Retail rents in the Philippines remained firm in the second quarter as global retailers, led by coffee and fast fashion brands, stepped up expansion into provincial markets despite softness in other real estate segments, according to CBRE Philippines.

In its second-quarter Market Monitor, CBRE Philippines said retail was the only real estate segment that maintained rental levels during the period. Demand for prime retail space stayed strong, supported by consumer spending and P35.6 billion in overseas Filipino worker remittances.

“One of the most dynamic industries that’s happening right now… retail and consumer properties are currently the most reliable,” Maam Argos, head of retail and transaction management at CBRE Philippines, said at a media briefing last week.

Among the high-street retail districts monitored by CBRE, Makati recorded the biggest rental increase at 9%, followed by Alabang with a 3% gain. Monthly rents ranged from P800 to P2,800 per square meter in Makati and from P800 to P1,100 per square meter in Alabang.

Rental rates in Fort Bonifacio, Quezon City, and the Bay Area were unchanged during the quarter. Ortigas and Cebu, meanwhile, posted declines of 2% and 20%, respectively, showing that demand remained uneven across major retail districts even as the broader segment held up.

CBRE said the retail sector’s resilience was driven by continued expansion among international retailers. Food and beverage operators accounted for eight out of every 10 new market entrants, underscoring the role of restaurant and beverage concepts in supporting demand for retail space.

Coffee chains have become one of the largest growth drivers, with major brands planning a combined 700 to 800 new stores. Pickup Coffee, operated by Starbreaker Corp., is aiming to reach 800 stores by the end of 2026, while ZUS Coffee and Tomoro Coffee are also rapidly expanding their footprints.

Outside food and beverage, apparel retailers continued to generate demand for retail space. Fast Retailing Philippines, Inc.’s Uniqlo remains a major traffic driver in shopping malls, while international brands including Levi’s, Lacoste, and Gap continue to expand. In contrast, local brands such as Penshoppe and Suyen Corp.’s Bench have posted flat or slower growth.

Ms. Argos said international brands are leading large-scale expansion as they enter provincial markets where disposable incomes are increasing but organized retail supply remains limited. For mall owners and developers outside Metro Manila, that makes tenant mix and store-format readiness more important as global brands often require larger, more standardized spaces than smaller local retailers.

She identified Davao, Pampanga, Iloilo, and Bacolod as key expansion markets, supported by business process outsourcing employment and remittance inflows.

To draw more global retailers, CBRE said provincial developers should work closely with major master franchise operators such as Stores Specialists, Inc. and Suyen Corp. It also said developers should design retail spaces with larger unit cuts and double-height frontages to meet the requirements of international tenants.

— Juliana Chloe A. Gonzales