SM Supermalls Shifts Tenant Mix to 30 Percent Dining as First-Half Revenue Reaches P41.8B

SM Supermalls raised its food and beverage tenant share to 30 percent while lifting first-half revenue 8 percent to 41.8 billion Philippine pesos. The shift marks a fundamental redesign of floor plans across the country’s largest retail network.

Dining accounted for less than 5 percent of the group’s leasable space when current president Steven Tan joined in 2004. The operator is now reallocating square meters from apparel and standard department store goods to dining, sports, and live events under a five-year platform called My SM.

Retrofitting Floor Space for Food and Sports

Expanding dining requires heavier investments in physical infrastructure than dry retail. Malls require upgraded water connections, higher-capacity electrical systems, grease traps, and expanded kitchen exhaust ducts to handle restaurant tenants at scale.

Alongside dining, the landlord is adding non-retail recreation to fill communal areas. The group added 41 pickleball courts during the first six months of the year, taking its total to 102 courts across 32 properties. In June, its commercial complex cohosted the Galaxy Manila Marathon, bringing 25,000 runners onto the grounds.

Internal merchandising direction now runs partly through an internal advisory unit. The operator created a Gen Z Council of junior staff to evaluate pop-culture trends, such as pop-up matcha fairs, before senior managers commit capital to physical rollouts.

You have to constantly inject freshness to your centers so that you keep the interest in coming back.

Regional Realignment from Shelves to Social Space

Mall operators across Southeast Asia face identical pressures as e-commerce captures routine apparel and consumer electronics purchases. Landlords in Bangkok, Jakarta, and Manila are converting between 25 and 35 percent of gross leasable area to food and leisure to defend foot traffic. SM watched Chinese shopping centers retrofit for hospitality a decade ago and applied the template locally before domestic online shopping reached similar penetration levels.

The operational risk sits in capital expenditure and lease yields. Restaurants and recreational concepts cost more to fit out, consume more utilities, and post higher tenant turnover rates than legacy fashion retailers. Operators must turn over pop-up concepts and specialty dining fast enough to sustain foot traffic without squeezing margins on rental collection.

Expanding the Footprint Across South Luzon

Revenue growth reflects solid consumer spending despite inflationary pressures across basic goods. The 41.8 billion pesos generated in the first half of 2026 improved on 38.6 billion pesos recorded during the same period in 2025, driven by steady leasing income and higher foot traffic across metropolitan centers.

Construction is underway on SM Nuvali in Laguna, which will serve as the company’s 91st Philippine mall. The property will test an upscale store format aimed at higher-income residential enclaves across Cavite, Laguna, Batangas, Rizal, and Quezon.