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Published on: 4/11/2007
Last Visited: 4/12/2007
Mall vacancies in metro Manila, made up of the capital and its neighboring cities and towns, will probably reach 15 percent this year as the region is expected to add 10 to 15 percent more retail space, said Rex Drilon, chief operating officer of Ortigas & Co.
"When there's plenty of supply don't expect rates to go up," said Drilon, who runs Manila-based Greenhills Shopping Center, which is popular with bargain-hunters."It will be imprudent to increase when there is a lot of supply coming in.
"Philippine mall operators are on a building spree, betting rising inflows from Filipinos working overseas and declining interest rates will boost consumer spending.This year's expansion will increase retail space in metro Manila to about 5 million square meters (53.8 million square feet) from 4.5 million square meters in 2006, Drilon said.
"We favor a moratorium in building new malls because it's the retailers who are really paying for the cost of this build-up," Drilon said."Retailers are essentially paying for the same pie that isn't growing very much."Drilon said vacancies in metro Manila's shopping malls reached 12 percent last year, compared with a peak of 19 percent in 2002.
Although rentals rose about 3 percent to 5 percent in 2006, the rates "haven't really moved up in the past four years" because of the new retail space being added, he said.