1Q 2017 Property Market Overview

Colliers International
May 2017
General Macroeconomic
Overview
 NEDA’s 1Q 2017 GDP growth forecast:
6.5%-7%
9%
Philippine Historical GDP
8%
Real GDP Growth (Constant 2000 Prices)

7% 7.2% 7.0%
6.8% 6.9%
6% 6.1% 6.5%
5.9%
5%

4%
3.6%
3%

2%

1%

0%

1Q 2017F
2010

2013
1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2011

2012

2014

2015

2016
-1%

-2%

• Industry, bannered by manufacturing, will continue to drive growth.

• Public construction to be a major contributor on the back of massive infrastructure spending.
• BPO and Tourism to propel the Services sector.

4 Source: Philippine Statistics Authority

 PH among the fastest growing
economies in Asia
• Consumer spending accounts for 70% of the economy, and
2016 GDP remains as a major growth driver.
Country
Growth
• Surge in foreign investments will continue given the
India 7.9% Philippines’ improving status as an investment hub in Asia

• Infrastructure’s multiplier effects will be spread across

Philippines 6.9%
several sectors including real estate. But government needs
to improve agencies’ absorptive capacities and streamline
China 6.7% the bureaucracy

Vietnam 6.2%
2017 GDP Forecasts by International Institutions
Thailand 5.8% World Bank 6.9%
IMF* 6.8%
Indonesia 5.0% S&P* 6.6%
Moody's 6.5%
Malaysia 4.2% HSBC 6.5%
ADB 6.4%
6.1% 6.2% 6.3% 6.4% 6.5% 6.6% 6.7% 6.8% 6.9% 7.0%
Singapore 2.0%

5 Source: Philippine Statistics Authority; Bangko Sentral ng Pilipinas; Various government agencies abroad.
 OFW Remittances
35

30

25
USD, in billion

20

15

10

2007
1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017
1Q 2Q 3Q 4Q

• Remittances reached USD29.7 billion in 2016; up 4.9% YoY and higher than the central bank’s
forecast of 4%.
• It reached USD4.8 billion for the first two months of 2017; up 5.9% YoY.

6 Note: Remittances indicates personal remittances. 1Q 2017 figure is up to February 2017 only.
Source: Bangko Sentral ng Pilipinas
 PH Lending Rates
Lending Rates 1Q 2017: 18%
Low: 4.3%
High: 6.6% 16%

14%
Average Bank Mortgage Rate:
1Q 2017: 6.30%*
12%

Average Inflation Rate: 10%

FY2016: 1.8%
1Q 2017: 3.2% vs. 1.1% in 1Q 2016 8%
6.6%
Average inflation for 1Q 2017 is still within 6% 6.3%
the BSP’s target of 2% to 4%.
4% 4.3%
The increase was attributed to tight domestic 3.2%
2%
food supply and upward adjustments in
petroleum prices and electricity rates.
0%

1Q 2016
2Q 2016
3Q 2016
4Q 2016
1Q 2017
2010
2011
2001
2002
2003
2004
2005
2006
2007
2008
2009

2012
2013
2014
2015
Lending Rate (Low) Lending Rate (High)
Headline Inflation Rate Average Mortgage Rate

7 *Average of mortgage rates offered by major banks in the Philippines

Source: Bangko Sentral ng Pilipinas; Colliers International Philippines Research
 Metro Manila Land Values
700
Location %Growth (QoQ) %Growth (YoY)
Makati CBD 5.07% 12.09%
600 607
Fort Bonifacio 2.16% 9.61%
541
Ortigas Center 3.84% 10.73%
500 508
Manila Bay Area 1.58% 8.00% 463
PHP (‘000) / sq m

400

300

219 242
200
193 209

100

2Q 2017F

3Q 2017F

4Q 2017F

1Q 2018F
1Q 2016

2Q 2016

3Q 2016

4Q 2016

1Q 2017
2008

2015
2001

2002

2003

2004

2005

2006

2007

2009

2010

2011

2012

2013

2014

Makati CBD Fort Bonifacio Ortigas Center Manila Bay Area

8 Source: Colliers International Philippines Research

Commercial Metro Manila

Retail Retail Sector Opportunities

 Retail Sector in a Nutshell

Vacancy across
Developers
all formats is respond by
rising future-proofing
their businesses:
1) More lifestyle-oriented
tenancy

