Metro Manila’s retail space vacancy rate is expected to remain at 15% until yearend, according to property services firm Colliers International (Philippines), Inc. Colliers Philippines director for Research and Consultancy Richard Raymundo said in an interview yesterday that Metro Manila is already saturated with malls. 

Amid intensifying competition, Ayala Land, Inc. (ALI), the country’s largest property developer, and SM Prime Holdings, Inc. are now expanding in niche locations. ‘If you look at vacancy rate of SM and ALI, their vacancy rate is less than 10%.

Metro Manila is already saturated. Property firms are either expanding outside Metro Manila or on niche locations such as the San Lazaro, where SM is, or ALI’s Tri Noma [Triangle North of Manila],’ Mr. Raymundo noted. 

Mr. Raymundo said stock of retail space ‘marginally increased’ in the third quarter to 4.32 million square meters with the completion of SM Supercenter in Pasig. A supercenter is a new format that the Sy-led company will roll out in smaller municipalities, SM Prime President Hans Sy said earlier.

Mr. Raymundo also noted rents in Ayala Center softened by nearly 1% quarter on quarter at an average of P1,176 per square meter per month.

In Ortigas, rents were unchanged at P935/sq.m./mo. He sees rent rising by 5% by yearend.  In its quarterly research report, Colliers Philippines also said developers are now focused on peripheral locations like Fort Bonifacio and Eastwood City amid a construction lull in the Makati central business district (CBD).

‘There is no office development under construction within the Makati CBD. The stock of office accomodation in the CBD is expected to remain at 2.65 million square meters,’ it said.  Colliers Philippines expects rates to breach P1,000 by late 2007, and rent escalation at 20% next year.

The premium grade segment rose by nearly 4% quarter on quarter to average P798/sq.m./mo.  Colliers said Makati CBD should ‘remain at a premium’ compared to Fort Bonifacio due to its critical mass.