REAL ESTATE

MARKET INSIGHTS
March 18, 2019
 Executive Summary

• Real Estate Values seen all-time highs across all sectors in 2019. We have seen the highest land value in Bonifacio
Global City at PhP 1.3M per sqm and the highest condominium price at PhP 540K per sqm in Shang at The Fort.

• Offices at Bay and Alabang still enjoy the lowest vacancy rate at 1% -- translating to record rental rates with
PhP1.2K/sqm/month in the Bay and PhP 750/sqm/month in Alabang. Makati City and Bonifacio Global City will
have very low supply of office space by 2021.

• There is only 216k sqm of PEZA accredited space so far this year in Metro Manila against forecast demand of 450K sqm
from the IT-BPM industry – this deficit will be the biggest hurdle for growth in IT-BPM expansion – there are 29
buildings (totaling 544K sqm of vacant office space) under PEZA application across Metro Manila. LPC pleads for the
government to approve more PEZA zones in Metro Manila and across the Philippines. Quezon City has the largest
supply of PEZA Accredited space from now until 2023.

• The Philippines has recorded more than 200K sqm of office demand as of 1Q 2019. The IT-BPM industry led the Philippine
office demand with 115K sqm or 56% of the 1Q 2019 take-up followed by the Offshore Gaming industry with 36K sqm.
With Metro Manila making 92% (187K sqm) of that demand. Regional districts have started strong with Clark, Tarlac,
and Davao leading the provincial sites.

• Boom in warehousing demand in the logistics market attributed to the 226,000 sqm requirement of warehouse space
needed by Online retailers.

• There is a surge in Mainland Chinese buyers in the residential condominium sector and we anticipate for this to
continue for the long term especially with rekindled diplomatic ties between Philippines and China

• Chinese tourists are now using mobile payments such as WeChat Pay and Alipay all over the world; 93% of Chinese tourists
would increase their spending if mobile payments are made available.

2
 PHILIPPINE
OFFICE MARKET
 Metro Manila Cityscape
PROPOSED

• Most of these districts will be fully developed by 2020. BULACAN

AEROTROPOLIS

• Metro Manila may see a deficit in office supply by 2022 as key

business districts maintain low vacancy rates.

3 MAJOR CBDs
MAKATI 400 Hectares Quezon City
Roughly869 hectares
ORTIGAS 169 Hectares of master-planned or
mixed-use developments spread
BGC 300 Hectares across the 3 Major CBDS

50 BUSINESS PARKS San Juan

Manila
MAKTAI. MAKATI CBD. CENTURY CITY. ROCKWELL CENTER. CIRCUIT MAKATI. QUEZON CITY. UP
TECHNOHUB. EASTWOOD CITY. ETON CENTRIS. ARANETA CYBERPARK. ROBINSONS Manda-
1 2 luyong Ortigas/
BRIDGETOWNE IT PARK. VERTIS NORTH. UP TOWN CENTER. FAIRVIEW TERRACES. ALI 3 Pasig
CLOVERLEAF BALINTAWAK. NUVO. SM CITY NORTH EDSA COMPLEX. MANDALUYONG. 4 Makati
GREENFIELD DISTRICT. ROBINSONS CYBERGATE. ROCKWELL SHERIDAN. SAN JUAN. SANTOLAN Bay/
TOWN PLAZA. ORTIGAS. ORTIGAS CBD. ROCKWELL BUSINESS CENTER. ARCOVIA CITY. SILVER Pasay
CITY. CAPITOL COMMONS. PARKLINKS. MUNTINLUPA. FILINVEST CITY. LA FUERZA. NORTHGATE
CYBERZONE. MADRIGAL BUSINESS PARK. ALABANG WEST. AYALA SOUTH PARK. TAGUIG. ARCA BGC / Taguig
SOUTH. BONIFACIO GLOBAL CITY. UPTOWN. VERITOWN. BONIFACIO CAPITAL DISTRICT LAS
PINAS. PORTOFINO. EVIA. PASAY. NEWPORT CITY. SM MALL OF ASIA COMPLEX. METROPOLITAN
BUSINESS PARK. DOUBLE DRAGON CYBERCAMPUS. FILINVEST CYBERZONE PASAY. PARANAQUE. Parañaque
ASIAWORLD CITY. ASEANA BUSINESS PARK. AYALA ASEANA. WESTSIDE CITY. MANILA.
CITYPLACE. SAN LAZARO.
Approximately 1,891.5 hectares spread across Las Pinas

