From revenge spending in the aftermath of the pandemic that saw a robust recovery in the retail industry, the mall business is now being fueled by retail therapy or a desire among shoppers to feel good.

SM Supermalls president Steven Tan said SM malls have surpassed the year’s sales target as foot traffic remained high.

Bacoor, Baguio, Cebu, Dasmariñas, Fairview, Grand Central, Mall of Asia, Megamall, North Edsa and Santa Rosa SM shopping hubs have exceeded their targets for 2024.

Sales have never been better, according to Tan.

With the unprecedented revenue growth this year, three new malls are opening next year.

Tan said malls will open in Laoag, La Union and Zamboanga next year to ride on the positive momentum in the retail industry.

“We have three malls opening for sure next year. That would be Laoag, La Union and Zamboanga, our second mall in the area,” Tan said.

“This time, it’s a much bigger development. The first one, SM Mindoro, was a smaller mall that we renovated. This new mall in Zamboanga is built from the ground up, making it a significant project.”

Other malls are being redesigned to bring in the

“Mall of Asia is already at the tail end [of redevelopment], and we will be launching the Sky Park. Megamall is being redeveloped with a garden on top, and Aura’s beautiful new food hall is already open,” Tan detailed. 

He added that other projects, such as the redevelopment of SM City Clark, are part of the company’s extensive plans.

“If I count, it’s more than 10 projects next year just on renovation and redevelopment.”

Sales top dog

According to Regina Capital Development Corp., the mall leasing segment is still “killing it as the top dog in SMPH’s revenue mix, generating P19.3 billion in the second quarter, or a nine percent increase from a year earlier. SMPH now spans 86 malls in the Philippines and eight in China, totaling 10.9 million square meters of ground floor area, an improvement from 10.5 million sqm a year ago.

The expansion was mainly due to the company’s recent additions, SM City Yangzhou and SM City Caloocan, which opened their doors in the second half of 2023 and the first half of 2024, respectively.

These two recent openings are already paying off and are making their mark in the latest report as mallgoers splurge in retail.

Flagship firm SM Prime Holdings Inc. posted a 16 percent year-on-year growth to P11.6 billion in the second quarter, driven mainly by its mall leasing segment, which continues to show strength, thanks to solid foot traffic and consumer spending.

Revenues also rose by eight percent to P34 billion amid the improved performance across all segments.

The estimate for the full year of 2024 is a 27 percent jump in net income to P51 billion, driven by a booming mall leasing business and improving prospects in the residential game.

With the Bangko Sentral ng Pilipinas cutting benchmark rates by 25 basis points for the first time in four years, homebuyers might start having the urge to purchase real estate assets again. Lower borrowing costs should bring mortgage rates down, making home ownership more affordable.