2) Expanded online
presence

10
 Metro Manila Retail Supply & Population
As of 1Q 2017

Supply
1.6M sq m

North Pop.
5.4M

Supply Supply Supply

Metro Manila total retail stock 1.2M sq m 1.4M sq m 1.0M sq m
currently at 6.5 million sq m
of leasable space. West Pop. Central Pop. East Pop.
2.0M 1.6M 1.1M

Supply
1.2M sq m

South Pop.
1.6M

11 Source: Colliers International Philippines Research

 Metro Manila Retail Vacancy
1Q 2017
Classification 4Q 2016 1Q 2017
Super Regional 0.54% 0.56% 99.98%

Regional 0.83% 1.40% 99.42%

99.27%
99.77%
99.92%
99.8% 98.61%
99.87%
99.95%
95.96%
99.6%
99.8% 99.27% 97.57%

99.6% 99.9%
Super regional and regional malls
at near full occupancy 99.7%
.
Overall vacancy at about 7.3% if
vacancy of smaller formats is
factored in.
99.75% 99.95%

98.07%

13 Source: Colliers International Philippines Research

*SUPER REGIONAL
**REGIONAL
 Retail Vacancy Forecast
600,000 20%
530,000
18%
500,000
16%

14%
400,000
12%
GLA, sq m

300,000 10%
9.1%
8%
200,000
6%

4%
100,000
2%

- 0%

2017F
2013

2016
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012

2014
2015
New Supply During Year (LHS) Vacancy at Year-End (RHS)

14 Source: Colliers International Philippines Research

 Retail Sector
Key Issues

Store closures in
US could affect
the operations of Diminishing
Philippine uniqueness of
franchises in the anchor tenants
long run

Major franchise
holder of luxury
brands
experiencing net
closure

15
 Metro Manila Retail Rents
1Q 2017
Comparative Average Retail Rents
(PHP / sq m / month)

%Change %Change
Location 3Q 2016 1Q 2017 1Q 2018F
(HoH) (YoY

Ayala Center 1,535 1,558 1.5% 1,602 2.8%

Ortigas Center 1,376 1,390 1.0% 1,423 2.4%

Retail rent growth will remain steady in major CBDs due to strong demand, but will be
capped at around 2%-3% in 2017 to account for the increase in supply.

16 Source: Colliers International Philippines Research

 Completed Projects
4Q 2016 to 1Q 2017
ORTIGAS CENTER
ORTIGAS FRINGE
The 30th Mall
SM City East Ortigas (28,000 sq m)
(80,000 sq m) Ayala Land
SM Prime

FORT BONIFACIO
MANILA BAY AREA BHS Central Ear Lot
(3,000 sq m)
Solaire Retail Complex Ayala Land
(5,000 sq m)
Bloomberry Resorts Venice Pizza Mall-Phase 2
(20,000 sq m)
Megaworld

ALABANG
South Park District Mall
(47,000 sq m)
Ayala Land

About 180K sq m GLA were

17 Note: Figures in gross leasable area (GLA).
completed from 4Q 2016 to
Source: Colliers International Philippines Research
1Q 2017.
 Upcoming Projects
2017 to 2020
QUEZON CITY
Vertis North Retail (47,000 sq m), Ayala Land

ORTIGAS FRINGE
MAKATI FRINGE &
ROCKWELL CENTER Feliz Town Center (80,000 sq m), Ayala Land
Paragon Center (20,000 sq m), Ortigas&Company
Circuit Mall Phases 1&2 (58,000 sq m), Ayala Land
Powerplant Mall-Expansion Phases 1&2
(5,000 sq m), Rockwell Land ORTIGAS CENTER
MAKATI CBD The Podium-Expansion (22,000 sq m), SM-Keppel Land

CityGate Retail (10,000 sq m), Ayala Land

Ayala Triangle-Retail Expansion (9,000 sq m), Ayala Land
One Ayala Retail (54,000 sq m), Ayala Land

MANILA BAY AREA FORT BONIFACIO

SM Mall of Asia-Expansion (200,000 sq m), SM Prime
Blue Wave Mall-Phases 1&2 (30,312 sq m), Federal Land Big Apple Mall (15,000 sq m), Federal Land
Bay Area Mall-Phases 1&2 (232,000 sq m), Ayala Land One Bonifacio High Street (21,000 sq m), Ayala Land
Park Triangle Retail (24,000 sq m), Ayala Land

ALABANG
Southvale Retail (6,000 sq m), Ayala Land

About 273K sq m GLA is

expected to be delivered
annually from 2017 to 2020.
18 Note: Figures in gross leasable area (GLA).
Source: Colliers International Philippines Research
 Retail Sector Opportunities
Food and Beverage

30%- 7%
Average growth of
50% F&B spending P.A.

