THE retail sector in Davao City has lagged behind in 2019 due to the series of earthquakes that struck during the last months of last year.
Real estate research and advisory company Prime Philippines noted that Davao City has the lowest occupancy rate at 80 percent in commercial malls as of December 2019 despite its cheaper monthly rental rates.
Prime Philippines Regional Operations head for VisMin Chai Abaya said these sectors include food chains and restaurants.
In its report, 2020 Philippine Real Estate Market Overview, Trends, and Forecast, Davao City's monthly rental rates ranged from P120 to P500 per square meter (sqm).
This is around 11 percent lower than the monthly rental cost of retail spaces in the central business districts (CBDs) in Luzon.
The rental rates of Bonifacio Global City, Makati, Ortigas, Bay Area, and Quezon City pegged at around P850 per sqm to P4,500 per sqm.
Prime Philippines said the low occupancy rate in the retail spaces in the city is due to the preference of the locators to expand in Metro Manila.
Abaya said some locators also find it expensive to move to the city.
"I believe it is still costly for retail stores to move to Davao. You also notice some of the branded shops in Abreeza and SM Lanang are now closed," she said.
According to Prime Philippines' Davao Property Market 2019 Update, "The series of earthquakes have mildly affected the sentiments of retail investors to locate their brands in the city."
Currently, the city has an existing supply of 865,000 sqm retail spaces as of the 2nd quarter of 2019.
The real estate advisory observed "little to no completions finished in 2019" although it has maintained a steady growth.
However, the agency is optimistic that the spaces will increase in 2022.
"More expansions from the major developers are to occur in Davao, as SM Prime Holdings, Cebu Landmasters Inc., and Vista Land are expected to build future projects in the area by 2022," the report said.