COFFEE chains are expanding in the Philippines, prompting commercial landlords to prioritize food and beverage tenants that can generate repeat visits and sustain retail activity, according to property consultancy CBRE Philippines.
Competition is also pushing operators to capture demand beyond the morning rush, with coffee shops increasingly serving as venues for work, socializing and late-night gatherings.
Highlands Coffee, a Vietnamese chain, opened a 24-hour outlet along Gen. Maxilom Ave. in Cebu City on Thursday, Oct. 8, 2026, adding to the city’s growing café market.
Operated by Supreme Vietnamese Coffee Inc., the store at the Two Mango Avenue Building caters to customers seeking coffee, food and a place to meet or work beyond conventional dining hours. The outlet serves Vietnamese coffee specialties such as Phin Sua Da, an iced coffee brewed using a traditional phin filter and mixed with condensed milk, as well as tea beverages and bánh mì.
The round-the-clock format allows the chain to serve customers outside conventional operating hours but also exposes it to higher staffing and utility costs during slower periods, making sustained foot traffic critical to profitability.
Maam Argos, head of Retail and Transaction Management at CBRE Philippines, said the expansion of coffee chains is intensifying competition in the Philippine market.
Dunkin’ has about 900 outlets nationwide, while Pickup Coffee, which is barely more than five years old, had around 500 locations and plans to increase this to 800 within the year, she said.
Other brands, including Bo’s Coffee and Coffee Project, have also indicated expansion plans over the next two to three years, while new entrants from South Korea, China and Japan are eyeing to grow their presence in the Philippines.
The continued expansion underscores the growing importance of coffee shops in retail leasing strategies, as landlords seek tenants that can generate regular foot traffic and support the performance of surrounding businesses.
“Your coffee shops, you go there 15 to 20 times in a month,” Argos said, contrasting the frequency of coffee shop visits with visits to banks, which customers typically make only a few times a month.
She said large coffee chains generally attract customers looking for convenient, grab-and-go purchases, while smaller cafés tend to encourage longer stays. Property owners with sufficient space could benefit from accommodating both formats to serve different customer segments.
For commercial landlords, the challenge is to select brands that can deliver consistent customer traffic while structuring leases to reflect individual tenants’ performance.
Argos said percentage-of-sales rental arrangements could help landlords monitor store performance. However, they should also consider shorter lease terms and break clauses to maintain flexibility amid expected turnover among coffee operators.
Such arrangements allow property owners to participate in tenants’ sales performance while limiting their exposure in a market where competition among brands is intensifying.
Coffee chain expansion also reflects the broader role of food and beverage businesses in Philippine retail. In the latest quarter covered by the presentation, eight of the 10 brands identified as new entrants or expanding businesses were in the food and beverage sector.
Argos said the wider retail market was increasingly being shaped by consumers’ preference for experiences, including dining, staycations and wellness activities, rather than spending solely on goods.
For provincial developers, the opportunity lies in attracting established chains and emerging concepts while ensuring retail spaces meet their operating requirements. This may require landlords to provide appropriate store sizes, visible frontage and flexible leasing arrangements to attract expanding brands.
As coffee chains add outlets and international players enter the market, coffee shops are becoming more than just retail tenants. They are increasingly central to commercial property strategies aimed at attracting visitors, encouraging repeat visits and sustaining activity across retail developments. / KOC