50 business parks
4 UPCOMING RECLAMATION PROJECTS
1. New Manila Bay International Community (UAA Kinming Group) 2. Manila Waterfront City (WMPD) Alabang
3. Solar City Urban Center (MGDC). 4. Coastal Bay Project (SMPH).
1,508 hectares of upcoming reclaimed land shared
across 4 projects 4
 PROPOSED
100 KMS TO
BULACAN CLARK North Caloocan
AEROTROPOLIS

LEGEND LEGEND

FILLED – APPROVED PROJECTS EXISTING INFRASTRUCTURE

OUTLINED – PROPOSED PROJECTS 1 C6 EXTENSION (SEMME) 2021

1 NAVOTAS RECLAMATION PROJECT 2 C5 EXTENSION 2020 Valenzuela

2 PASAY/ SM 360 RECLAMATION PROJECT 3 CAVITE LAGUNA EXPRESS WAY 2020

4 NORTH HARBOR LINK 2020

Malabon Quezon
MCCRP NORTH SECTOR RECLAMATION –
3
SOUTH PARCEL/ MANILA SOLAR CITY (MGDC) Navotas City
EDSA
5 MAKATI – BGC SKYTRAIN 2021
LAS PIÑAS – PARAÑAQUE COASTAL BAY PROJECT
4 6 LRT 1 EXTENSION - CAVITE 2021 Marikina
(ALLTECH) Caloocan
5 MANILA HARBOR CENTER 50 HAS. 7 NLEX – SLEX CONNECTOR 1 2021 NORTH

C5
HARBOR
8 NLEX – SLEX CONNECTOR 2 2021
6 BRADI’S SMART HARBOR MANILA
9 MAKATI INTRA-CITY SUBWAY 2025 Rizal
7 NEW MANILA/ UAA KINGMING RECLAMATION San Juan
Manila
10 JICA SUBWAY 2025
8 BASECO RECLAMATION PROJECT SOUTH
HARBOR Mandaluyong Pasig
9 MANILA WATERFRONT CITY RECLAMATION
TOTAL 145.9 km

MCCRP NORTH SECTOR RECLAMATION –

10 MANILA BAY Makati
NORTH PARCEL (ASSERCO)
Pasay
11 HORIZON MANILA RECLAMATION (JBROS)

12 PASAY HARBOUR 265 RECLAMATION PROJECT Taguig

13 PARAÑAQUE 300 RECLAMATION (SMPHI)
PROPOSED
SANGLEY NAIA
14 844 RECLAMATION BY CAVITEX HOLDINGS (PROVINCE) AIRPORT

15 420 HECTARES RECLAMATION PROJECT (BACOOR)

Parañaque

SLEX
16 PP. NO. 88 FOR PHIL. NAVY RECLAMATION

17 SANGLEY POINT INTERNATIONAL AIRPORT (PROVINCE)

Las Piñas LAGUNA DE BAY
18 5-ISLAND RECLAMATION BY CENTURY PEAK (PROVINCE)

MANILA BAY INTEGRATED FLOOD CONTROL, COASTAL

19
DEFENSE AND EXPRESSWAY PROJECT

TOTAL 13,560 Ha.