Share of F&B to
total retail space 70%
Share of household
spending to GDP

40% USD
Share of F&B to
household
31.5
spending billion, projected
OFW remittances in
2017

19
 Retail Sector Opportunities
Online Shopping

34.5%
SM Group’s
stake in 2Go

49%
Ayala Group’s
stake in Zalora
11% PH 40%
Smartphone
Credit card penetration in the
penetration Philippines in 2015

70%
3.5% Projected
make purchases smartphone
online ownership rate by
2018

20
 Retail Sector Opportunities
Millennial Spending

70%
of the Philippine
workforce will be
millennials and
44% next gen by 2030

Share of
millennials to the
Philippine labor
force 1.3
Million Filipino
freelancers –
potential market
for co-working
25th
PH’s rank in terms of
space in malls biggest spenders on
travel
(out of 50 countries)

21
Commercial Metro Manila

Office Office Sector Opportunities

 Office Sector in a Nutshell

BPO share
declines, but
sustained by
traditional
companies

Developers
need to adapt
with flexibility

23
 Metro Manila Office Stock
As of 1Q 2017

QUEZON CITY*
6.7% YoY
MANDALUYONG 880K
sq m
0.0% YoY ORTIGAS CENTER

1.578M 1% YoY
MAKATI CBD 306K
sq m
sq m MAKATI FRINGE
0.0% YoY
221K 9.4% YoY
sq m
MANILA BAY AREA
FORT BONIFACIO
25.4% YoY
347K 3.21M
sq m 22.3% YoY
sq m 1.583M
sq m

ALABANG
• Total Metro Manila stock
6.2% YoY is 8.97M sq m of leasable
483K
sq m office space (6.0% YoY).
• It will reach 12.69M sq m
by end-2020.
24 *Includes Araneta Center, C-5 Corridor, Eastwood City, and North EDSA Triangle.
Note: Figures in gross leasable area (GLA). Percentages indicate %change (YoY) from 1Q 2016.
Source: Colliers International Philippines Research
 Metro Manila Office Supply Forecast
As of 1Q 2017, in sq m

%Change
Location As of 2016 2017F 2018F 2019F 2020F TOTAL
(2016-2020)

Alabang 483,100 55,300 59,200 64,700 38,900 701,300 45%

Fort Bonifacio 1,533,700 372,900 238,100 246,700 32,900 2,424,500 58%

Makati CBD 3,207,000 28,400 38,900 90,600 193,800 3,558,800 11%

Makati Fringe 221,300 25,300 61,000 - 120,700 428,400 94%

Mandaluyong 305,900 58,300 90,400 - - 454,700 49%

Manila Bay Area 330,600 70,300 175,100 169,200 135,700 881,000 167%

Ortigas Center 1,578,000 78,400 43,300 103,100 345,400 2,148,400 36%

QC 853,600 100,300 197,600 265,500 43,300 1,460,500 71%

Others 354,500 48,100 73,500 90,900 64,800 632,100 78%

Total 8,868,200 837,600 977,400 1,030,900 975,800 12,690,000 43%

About 955,400 sq m GLA are expected to be completed every year from 2017 to 2020.
25 Source: Colliers International Philippines Research
 Metro Manila Office Completions
1Q 2017

QUEZON CITY*
Panorama
OTHERS-MANILA Technocenter
ETY Building (26,300 sq m)
(8,600 sq m)

MANILA BAY AREA

FORT BONIFACIO
Biopolis
(16,100 sq m) Six West Campus
(9,200 sq m)

Eight West Campus

(10,700 sq m)

Ore Central
(29,900 sq m)

About 101K sq m GLA were

PAB delivered in 1Q 2017.
26 *Includes Araneta Center, C-5 Corridor, Eastwood City, and North EDSA Triangle.
Note: Figures in gross leasable area (GLA).
Source: Colliers International Philippines Research
 Metro Manila Office Movements
1Q 2017 Transactions

QUEZON CITY*
15K Government agency
sq m
ORTIGAS FRINGE Task Us

Teledirect
Logical Source One
12K
ORTIGAS CENTER
sq m
Indofil Industries Philippines
WhiteSky Labs
MAKATI CBD 22K
sq m
Direct Click MAKATI FRINGE
Novartis
14K
Pentair
sq m
PCSO
16K
sq m
FORT BONIFACIO
MANILA BAY AREA 49K
Offshore gambling company
sq m
Offshore gambling company 25K Republic Cement
Compass
2GO
CJ Korea
sq m Shopee
Energy corporation

