Liverpool Outperforms Palacio de Hierro in Commercial Real Estate Revenue
Department store giants leverage distinct real estate strategies to drive long-term financial growth.
1Divergent Real Estate Strategies
Liverpool and Palacio de Hierro utilize different models to generate income beyond retail sales. Liverpool operates a vast network of 30 shopping centers, focusing on managing leasable space for third-party tenants. Conversely, Palacio de Hierro maintains strategic partnerships and specific developments, prioritizing assets linked to its own luxury department store operations.
2Q3 2026 Financial Performance
In the third quarter of 2026, Liverpool reported a 16.3% annual increase in real estate revenue, reaching 1,527 million pesos. Meanwhile, its core retail division grew by only 1.1%. Palacio de Hierro saw a more modest 0.4% rise in real estate income, while its commercial segment expanded by 5.7% during the same period.
3Liverpool's Extensive Mall Portfolio
Liverpool manages over 1 million square meters of leasable area across 30 complexes, including major sites like Perisur and Galerías Insurgentes. The company actively expands its footprint, recently adding 7,000 square meters to Perisur. This scale allows Liverpool to diversify its tenant base, incorporating restaurants and gyms alongside traditional retail stores.
4Palacio de Hierro's Premium Focus
Palacio de Hierro avoids the large-scale mall operator model, instead holding minority stakes in high-end developments. The company owns a 20% interest in the Santa Fe shopping center and 35% in Angelópolis. Its real estate income is tied to these specific luxury assets and land leases connected to its own retail locations.
5Leasing Mechanisms and Occupancy
Liverpool utilizes hybrid contracts that combine fixed fees with performance-based variables linked to tenant success. This structure provides a buffer against retail volatility. By September 2026, Liverpool achieved a 94.5% occupancy rate in its malls, an improvement from the 93.6% recorded during the same period in the previous year.
6Long-term Revenue Growth Trends
Liverpool’s real estate division has nearly doubled its revenue over the last five years, climbing from 2,579 million pesos in 2020 to 5,287 million in 2025. Palacio de Hierro also saw growth, with its real estate and services segment rising from 457 million pesos in 2020 to 780 million pesos by 2025.
7Market Resilience and Positioning
Analysts suggest Palacio de Hierro’s focus on the luxury segment offers greater resilience against economic downturns compared to Liverpool’s broader consumer base. While Liverpool is more sensitive to immediate shifts in retail consumption, its diversified tenant mix helps mitigate risks, ensuring steady growth even without constant new mall construction projects.
8Future Outlook for Retailers
The real estate segments remain critical pillars for both companies, providing stable income streams that complement their retail operations. Liverpool is expected to maintain momentum through its existing portfolio structure, while Palacio de Hierro will likely continue leveraging its premium brand positioning to secure long-term value from its strategic real estate holdings.