Philippine Retail Redevelopment Reshapes City Landscapes

Metro Manila mall vacancy fell to 13.1 percent in the first quarter of 2025, down from 15.1 percent the previous quarter and the lowest level since early 2021. That single number signals more than a recovery — it marks the beginning of a physical transformation of Philippine retail space that is already reshaping city landscapes from Taguig to Cebu, from Bacolod to Pampanga.

Developers delivered over 250,000 square meters of new retail space in the past three quarters alone — including the SM Mall of Asia expansion, One Ayala, and Gateway Mall 2 — with another 270,000 square meters forecast for completion this year. These are not isolated projects. SM Supermalls is undertaking a P150-billion investment program targeting double-digit annual growth over five years, launching one flagship mall each year from 2026 to 2030, constructing 12 new lifestyle malls, and redeveloping 16 existing properties. Ayala Land committed P13 billion to redevelop its flagship malls Glorietta, Greenbelt, TriNoma, and Ayala Center Cebu, then added another P4.5 billion for four more: Abreeza, Cloverleaf, Fairview Terraces, and MarQuee Mall. The shift from pandemic-era caution to large-scale construction is not gradual — it is already reshaping how Filipinos experience urban retail, and the effects extend far beyond the mall entrance.

Three Kinds of Retail Transformation Underway

Each type of redevelopment affects a city differently. Mega-redevelopments alter the center of gravity of established commercial districts — shoppers who remember the old SM Megamall layout will find a fundamentally different building when construction completes. New flagship malls in provincial cities like Ayala’s Nuvali and SM’s Cebu and Davao expansions draw retail anchors away from traditional downtowns, creating new commercial nodes. And the lifestyle pivot changes what a mall even is: a place to eat, work out, watch a film, and spend an afternoon rather than a place to buy things and leave.

What Is Driving the Multi-Billion Peso Bet on Retail Space

Global brands are entering the Philippine market at a pace unseen in years. IKEA, Anko, Nitori, and Flying Tiger have all taken large spaces in newly developed or redeveloped malls. Anko, the Australian home and lifestyle brand, has become a major anchor tenant, and Ayala took an equity stake in the brand — a “skin in the game” approach that lets developers control quality and tenant mix rather than simply leasing space. This is a structural shift: developers are no longer passive landlords. According to CBRE Philippines head of transaction management and retail Maam Argos, Ayala Land, Robinsons, and SM Prime Holdings are leading a transformation that prioritizes dwell time over square footage. The goal is to keep consumers in malls longer by giving them reasons to stay — premium dining, wellness centers, luxury cinemas — rather than adding more stores.

Generation Z is a significant force behind this pivot. The same CBRE data shows that young consumers are spending a substantial share of disposable income on lifestyle experiences — dining, coffee, entertainment — rather than on goods. The shift shows up in leasing patterns: apparel, once the dominant mall category, now accounts for only 26 percent of new openings. Developers are also reducing office space in new mixed-use projects to as low as 5–10 percent, devoting the rest to retail and lifestyle. Real estate investment trusts (REITs) are being propped up by strong retail performance rather than office rentals, reversing the pre-pandemic relationship between the two asset classes.

Metro Manila mall vacancy is expected to return to pre-pandemic levels by the end of 2026, driven by greater absorption and managed retail competition amid slowing inflation. That timeline explains why developers are investing now: they are positioning for a market that will be tighter in two years than it is today. The risk is that the pace of new supply could outstrip demand in the short term, but the data suggests developers are betting that the mix of global brands, lifestyle anchors, and provincial expansion will generate enough foot traffic to fill the space.

What Catches Shoppers and Tenants Off Guard

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Redevelopment on this scale creates disruption that affects both shoppers and tenants. The final 20 percent of TriNoma’s reinvention is described as the most challenging phase, meaning shoppers should expect ongoing construction noise, redirected walkways, and temporary closures of familiar entrances for months. Tenants face relocation during redevelopment — some to temporary spaces, others returning after construction completes — which can interrupt established customer traffic patterns. Smaller retailers that cannot afford the rent increases that often follow a major renovation may find themselves unable to return to the upgraded mall, leading to a shift in tenant mix toward higher-end and national brands.

