RECOGNIZING Bacolod City as a major retail hub in the Visayas, a global real property service company said food and beverage (F&B) along with foreign clothing brands continue to drive occupancy in retail space especially among new malls here.
Colliers International Philippines Monday, May 20, reported that as of 2018, Bacolod City’s retail stock reached nearly 410,000 square meters or 4.4 million square feet. This is 28 percent higher compared to the city’s stock in 2017.
In 2018, the new malls included Ayala Malls Capitol Central in Bacolod City and the Gaisano Group’s Grand Mall in Silay City.
At present, there is only one “super regional mall” in the city, SM City Bacolod, offering about 107,000 square meters or 1.15 million square feet of leasable space.
Its report showed that smaller district and neighborhood malls owned and operated by local developers account for more than 50 percent of the city’s leasable space.
Among these malls are the Lopue’s Malls, 888 Chinatown Square, Mayfair Plaza, and Bargain Square Malls found along Lacson, San Sebastian, Araneta, and Gatuslao Streets.
But national developers are starting to respond to rising retail demand especially with the development of new townships by Ayala Land Inc. and Megaworld Corp., it added.
“We encourage mall developers to improve tenancy in new malls by bringing in more foreign F&B, clothing and footwear brands,” Colliers said, adding that they should also explore parcels of land around the periphery of the city viable for smaller retail outlets such as in Murcia and Talisay City.
In 2019, the firm said they do not see any supply being delivered yet.
Though, Megaworld’s Northill Town Center within its Northill Gateway Township, which is about 74,000 square meters or 797,000 square feet, is due for completion in 2020.
By 2021, Colliers projects the city’s retail stock to reach 484,400 square meters or 5.2 million square feet, 18 percent higher from the city’s stock last year.
In terms of retail space absorption, the company recorded a marginal rise in vacancy in 2018. From 2.3 percent in 2017, the city's retail vacancy rose to 3.6 percent last year.
“We attribute this to the increase in vacancy of a number of neighborhood malls. A couple of malls are still scrambling to attract retailers,” it said, believing that the increase in vacancy in 2018 is minimal despite the completion of nearly 90,000 square meters or 969,000 square feet of new space.
In 2018, among the malls that recorded occupancies of between 96 to 100 percent are the Lopues Malls, VSB Mall, 888 Chinatown and Premiere Mall, CityMall Goldenfield, Hi-Strip, Negros First Cyber Centre and SM City Bacolod.
From 2019 to 2021, the city’s vacancy is expected to register at an average of 2.8 percent per year as there is an increased occupancy in a number of neighborhood malls.
Colliers also projects a greater absorption of retail space among the recently-completed projects like Ayala Malls Capitol Central and Gaisano Grand Mall over the next 12 months.
It recognizes that Megaworld’s upcoming mall will record strong occupancy as it is within an integrated community that should serve the retail needs of offices and residential units within the township and nearby villages.
Much of the new space delivered by Ayala Malls Capitol Central and Gaisano Grand Mall was taken up by a mix of local and foreign F&B, footwear and clothing shops, the firm said.
Among these retailers are Coffee Bean and Tea Leaf, Mangan, Ikkoryu Fukuoka Ramen, Nanyang, Chowking and Jollibee.
“The F&B segment remains dominant representing about 45 percent of new space completed in 2018,” Colliers said, adding that such dominance will continue over the next two to three years.