How Brands Can Leverage Underutilized Spaces for a New Era of Retail and Community Engagement

Philip Peckson, an astute observer of urban development in Metro Manila, highlighted a fascinating trend: Makati’s aging real estate is no longer a liability, but an opportunity. For decades, the city’s older office buildings sat largely underutilized, locked in traditional, single-use zoning. But as the landscape evolves, these spaces are now becoming prime locations for brands—both digital-native and legacy—to experiment with new retail concepts. Read more below.

As Philip observed, it’s a shift that reflects a deeper, global movement toward multifunctional, experience-driven spaces. In this article, we explore how brands can take advantage of this changing landscape to not just sell products, but to build destinations for community engagement.

1. The Economic and Real Estate Context: A Changing Landscape

The heart of the opportunity lies in Metro Manila’s evolving real estate market, particularly in areas like Makati, where a convergence of affordability, flexibility, and changing landlord attitudes is opening doors for brands. In the past, the real estate landscape was dominated by high-rent areas like BGC, which catered to banks and global corporations. However, the emergence of older office buildings in Makati has introduced a compelling opportunity for entrepreneurs and brands to rethink retail spaces.

Key Economic Shifts:

Lower Rent: Older buildings in Makati offer lower rental prices compared to newer developments. This makes these spaces an attractive option for brands looking to create innovative retail spaces without the high overhead costs of prime, street-level locations. For example, rental rates in Makati’s older office buildings can be up to 50% lower than BGC, allowing entrepreneurs to reallocate those savings into creating richer, more engaging experiences.
Shifting Landlord Attitudes: Landlords who once adhered strictly to traditional office tenants are increasingly open to mixed-use spaces. Where once the only tenants allowed were banks and financial institutions, the trend now is toward more flexible spaces that blend retail, office, and community engagement.
Foot Traffic Shifts: As foot traffic patterns evolve, there is a growing desire for destination spaces—places that draw visitors not just by chance, but with compelling experiences. This shift presents a unique chance for brands to tap into a community that is increasingly looking for more than just transactional retail experiences.

By tapping into these underutilized spaces, brands can reduce costs while gaining access to prime locations, all while contributing to the cultural and economic revitalization of these older buildings.

2. Who Should Consider This Opportunity?

While this trend is especially advantageous for digital-native brands, it’s also an appealing model for legacy brands looking to innovate. Both can take advantage of these flexible spaces to create immersive experiences that resonate with their communities. But who exactly should consider making the shift?

Digital-First Brands:

Brands that have built their foundation online can leverage these spaces to seamlessly integrate digital and physical experiences. Whether it’s through click-and-collect services, pop-up events, or interactive installations, digital-first brands can drive their online traffic to physical locations, transforming them from simple stores into community hubs.

For example, a fashion brand that is heavily invested in social media marketing could host exclusive events in these spaces to foster deeper connections with their digital community. With the lower costs and flexibility, these brands can design environments where online fans can experience the brand in new and exciting ways—without the steep costs of traditional retail.

Legacy Brands:

Older, established brands may find that creating a destination space can help them reconnect with younger, tech-savvy audiences. These brands can take advantage of these emerging spaces to revitalize their in-store experience while offering consumers an interactive, community-focused experience that moves beyond traditional shopping. By creating a flexible, multifunctional space, legacy brands can engage customers in a more meaningful way and foster brand loyalty that transcends mere transactions.

3. How to Make It Happen: Key Considerations for Success

Building a destination retail space isn’t just about opening a store—it’s about creating an environment that enhances the brand experience. Here’s how brands can approach it:

Designing for Experience:

The key to success is multifunctionality. Brands need to avoid cluttering their space with too many functions that detract from the primary goal of engagement. Here are some design tips:

Keep it Simple: A smaller space (20-50 sqm) is more than enough to accommodate 20-30 people comfortably. This allows for an intimate experience that encourages deeper interaction with the brand.
Blend Retail, Office, and Content: Brands can combine retail space, office functions, and content creation areas. For example, a beauty brand could host product demos in one section, offer skincare consultations in another, and set up a content studio where influencers can create brand-related content.
Seamless Integration: Ensure that the digital and physical experiences align perfectly. For example, if customers interact with the brand online via an app, they should be able to access similar features and experiences when they walk into the store.

Location and Traffic:

Intentional Traffic: While street-level retail often relies on chance traffic (people passing by), destination spaces should be designed for intentional traffic. The goal is to make the space somewhere people want to visit, not just somewhere they happen to stumble upon.
Access and Visibility: The location of the space still matters. Even though these spaces may not be on the high-traffic street level, they should still be easily accessible and in a location that has high community engagement potential. For example, transforming a corner in an older building with good foot traffic into a coffee shop and creative hub could turn it into a highly sought-after destination.

Avoiding Common Pitfalls:

Overcomplicating the Design: The allure of multifunctional spaces can sometimes lead to overcomplicated design. It’s important to remember that the space should still feel cohesive and aligned with the brand’s values.
Not Opening Too Early: Don’t rush into creating a physical space without building the community first. Ensure your digital audience is engaged and ready to visit before committing to a brick-and-mortar location.
Ignoring Location Impact: As mentioned earlier, while these spaces are cost-effective, don’t disregard the importance of location. Make sure your space is in a place that encourages intentional traffic.

4. Success Factors: Building a Vibrant, Multifunctional Space

To ensure long-term success, there are a few factors that brands should prioritize when developing their multifunctional spaces:

Consistency in Brand Experience: Your digital and physical spaces need to reflect the same brand story. Ensure that the atmosphere, aesthetic, and service style are consistent across both realms to create a unified experience.
Adaptability: Design the space with flexibility in mind. This could mean having movable displays, modular furniture, or areas that can be easily reconfigured for different events, pop-ups, or customer engagements.
Tech Integration: Use technology to enhance the customer experience. This could include interactive screens, AR (augmented reality) displays, or seamless online-to-offline shopping options (such as online ordering for in-store pickup).
Community Engagement: Create a space that fosters ongoing interaction and participation. Host workshops, product launches, or community events that connect with your audience in meaningful ways.

5. Conclusion: The Future of Retail in Metro Manila

The future of retail in Metro Manila isn’t about simply filling traditional retail spaces—it’s about transforming overlooked, underutilized spaces into vibrant hubs of both digital and physical brand engagement. As we’ve seen in global markets, the demand for destination spaces is only growing, and Metro Manila’s evolving real estate landscape is poised to support this shift. By tapping into these opportunities, brands can build lasting relationships with their customers, drive traffic in intentional ways, and create a unique community space that brings their brand to life.

This isn’t just a fleeting trend—it’s the future of how brands will connect with customers and create experiences that people will want to visit again and again whether its in a mall or anywhere else.