Muntinlupa
19 Projects totaling 13,560 Hectares of reclaimed land along with an
infrastructure pipeline of 85.2 Kms of road and 60.7 Kms of rail within
Metro Manila and its immediate vicinity has sparked a Rebirth of Manila
Bay Interest
 Regional Cityscape
Unprecedented countryside
LAOAG. CAMELLA. VALDEZ CENTER. CAGAYAN. CAGAYAN
SPECIAL ECONOMIC ZONE AND FREEPORT. PROJECT PRIMO.
development.
BAGUIO. BAGUIO AYALA LAND TECHNOHUB. SM BAGUIO
CYBERZONE BUILDING. PCH IT CENTER. ABANAO SQUARE. LAOAG Approximately 134,096 hectares
of master-planned or
NUEVA ECIJA. PALAYAN CITY GOV’T. CENTER & CENTRAL CAGAYAN
2
BUSINESS HUB TARLAC. LUISITA BUSINESS PARK. TARLAC
2
PROVINCIAL IT PARK. BULACAN. PDC TECHNOPARK. BAGUIO
mixed-use developments
ALTARAZA. FIRST BULACAN IT PARK. CIUDAD DE VICTORIA. 4
ABS-CBN CAMPUS. HORIZON IT PARK RIZAL. HIGHLAND TARLAC CAVITE. BATANGAS. LAGUNA. VERMOSA.
CITY URDANETA. CB MALL. NUEVA ECIJA PONTEFINO. SUNTECH IT PARK. HAMILO COAST.
2 2 SMDM IT CENTER. SOUTHFORBES IT PARK.
12 SOUTHWOODS. NUVALI. ETON CITY. BATSTATEU
Over 101 I.T. parks and PAMPANGA
7
BULACAN/RIZAL
KNOWLEDGE, INNOVATION AND SCIENCE PARK.
MAPLE GROVE.
PANGASINAN 1 1 QUEZON
business districts CAVITE / GREENFIELD CITY. PUERTO AZUL.
BATANGAS 13 CEBU. CEBU IT PARK. CEBU SRP.
/ LAGUNA
CEBU BUSINESS PARK. MACTAN NEWTOWN.
Countryside development going through ABOITIZLAND CEBU. WATERFRONT TOWNSHIP.
unprecedented construction boom driven by CITTA DE MARE. SMC. OAKRIDGE BUSINESS PARK.
AKLAN
1 1 CAPIZ
IT-BPM and tourism. PALAWAN ILOILO
GATEWAY CENTRAL INFORMATION TECHNOLOGY
PARK.
5
4 10 CEBU BOHOL. TAGBILARAN IT HUB DAVAO. MATINA IT
PAMPANGA. CLARK GLOBAL CITY. CLARK SPECIAL BACOLOD 7 PARK. ABREEZA. DAVAO PARK DISTRICT. LANANG
ECONOMIC ZONE. PHILEXCEL BUSINESS PARK. IT PARK. DAMOSA IT PARK. NORTHPOINT.
BERTAPHIL BUSINESS PARK. SM CITY CLARK. CLARK
DUMAGUETE 4 1 BOHOL CAMELLA. CIUDADES. LUBI ISLAND PLANTATION.
GREEN CITY. NEPO CENTER. ALVIERA. CAPILION. THE ROBINSONS CYBERPARK DAVAO.
INFINITY. FILINVEST MIMOSA. SKYTECH IT PARK A57 TECHNO PARK. AZUELA COVE.
AKLAN. BORACAY NEW COAST. CAPIZ. PUEBLO DE
5
PALAWAN. LIO RESORT TOWN. SAN
PANAY TECHNOPARK. ILOILO. ILOILO TECHNOHUB. CAGAYAN DE ORO
ZAMBOANGA 4 VICENTE. PUERTO PRINCESA. ROXACO
ATRIA PARK DISTRICT. GAISANO CAPITAL. AYALA LAND BUSUANGA. QUEZON. BALESIN
12
SICOGON. ISLAND CLUB
ILOILO BUSINESS PARK. BACOLOD. LOPUE’S EAST DAVAO
ZAMBOANGA. MEGALAND MALL.
IT CENTER. ONE AND TWO SANPARQ. THE BLOCK CITYMALL ZAMBOANGA.
IT PARK. ROBINSONS CYBERGATE CENTER. THE ZAMBOECOZONE AND FREEPORT NEW
UPPER EAST TOWNSHIP. ZAMBOECOZONE
LOPUE’S SOUTHSQUARE IT PARK. BACOLOD IT PARK. Legend: HIGHLANDS. CAGAYAN DE ORO.
CAPITOL CENTRAL. DUMAGUETE. DUMAGUETE Number of townships LIMKETKAI CENTER. SM CITY BPO 2.
BUSINESS PARK. LINKSYS IT PARK. LP IT PARK. YY CENTRIO. ONE PROVIDENCE. HABINI 6
STAR DAS. BAY DEVELOPMENT.
 Philippine Office Demand Activity
Building Completion | Industry | District (As of 1Q 2019)
As of 1Q 2019, the Philippines has recorded more than 200K sqm of office demand. Metro Manila makes up 92% of the take-up with
187K sqm. The regional districts have started strong as well with Davao coming in at second with 6K sqm take-up followed by Clark and
Tarlac with 5K sqm each.
The IT-BPM industry led the Philippine office demand for 1Q 2019 with 115K sqm or 56% of the 2019 take-up followed by the
Offshore Gaming industry with 36K sqm.

