Manila retail set for stronger 2026 as expansion gathers pace

Demand is expected to grow this year.

Manila’s retail property sector is poised for stronger momentum in 2026, with sustained retailer expansion and improving economic conditions expected to drive leasing activity, according to a report from JLL. The firm projects that foreign brands will continue to scale up their footprint in the Philippine capital, while the food and beverage segment is set to remain a key engine of demand.

JLL notes that rental rates are positioned for firmer growth in 2026 as retail activity gains traction and macroeconomic stability improves. Landlords are expected to maintain pricing discipline, leveraging healthier occupancy levels and stronger tenant demand to support rental performance.

The positive outlook follows a strong end to 2025, when net absorption reached 99,300 sqm in the fourth quarter, driven by holiday-related demand and year-end store openings. JLL attributes much of this activity to the food and beverage sector, which led new store launches amid rising consumer spending.

Supply constraints also played a role in tightening market conditions. JLL reports that no new retail completions were recorded in the fourth quarter, as developers deferred openings to 2026. This delay helped push overall vacancy down to 5.1%, a quarter-on-quarter improvement of 162.2 basis points, supported by active leasing and limited new supply.

Despite heightened activity, rents remained stable at PHP 1,759 per sqm per month in Q4 2025, according to JLL, reflecting a balanced market environment. Meanwhile, capital values increased to PHP 242,892 per sqm, buoyed in part by the Bangko Sentral ng Pilipinas’s December rate cut to 4.50%, which improved financing conditions and supported investor sentiment.

Looking ahead, JLL expects the combination of sustained retailer demand, particularly from international entrants, and a pipeline of delayed supply to shape a more active and competitive retail landscape in Manila throughout 2026.