After two years of extensive renovations at key locations like Glorietta, Greenbelt, TriNoma, and Ayala Center Cebu, Ayala Land is transitioning from construction to transformation. The "merchant replacement phase" is underway, where the company is focusing on refining the retail experience and adjusting its tenant mix to align with the refreshed physical spaces.
“Physical renovations are complete. Now, it's about introducing concepts that complement the new settings,” noted Mariana Beatriz Zobel de Ayala, senior vice president of Ayala Land and head of leasing and hospitality, during the company's H1 2026 briefing on August 10.
Progress on Renovated Malls
Glorietta’s renovation has largely reached completion, responding to a previous major overhaul in 2012. The revamped layout showcases updated cinemas and stylish decor enhancements, highlighted by the introduction of a pedestrian park that replaces the former car mall entrance. Some areas, like the food court, are still in the works. This pedestrian-centric design reflects a broader trend in urban shopping where customer pathways prioritize foot traffic, subsequently enhancing the shopping experience.
Zobel de Ayala emphasized that these updates aim for a more intuitive navigation experience, something that’s long awaited by shoppers familiar with Glorietta's previously labyrinthine layout. Malls increasingly serve not just as shopping venues but social hubs where ease of movement can significantly impact customer satisfaction.
With new tenants and concepts coming in, rental rates have surged significantly in sections where changes have already taken place—averaging around 25%. This spike reflects not just the value of the renovated spaces, but also the brand repositioning that accompanies such changes. Meanwhile, at Ayala Center Cebu, which has advanced further than other venues, rental growth stands at roughly 10% year-on-year. It's critical to mention that increases in rental rates can also create tension between tenants and landlords, particularly for small businesses that may struggle with rising costs. Ayala Land's president, Anna Ma. Margarita Dy, anticipates that the full impacts of these renovations may take an additional two to three years to unfold, illustrating a cautious yet optimistic approach to market recovery.
New Offerings and Spaces
Some prominent changes are already noticeable for shoppers. Greenbelt has recently soft-opened approximately 3,000 square meters of Greenbelt 2, with plans for the old Greenbelt townhomes being reimagined into T:28, a concept aimed at nightlife enthusiasts. This expansion reflects a growing recognition among mall operators that entertainment and nightlife can significantly enhance foot traffic and, by extension, retail sales. TriNoma is also expanding its retail offerings, signaling that Ayala Land is intent on diversifying consumer experiences across its properties.
The historic Greenbelt 1, originally designed by renowned architect Leandro Locsin and opened in 1982, is currently under reconstruction, with its redesigned structure slated to debut in 2028. This long timeline showcases not only the complexity of such renovations but also the commitment to maintaining architectural integrity while modernizing space. Collectively, these efforts point towards a more flexible and adaptive mall environment that caters to diverse consumer preferences.
Ayala Land’s strategy includes expanding its retail footprint, with the introduction of both established and new brands. Eye-catching additions include Makro, a Thai wholesale-retail chain at Ayala Malls Arca South; upscale grocery chain Spinneys at Parklinks and San Antonio Plaza Arcade; and the much-anticipated IKEA as a key anchor at Gatewalk in Cebu. These selections not only aim to attract shoppers but also enhance Ayala Land's reputation as a key player in retail development in the Philippines.
The recently opened Ayala Malls Arca South in 2026 represents a mixed-format retail strategy, incorporating various shopping, dining, and social areas. Another significant opening is planned for Nuvali in November, followed by Gatewalk expected in December. These openings suggest that Ayala Land is betting on a multi-dimensional approach to retail, blurring the lines between shopping, dining, and lifestyle spaces.
Consumer Response and Strategic Changes
Early indicators demonstrate a positive consumer response, with same-mall sales experiencing a 7% rise during the first half of 2026, while foot traffic increased by 5%. Notably, premium malls saw traffic grow by 8%, substantially outpacing the 3% rise in core malls. This disparity may indicate a consumer preference shift, where shoppers seek more upscale experiences over traditional formats. It's becoming clear: shoppers are willing to invest more in environments that offer both amenities and aesthetic appeal.
This reinvention is vital for Ayala Land, particularly as its residential sector faces increased challenges. Shopping center revenues hit ₱12 billion in the first half of the year, reflecting a 4% increase year-on-year. When you exclude Alabang Town Center (ATC), which Ayala no longer manages, mall revenues rose by about 9%. This is significant, as it highlights the successful navigation of Ayala Land through a competitive landscape increasingly influenced by e-commerce growth.
Ayala Land divested its stake in Alabang Commercial Center Corporation, the entity overseeing ATC, to the Madrigal family for ₱13.5 billion in December 2025. This divestiture is part of a broader strategy aimed at reallocating capital to ventures with greater growth potential. As capital expenditure on malls surged by 62% to ₱9.2 billion, spending on residential projects fell by 24%. This pivot emphasizes the company's willingness to adapt to market dynamics—investing in retail spaces that align better with consumer demand and shifting economic trends.
Implications and Future Outlook
What this means for you, whether you're a consumer or an industry stakeholder, is that Ayala Land is not just upgrading its malls; it's fundamentally altering consumer expectations of what retail spaces should offer. By focusing on experiences that prioritize convenience, entertainment, and accessibility, Ayala Land is betting big on the idea that malls can still thrive in an age dominated by online shopping.
This transformation strategy reflects broader trends where physical retailers must redefine their roles in the marketplace. Shoppers are increasingly looking for more than just a place to make transactions. They seek environments that cater to social interaction and lifestyle aspirations. If you’re working in this space, understand that these shifts present both challenges and opportunities. The question remains: will these efforts align perfectly with consumer desires over the next few years, or will shifting trends once again prove challenging for traditional retail formats? Only time will tell.
