vice-President for Operations, Marketing, and Business Development told BusinessWorld, “Robinsons Malls’ rental revenues experienced a 32% increase, propelled by strong consumer spending and the normalization of business operations nationwide.” That figure is 6% above pre-pandemic levels.

BIGGER, BETTER?

Because malls had to adjust to less foot traffic during the pandemic, a possible scar would be smaller spaces for fewer people. But because of a post-pandemic surge in business, that may not have to be the case.

According to its 2022 Annual Report, Ayala Malls completed 7,000 sqm of gross leasable area (GLA) in 2022 with the opening of The Shops at Ayala Triangle. As of 2022’s end, their total GLA was 2.1 million sqm. “Bigger is still better when it comes to building mall space,” they told BusinessWorld. “A larger mall space allows us to offer a wider array of retail options, dining experiences, entertainment facilities, and community spaces, thereby enhancing the overall shopping experience for our patrons.