7
*Gross Leasable Area
 Metro Manila Demand Activity
Industry | District (As of 1Q 2019)
1Q 2019 Metro Manila Demand Activity is now at 187,000 sqm, or about 15% of FY 2018 Demand Activity -- We are optimistic in our
FY 2019 demand forecast to reach 1.2M sqm.
The IT-BPM industry led the office take-up for 1Q 2019 with 102,000 sqm or 54% of the 2019 take-up followed by the Offshore
Gaming industry with 37,000 sqm take-up. The other notable industry is the Flexible Workspace with 5,000 sqm take-up.
Quezon City remains the top location for the IT-BPM industry due to its high supply of PEZA space. It will be the go-to district for
IT-BPM expansions in 2019. The Offshore Gaming industry still chooses the Bay City as their preferred location.

*Gross Leasable Area

8
 Metro Manila Demand Activity
FY 2016 | FY 2017 | FY 2018 | 1Q 2019
The IT-BPM industry continues the upward trend since 2017 with now having 102K sqm take-up in three months.
We expect for it to grow at a faster pace and reach the forecasted 450K sqm take-up in 2019 should there be more PEZA spaces
available in the market

*Gross Leasable Area in thousands (sqm) 9

 Regional Demand Activity
Industry | District (As of 1Q 2019)
The regional districts have started strong with Davao having 6K sqm take-up followed by Clark and Tarlac with 5K sqm each. We expect
Clark Global City to absorb most of the demand for office space outside of Metro Manila.
The IT-BPM industry have continued occupying office space outside Metro Manila and moved to the regions across the country where
there are available PEZA spaces and a qualified labor pool.

*Gross Leasable Area

10
 Philippines Office Supply
Current vs. Pipeline
Philippine office supply will grow by 34% in the next 5 years. The unprecedented level of developments outside Metro
Manila is expected to add 1.23 million square meters to its current supply of 2.08 million.
We forecast Clark Global City to be largest producer of office space outside Metro Manila in the next 5 years.

11
METRO MANILA
OFFICE MARKET
 Metro Manila Office Supply
Current vs. Pipeline
Current vacancy rate across Metro Manila is at 5.57%
Offices at Bay and Alabang still enjoy the lowest current vacancy rate at 1%. Makati City and Bonifacio Global City will have a
very low supply of new buildings coming in by 2021. We are seeing record high office rental rates across the districts.
Bay and Ortigas Center will be the largest suppliers of office space in the next 5 years.

Current supply Pipeline supply

for 58 years (1960s to 2018) for 5 years (2019 to 2023E)

10.94M sqm 3.12M sqm

Legend: Leased Pre-committed Vacant 13

 Metro Manila Office Supply Pipeline
Per District, Per Year (2019 to 2023E)
Metro Manila will continue to see decreasing office supply in the next 5 years, therefore we anticipate a significant increase in rents
during this period.
In 2021, Metro Manila will see a 38% decrease in new supply that will be added in the market. After 2019, Bonifacio Global City will
not have a new stock added until 2023.