Parking is another pinch point. SM Megamall’s plan for a four-level basement parking system addresses a long-standing complaint, but during construction, parking availability will be reduced. The same is true for every redevelopment project that reconfigures its parking footprint. For shoppers who drive, the calculus of visiting a mall under renovation includes not just the inconvenience of construction but the real possibility of spending 20 minutes circling for a slot.

Outside Metro Manila, the picture is different but no less complicated. Power Plant Malls is set to open in Angeles City and Bacolod by 2027, and SM and Ayala are building new developments in Cebu, Iloilo, and Davao. These projects bring global brands and premium dining to cities that historically had limited options, but they also compete with established local commercial districts. A new SM mall in a provincial city can draw foot traffic away from the old downtown, shifting property values and business activity in ways that benefit some stakeholders and hurt others. The challenge of selling property in areas that lose commercial momentum is a real concern for homeowners and small business owners alike.

How Different Readers Should Navigate the Retail Transformation

If You Are a Shopper: Adjust Your Expectations and Timing

Plan mall visits around construction schedules. TriNoma and Ayala Center Cebu are expected to complete their reinvention by the end of the year, meaning the disruption is finite. For SM Megamall, the phased approach means some sections will be finished while others are under construction through 2029. Check mall directories online before heading out — entrances, parking access, and tenant locations change during redevelopment. The payoff is significant: Megamall’s Crystal Islands concept will add 20,000 square meters of new leasable space, state-of-the-art cinemas, and redesigned food courts that will substantially change the shopping experience.

If You Are an Investor: Look Beyond the Big Names

REITs with strong retail exposure are outperforming those tied to office rentals, a trend that is likely to continue as developers reduce office allocations to 5–10 percent in new projects. The retail redevelopment wave creates opportunities in construction-related sectors and in provincial real estate markets where new malls are anchoring commercial growth. SM Supermalls operates 88 malls nationwide and hosts thousands of local and international brands weekly — the scale of its investment program means the company is betting its own capital on the continued strength of physical retail. For individual investors, the opportunities in provincial real estate near planned mall developments deserve attention, particularly in Rizal, Cavite, and Pampanga where new lifestyle malls are being built.

If You Are a Retailer or Restaurant Operator: Secure Your Position Early

Food and beverage will continue to dominate leasing for at least the next 12 months, according to Colliers. For restaurant operators, this is the window to negotiate favorable terms before vacancy tightens further. Developers are increasingly selective about tenant mix — they want brands that drive dwell time, not just transactions. The pivot toward homegrown concepts, as seen with The Bistro Group’s Siklab+ brand, suggests that local operators with authentic concepts and strong operational discipline have an edge. For retailers in other categories, the shrinking share of non-F&B space means competition for leases will intensify. If you are a tenant in a mall scheduled for redevelopment, engage early with management about your return plan — temporary relocation can disrupt business for years if not managed carefully.

Frequently Asked Questions

If this was useful, you might also want to read how new live-work-play hubs are rising across the Philippines.

Sources

AyalaLand Premier Nuvali: Is It Worth the Hype and the Price Tag? — RichestPH article on Ayala’s flagship development, relevant to understanding the broader context of Ayala’s retail expansion strategy.

New brands, bigger malls revive retail. Manila Standard, 2025.

Steven Tan steers SM malls’ expansion, innovation era. Tribune, 2025.

Retail Titans Launch Multi-Billion Overhaul as TBG Continues Expansion. BusinessMirror, 2026.

Ayala Group ramping up mall redevelopment. Philstar, 2025.

SM Supermalls’ Bold New Era: All For You. SM Supermalls, 2025.