The Philippine retail sector is undergoing a massive transformation, characterized by a significant geographical shift away from Metro Manila and a strategic pivot toward experiential retail and luxury offerings, according to a recent market analysis from SKF (Santos Knight Frank).
Major developers are aggressively expanding their footprint, concentrating the bulk of new retail development outside Metro Manila. This “shift-to-province” trend is introducing large-scale formats in regional hubs that match the quality and size of the capital’s premier destinations.
The commitment to regional growth is apparent, with a wave of new mall completions in key provincial locations. Upcoming supply reinforces this trend, with projects such as SM City Laoag scheduled for completion by Q2 2025, Ayala Malls Evo City Phase 1 by Q4 2025, and SM City La Union by Q4 2025.
“Retail landscape is experiencing a wave of new mall completions in key provincial locations, with major developers introducing formats that mirror the scale and quality of Metro Manila’s premier retail destinations,” said SKF president Rick Santos underscoring the magnitude of this market restructuring:
The pipeline for 2026 confirms continued expansion, listing key projects like Ayala Malls Arca South Regional Mall, SM Zamboanga Regional Mall, and SM Neo Verde Regional Mall.
Experiential, luxury mix
Accompanying the geographical spread is a fundamental change in mall content.
The retail mix is moving away from traditional merchandise towards categories that are more difficult to digitize, featuring an increasing share of experiential activities, including food and beverages (F&B), fitness and personal care, hobbies and recreational activities
The high-end segment remains another area of growth. While the share of fast-fashion brands is declining, luxury fashion brands continue to enter upscale malls across the country, with new entrants like Alo, Sandro, Maje, The Colorist, Alice + Olivia, and X11 taking up space. The trend is driven by the Filipino consumer’s affinity for lifestyle and global trends.
“More international brands continue to proliferate the retail sector, banking on Filipino’s lifestyle and current trends,” Santos said, adding that the market is expected to build on these developments through 2026.
The forecast for 2026 includes the continued evolution of experiential retail, repurposing of vacant retail spaces into recreational spots, and of co-working spaces to optimize utilization.
A “green agenda” is projected to become a key factor in future mall redevelopments, prioritizing sustainability, SKF noted.
“This dynamic environment, coupled with a robust hospitality sector, particularly with hotel launches from international operators like Accor, Marriott, and Banyan Tree, positions the Philippines for sustained growth, supported further by proposed government initiatives such as tourism tax refunds and visa-free entries,” Santos said.