3.12M sqm
Total supply
2019 to 2023E

Legend: Leased Under Nego Vacant 14

*Gross Leasable Area in thousands (sqm)
 Metro Manila Office Supply - PEZA Status
PEZA vs. Under Application for PEZA vs. Non-PEZA Vacant Spaces
There is only 216k sqm of PEZA accredited space so far this year in Metro Manila against forecast demand of 450K sqm from the IT-
BPM industry – this deficit will be the biggest hurdle for growth for the IT-BPM industry – there are 29 buildings (totaling 544K
sqm of vacant office space) under PEZA application across Metro Manila.
Quezon City will be the go-to district because of the five available townships with PEZA Accredited spaces that can cater to the
expansion requirements of the IT-BPM industry.

*Gross Leasable Area in thousands (sqm) Legend: PEZA Under App None 15
 Metro Manila Office Supply - PEZA Status
1960 to 2023 PEZA Vacant Space
There are only 26 PEZA Accredited buildings (totaling 912K sqm vacant space) that can accommodate a take-up of 10,000 sqm
and above.
Only Quezon City can accommodate the demand from the IT-BPM industry from now until 2023.

16
 Regional Office Supply
Pampanga, Cebu, and Davao - Current vs. Pipeline Supply
Cebu, Davao, and Pampanga are the major business districts outside Metro Manila contributing about 2.4M sqm of office to the
Philippine Supply. Cebu leads the supply of office space outside Metro Manila with more than 1M sqm of office supply with only 57,000
sqm of vacant space available, but we expect Clark to provide supply within the next five years to rival that of Cebu.

Legend: Leased Vacant 17

*Gross Leasable Area in thousands (sqm)
 Regional Office Supply
Other Regions - Current vs. Pipeline Supply
The ever-growing IT-BPM industry significantly impacts acceleration of developments not just in Metro Manila, but all over the
Philippines.
The efforts of the National Government to fund infrastructure projects positively impact cities nearby Metro Manila such as Cavite,
Laguna, and Pampanga as these cities become more accessible.

Legend: Leased Vacant 18

*Gross Leasable Area in thousands (sqm)
 Economic Drivers by the numbers
IT-BPM & POGO Industries
The IT-BPM and POGO Industries continue to be significant demand drivers for office space. The IT-BPM industry generates about
USD 1.2B to the office annual rental income while the POGO Industry generates an estimate of USD 170M. These industries
contribute about USD 16.5B to the Philippine Economy.
In just 3 years, the POGO industry contributed USD 8.2B of salaries which exceeds the IT-BPM industry with USD 6.4B.
The POGO Industry is also notable driver for the residential market which generates an annual housing rental income of USD 501M.

CONTRIBUTION TO THE PH ECONOMY

Estimated
Estimated Total
Contribution to
Component Contribution to
the PH
the PH Economy
Economy
IT-BPM Salaries USD 6.4B
IT-BPM Office
USD 1.2B
Rental
POGO Salaries USD 8.2B 16.5B
POGO Office Rental USD 170M
POGO Housing
USD 501M
Rental

ESTIMATED YEARLY ESTIMATED YTD FIT-OUT ESTIMATED EMPLOYEE ESTIMATED ANNUAL ESTIMATED ANNUAL
SALARY COST FOOTPRINT HOUSING RENTAL OFFICE RENTAL
(including furniture, fixtures & technology)

IT-BPM POGO IT-BPM POGO IT-BPM POGO POGO IT-BPM POGO

PhP 338B or PhP 435B or PhP 488B or PhP 70.2B or 1.3M 354K PhP 26.6B or PhP 64B or PhP 8.9B or
USD 6.4B USD 8.2B USD 9.2B USD 1.3B USD 501M USD 1.2B USD 170M
USD Conversion = $ 53

