Invest in online retail, malls told
Amid rising vacancy in retail spaces, a property management and research firm advised mall operators to invest in online shops as a way to “future-proof” their business.
Colliers International said the overall vacancy in Metro Manila, for instance, is seen to rise to 10 percent to 11 percent, following the completion of about 500,000 square meters of additional leasable space this year. However, it is also possible that the vacancy rate may ease to eight percent to nine percent as retailers absorb the new space. Cebu follows similar trend. Based on the 2016 Cebu Property Market report of Pinnacle Real Estate Consulting Services Inc., vacancy rates have reached 12 percent in 2015, but this has eased down to nine percent. As of end-2016, Cebu has a footprint of 1.08 million square meters in commercial and retail spaces.
The increasing role of online shops as alternative to brick and mortar business are opportunities that mall operators can venture into.
“The popularity of online shopping will surge over the medium to long term given the improving access to faster internet and proliferation of smartphones,” said Colliers research manager Joey Roi Bondoc in a statement.
While only one percent of the country’s population uses online retail platforms, the Colliers official said this presents a massive opportunity that developers and retailers could tap. As more Filipinos embrace online shopping, the need for logistics services and warehousing facilities will also surge, it added.
Some of the country’s largest mall operators have already embraced online retail shops by investing in them.
In February, the Ayala Group acquired a 49 percent stake in Zalora Philippines. Colliers said the move should complement Ayala’s traditional mall business.
Meanwhile on March, the SM Group acquired a 34.5 percent stake in the parent firm of 2GO Group, a major integrated transport solutions provider in the country. This will support SM’s interest in its e-commerce business. Last year, the Sy-led mall giant partnered with the local unit of Lazada to capture a greater fraction of Filipino online shoppers.
Stores Specialists Inc. (SSI), the company behind Rustans and exclusive Philippine franchisee of foreign brands like Gucci, Kate Spade, Estee Lauder among others, is also ramping up its online presence with the launch of an online shopping site for Lacoste, relaunch of Beauty Bar’s online platform, and expansion of online shopping sites ssilife.com.ph and payless.ph.
“Credit card penetration in the Philippines remains low at 11 percent, but the huge opportunity for online retailers lies in the growing popularity of debit cards and mobile wallets,” noted Colliers.