Manila retail strengthens as foreign brands expand in 2026

F&B segment remained the key driver of growth.

Manila’s retail sector is expected to gain further momentum in 2026, supported by continued expansion from foreign brands and improving economic conditions that are likely to sustain leasing activity, according to JLL’s Asia Pacific Retail Market Dynamics Report.

The food and beverage (F&B) segment remained the key driver of growth, leading new store openings in the fourth quarter of 2025 and expected to maintain its strong contribution to retail leasing demand in the coming year.

Retail net absorption reached 99,300 sqm during Q4 2025, reflecting robust holiday-driven demand and a wave of year-end store launches as retailers capitalized on peak seasonal spending.

No new retail developments were completed in Q4 2025, as developers deferred planned openings to 2026. This temporary pause in supply contributed to tighter market conditions and supported a decline in vacancy rates.

Overall vacancy improved to 5.1%, down 162.2 basis points quarter-on-quarter, driven by strong leasing activity and the absence of new completions.

Rental rates remained stable at PHP 1,759 per sqm per month, with no movement recorded during the quarter. Meanwhile, capital values rose to PHP 242,892 per sqm, reflecting improved market sentiment and asset pricing strength.

Investor confidence was also supported by the Bangko Sentral ng Pilipinas’ December rate cut to 4.50%, which helped reduce financing costs and further improved the outlook for retail investment activity.