Source: Bureau of Immigration, IBPAP Organization

19
 Real Estate Values
Land Values – Various Sectors as of 1Q 2019

Real Estate Values seen all-time highs across all sectors in 2019. We have seen the highest land value in Bonifacio Global City at
PhP 1.3M per sqm and the highest condominium price at PhP 540K per sqm in Shang at The Fort.
The Growing Tourist Market (7.1 Million Tourists in 2018) has led to record high prices in tourist hotspots nationwide.
Industrial Land values hit highs due to scarcity of supply, especially in the Greater Metro Manila Area.
Luxury Village Properties continue to be a strong and steady investment option given the limited supply. Dasmarinas Village leads the
way commanding up to 450,000 per sqm. Golf Shares also ride land values to all time high share prices. Luxury Condominiums also see
record high prices, with the poshest condominiums priced at over half a million pesos per sqm.
Commercial Residential Tourism Industrial
Business Values Luxury Values Tourism Values Industrial Values
District PhP/sqm Village PhP/sqm Hotspot PhP/sqm District PhP/sqm
Arca South 300K – 350K Forbes Park 350K – 400K El Nido 30K – 40K Laguna 7K – 8K
Dasmarinas
Bay City 350K – 450K 350K – 450K San Vicente 10K Cavite 5K – 6K
Village
BGC 480K – 1.5M Urdaneta 320K Siargao 10K – 25K Batangas 6.5K – 7.5K
Davao 195K – 220K Corinthian 190K Mactan 12K Pampanga 6K – 7K

Filinvest City 309K – 420K Greenhills 250K Golf Club Shares Cebu 6.5K – 7.5K

Green
Makati City 400K – 1.2M 300K Golf Club Share Value Bulacan 6K – 7K
Meadows
Cagayan De
Ortigas 250K – 600K Valle Verde 200K Manila Golf 65M 4K – 5K
Oro
99K
Ayala
Clark *simulated 95K – 130K Wack Wack 35M Condominiums
Alabang
sale
Alabang Values
Cebu 190K – 350K Hillsborough 70K 7M Luxury Flat
Country Club PhP/sqm
Horizon
540K
Homes
The Estates 533K 20
20
INDUSTRIAL
 Logistics Market
Warehousing Requirements

The rise of the E-Commerce industry in the Philippines is driving up the need for warehouse space of Online retailers

Online retailers are the fastest growing in the logistics market in terms of warehouse expansion requirements
demanding 226,000 Sq.M or 44% of 516,000 sqm.

Source: LPC Research, LPC Industrial Pipeline, Various News Articles

22
 Logistics Market
Warehouse Demand arising from E-Commerce

Every PhP 50B increment of E-commerce revenue generates 125,000 Sq.M of warehouse demand

E-commerce alone will take up about 773,000 SqM of warehouse space by 2023

Warehousing requirements will be increasing on an annual growth rate (CAGR) of 34% YOY

E-Commerce warehouse take up is projected to

773
annually grow by 34% till 2023
577

CAGR 431
2019 – 2023 34%
321
2015-2018 24%
240
134
110
89
70

2015 2016 2017 2018 2019 2020 2021 2022 2023

*Warehouse Space (SqM) in Thousands Legend: Demand of warehouse space for E-Commerce per year

Source: CBRE Research, Google-Temasek

23
 Logistics Market
Warehouse Specifications
E-Commerce is changing how warehouses are typically designed; designs are becoming more sophisticated
Due to higher specifications, warehouse construction costs are expected to increased by 43% but will translate to a
66% increase in average warehouse lease rates

Past Specifications New Specifications

70% of lot area Warehouse Footprint 70% of lot area

30% of lot area Open Area 30% of lot area
4 Meters to 8 Meters Ceiling Height (Clear Height) 8 Meters to 12 Meters

3,000 psi Floor Loading 3,000 psi (8 – 10 meters)

