CEBU, Philippines - The increased purchasing power of locals have prompted mall developers to further invest in retail development in Cebu, resulting to an average mall occupancy rate of 98.7 percent, as reported by Colliers International.
The global market report cited the remarkable growth in the retail industry in Cebu similar with the area's residential and office sectors.
Colliers said that last year, mall developers in Cebu City enjoyed the vibrant spending activities and high foot traffic across districts that led to an average mall occupancy rate of 98.7 percent.
It also noted that premium floor rents in Cebu were at reasonable rates that ranged from P500 to P1,200 per square meter every month with an average rate of P780 per square meter, about 30 percent lower compared to rates in Metro Manila.
Colliers then attributed the retail development to the increased spending capacity of the people, availability of large-scale developable land, a high population, a healthy tourism market and a generally strong business environment in Cebu.
"The surge of outsourcing firms has also paved the way for retail hubs to emerge in commercial complexes or through mixed-used developments. The strong spending from the business process outsourcing employees, who have relatively higher disposable income, has contributed in the increase of store sales, thereby pushing developers to proceed with widening their footprints," the report added.
Apart from the BPO industry, the continuous inflow of remittances from overseas Filipino workers fueled the growth in the retail sector.
According to the 2011 report of the National Statistics Office, there were about 148,900 deployed Filipino workers from Central Visayas that posted an annual growth of about 10 percent.
At present, there are over 30 malls on the island which include the newly-completed SM Consolacion and J Centre Mall.
More than half of the total numbers of malls here are housed in Cebu City which serves as the central hub of commercial and business activities.
To date, there are about 16 malls in the city which could be translated to over 600,000 square meters of gross leasable space.
More mall establishments are also in progress as new constructions and expansion plans by major developers are being laid out.
These include large-scale developments by key industry players such as the Ayala Center Cebu extension, Robinsons Galleria and SM Seaside South Road Properties.
Local retail developer Gaisano Group, on the other hand, remains to position itself in markets outside the metropolitan Cebu with its four new mall developments in addition to its five district-level malls.
"Outlook on the growth of the retail industry in Cebu indicates a further long-term increase, as various market sources expand driven by robust economic fundamentals," Colliers concluded. /JMD (FREEMAN)