Colliers International Philippines, a real estate consultancy company, expects mall vacancy to rise to 12 percent in 2020 from 9.8 percent in 2019 on reduced consumer traffic and increased preference for online shopping amid the coronovirus (COVID-19) pandemic.
Colliers Philippines said even if the government fully relaxed the lockdown imposed throughout Metro Manila, the implementation of physical distancing protocols would likely reduce consumer traffic in shopping malls.
The health protocols will likely lead to a slower absorption of retail space across Metro Manila. Colliers also expects a significant number of physical retail shops to remain closed for an extended period due to COVID-19.
Colliers Philippines sees more retailers creating their own e-commerce websites, using the sites of major mall operators, or popular social media platforms such as Facebook and Instagram to expand the reach of their products.
“By expanding online strategies and partnering with apps to facilitate seamless delivery, retailers should be able to offset any softer retail demand due to the COVID-19 pandemic and the government’s implementation of a lockdown,” Colliers Philippines said.
For retailers of high-end brands, Colliers Philippines said they should be more innovative to stay at the top of consumers’ minds, including offering home deliveries or personal shoppers.
It cited data from the Philippine Payments Management Inc., which showed that e-payment transactions during the lockdown month of April reached P53 billion, or an average of P6,130 per transaction.
Some 8.9 million InstaPay transfers in April were recorded, up 32.2 percent from 6.7 million transactions in March 4.
“This indicates the growth of online shopping during the period,” Colliers Philippines said.
In a survey conducted by Collier Philippines covering March 17 to 30, 2020, more than 80 percent of over 100 respondents from Luzon and Visayas regions still chose brick-and-mortar retail, indicating a possible pent up demand after the lockdown ends.
Colliers Philippines, however, believes most respondents did not factor in the extent of the pandemic and the potential impact on consumers’ mobility.