4,000 psi (10 – 12 meters)
Drive in type of loading bay Loading Bays 4 Meter depth with canopy
3 bays per 5,000 sqm 6 bays per 5,000 sqm
PhP 14,000 P/Sq.M Average Construction Costs PhP 20,000 P/Sq.M
1,000 to 5,000 sqm Typical Warehouse Sizes 2,000 Sq.m to 10,000 Sq.m
BTS: 10 years Typical Lease Terms BTS: 10 years
RBF/SFB: 3 – 5 years RBF/SFB: 3 – 5 years
PhP 120 – 150 p/sqm Typical Lease Rate PhP 220 – 250 p/Sq.M

Other New Specifications:

Wet stand pipe, smoke detector and sprinkler system 3-phase electricity
Roll up doors Small office/mezzanine office and CR facilities
High bay lights Reinforced concrete flooring with rebars at 8 inches depth
RESIDENTIAL
 The Chinese Impact
Coming of New Residential Market
There is a surge in Mainland Chinese buyers in the residential condominium sector and we anticipate for this to continue
for the long term especially with rekindled diplomatic ties between Philippines and China.
Because of foreseen significant shift in buyers, residential sales will no longer be dominated by the OFWs

“1Q 2018: half of residential sales came

from overseas buyers of which 50% are
mainland China. If we don’t control them,
it could reach up to 90%” – DMCI
President Isidro Consunji

Chinese investors accounted for 34%

of sales compared to 10% in 2016

30% of 1Q residential sales are

Chinese buyers up from 10% in 2017
and less than 5% in 2016

Source: Nikkei Asian Review. DOT, DOLE, Ayala Land Annual Report 26
Inventory Analysis
Project Performance by location in Metro Manila
Mainland China buyers have preference for CBD districts, near schools & support commercial retail and near Chinese communities or locations
where there are already existing Chinese (Usually takes up 20% to 45% of foreign buyers)
Assuming with a constant aggregate take-up of 7,757 units, the remaining inventory will be depleted in 3 months

*Depletion of inventory = Unsold units / total monthly take-up

**Average monthly take-up = Total monthly take-up / no. of current projects 27
Source: LPC Research
 Shang at The Fort is the Most Expensive Condominium
Metro Manila price ranges are positioned at PhP 113K/sqm to PhP 540K/sqm

Shang at The Fort (Horizon Homes) has seen the most expensive condominium price at PhP 540K per sqm. Sustained demand
amidst limited supply of condominiums in Makati enabled prices to an all-time high of PhP 533,000/sqm due to growing affluent
market
Residential condominium buyers are mostly Investors rentals for BPO and POGO market and Professionals for End-use
Mainland Chinese make up the largest share of foreign buyers for investment purposes
Developers may start to have a focus group targeting Chinese market and look for Chinese developers as partners

28
Source: LPC Research
 The Chinese Impact
Coming of New Residential Market

Chinese buyers will continue to push property prices up.

BAY AREA

2009 2019

164%

PhP 102k/sqm PhP 270k/sqm

Launch Price Current Price
Sea Residences Copeton Baysuites
SMDC Anchor Land
2018 Selling Price: PhP 285k/sqm
2009 2019 % Sold: 75%
Take-up: 192 units/month
Turnover: 2024
74%

PhP 131k/sqm PhP 228k/sqm

Launch Price Current Price
Solemare Park Suites
Anchor Land

2009 2019

200%
Gentry Manor
Megaworld
2018 Selling Price: PhP 322k/sqm
PhP 91k/sqm PhP 273k/sqm % Sold: 75%
Launch Price Current Price
Bay Garden Club Take-up: 35 units/month
Federal Land Turnover: 2024
29
The Chinese Impact
Coming of New Residential Market
Strong demand has led to tenants dictating record high prices for rental units. Rental rates have seen an increase of up to 80% of rates from 3 years ago
in Bay area BAY GROWTH IN RENTAL RATES
1BR units have gone from Php25,000 back in 2015 to Php45,000 while a 2BR unit’s price rose from Php55,000 to Php85,000
High Rental rates - Bay: P1.2k to P1.6k per sqm per month Alabang: P1k to P1.6k per sqm per month
Tenants are maximizing the area of the unit by fitting 4 people in 1BR units, and 8 people in 2BR units
Lease terms - Prefer to pay in cash for 1 year advance and 6 months deposit
 The Chinese Impact
Coming of New Residential Market
High rental growth rates in Bay and Alabang are driven by Chinese workers from offshore gaming customers and mainland Chinese
who frequent brick and mortar casinos compared to Non-POGO tenants in Makati and BGC
A total of 57 POGO licenses were issued from 2016 to 2019

31
Source: LPC Research (based on a 1BR unit), price excl. of VAT
TOURISM
 Asia Pacific International Tourist Arrivals
FY 2017 vs. FY 2018
The World Tourism Organization’s (UNWTO) Global Tourist Arrivals for 2020 was unexpectedly achieved in 2018, with 1.4 billion arrivals.
Philippine tourist arrivals grew by 7% from 6.6 million in 2017 to 7.1 million in 2018. China continues to be the driver for tourism in Asia as seen in Hong Kong with
14% growth, 15% in South Korea and the 30% growth in the Philippines.
Countries which enforced simpler visa requirements attracted more visitors as evident in Japan, Vietnam and Myanmar which grew by at least 9% to as much as 22%
in tourist arrivals.
 Exponential Chinese Tourist Influx
Top 10 Tourist Market in the Philippines
In 2018 the Philippines grew by a notable 7.6%, surpassing the global average of tourist arrivals
The top 3 source markets of Philippine Tourism are: South Korea, China, and USA. South Korea remained the top source market with
1.6 million arrivals despite its -1.2% decrease in 2018. However, China continues to be the fastest growing market with 34%
increase.
 Mobile Payments boosts Chinese Tourists’ spending
Chinese Tourists exhibiting stronger purchasing power
In 2017, Mainland Chinese tourist became the biggest spenders and contributed the most to Global Tourism Revenue with USD 258B which is
almost twice as much as US-tourist spending of USD 135B.
Chinese tourists are now using mobile payments such as WeChat Pay and Alipay all over the world; 93% of Chinese tourists would
increase their spending if mobile payments are made available.
About 1,000 establishments in the Philippines are starting to accept payment via Chinese mobile payment applications. Being open to
more mobile payments will encourage the Mainland Chinese tourists to spend more than an average of USD 1K per day.

RUSSIA
EUROPE JAPAN
$3,754 $2,952
USA
$4,462 GERMANY
AUSTRIA
S.KOREA
FRANCE SWITZERLAND $3,007

HK
UNITED ARAB
$2,847
ERIMATES
TAIWAN
MACAU $2,027
$2,335
THAILAND
PHILIPPINES
$2,026
$1,154
SINGAPORE
WECHAT PAY AND ALIPAY $2,971
WECHAT PAY ONLY AUSTRALIA
$3,541

Source: Nielsen Global, WeChat Pay, Alipay (TechinAsia), AUB-Vice President Maria Magdalena Surtida
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DISCLAIMER:
1. This Leasing Material has been prepared in good faith and with due care by LPC solely for the information of potential lessees to assist them in deciding whether they are interested in the premises offered for lease.
2. The information does not form part of any offer or contract and is intended as a guide only
3. You should not rely on any material contained in this Leasing Material but should make independent investigations to satisfy yourselves as to the correctness and relevance of any statements or representations, and consult with legal, financial and tax advisers where
appropriate.
4. All calculations including, but not limited to dimensions, area and rent, contained in the Leasing Material are based on figures provided to the client by outside sources and have not been independently verified by LPC and therefore may not be correct, complete, or
relevant
5. No representation or warranty is made by LPC as to the accuracy or completeness of the Leasing Material, in whole or in part. No liability for negligence or otherwise is assumed by LPC or the lessor of this property for any information contained in the Leasing Material
6. All Dollar ($) amounts quoted, if any, do not include any goods and services tax, value added tax, consumption tax or similar tax unless specifically stated in writing
7. Except as expressly indicated herein, LPC does not undertake any obligation to advise you of any changes or updates with respect to the information contained herein