ALABANG
Offshore gambling company
Essilor
WNS
34K
About 187K sq m GLA were
sq m
transacted in 1Q 2017.
27 *Includes Araneta Center, C-5 Corridor, Eastwood City, and North EDSA Triangle.
Note: Figures in gross leasable area (GLA).
Source: Colliers International Philippines Research
 Metro Manila Office Transactions
2016 vs. 1Q 2017

10%

30%
9%
FY2016 Transactions KPO
21% 38%
Non-BPO

1Q2017 Transactions Voice

Gaming

32% 49%
11%

• More diversified demand profile sustains office market.

• A significant shift in volume mix was seen with BPO share representing only 21% of total
transactions for the quarter from a high of 60% in FY 2016.

28 Source: Colliers International Philippines Research

 Metro Manila Office Supply & Demand
2005 to 2017F
900,000 10%

800,000
Vacancies expected to rise in 9%
2017 as supply reaches record
8%
700,000 completions.
7%
600,000
6%
GLA (sq m)

500,000
5%
400,000 4.5%
4%
300,000 3.4%
2.9% 3%
200,000
2%

100,000 1%

- 0%

2017F
2006
2005

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016
New Supply During Year (LHS) Demand During Year (LHS) Vacancy at Year-End (RHS)

29 Source: Colliers International Philippines Research

 Rental Range and Vacancy per Location
Overall vacancy at 3.58%
Quezon City Makati CBD

Premium
600-900 14% 14% 1% 1%
1,200-1,750
550-800 1,100-1,660
Non-premium
700-1,300
Ortigas CBD 600-1,100

700-900 1% 1%
Makati Fringe
675-750
850 -1,200 9% 13%
Ortigas Fringe 650-1,100

600-750 2% 3%
480-600
Fort Bonifacio
Manila Bay Area BGC 4% 3%
850 -1,500
700-850 1% 1% 825-1,400
McKinley Hill
635-725
800-900
700-850
LEGEND North Bonifacio
Primary Business Secondary Business 850-1,350
District District 825-1,000

Rents in PHP per sqm

Headline Alabang

650-700 5% 6%
Q1 2017 4Q 2016
Vacancy Vacancy 590-700

Source: Colliers International Philippines Research

QoQ Change
 Average Rental Rates
2016 vs. 2017F Change

1,600

1,400 1,418
1,320
1,200

983
PHP / sq m / month

1,000 940
987
919
800
768
692
720
600 692

400

200

0
2005

2009

2017F
2001

2002

2003

2004

2006

2007

2008

2010

2011

2012

2013

2014

2015

2016
MCBD P MCBD A FB A OC A MBA A

32 Source: Colliers International Philippines Research

 Makati CBD
Office Supply, Demand & Rents

Vacancy 4Q 2016 1Q 2017 Rental Rate

%Change Capital Value
Grade (PHP / sq m /
QoQ (PHP / sq m)
Premium 1.06% 1.13% month)

Premium 1,200 – 1,700 2.22% 189,200

Grade A 1.06% 1.33%
Grade A 700 – 1,300 0.82% 125,100
Grade B 1.84% 1.49%
Grade B 620 – 880 1.86% 91,900
All Grades 0.85% 0.94%
Overall vacancy in Makati CBD slightly
went up due to increases in vacant Rents in Makati CBD are anticipated to grow between 5%
spaces in Premium and Grade A and 7% in the next 12 months as vacated spaces are
buildings such as Enterprise Center, easily leased out.
Philamlife Tower, 6750 Building, and
Ayala Life-FGU Insurance Center.

 Projects slated for completion in the

next four years:
 2017: Insular Life Building (19,400 sq m)
 2018: CityGate HQ Office (19,500 sq m)
 2019: E West Pod (11,100 sq m)
 2020: Alveo Financial Tower (43,000 sq m)

33 Source: Colliers International Philippines Research

 Fort Bonifacio
Office Supply, Demand & Rents

Vacancy 4Q 2016 1Q 2017 Rental Rate

%Change Capital Value
Grade (PHP / sq m /
QoQ (PHP / sq m)
Grade A 1.16% 5.80% month)

Grade A 840 – 1,500 3.85% 144,400

Grade B 5.82% 5.45%
Grade B 680 - 940 1.67% 92,600
All Grades 2.85% 3.77%
Overall vacancy increased with the
completion of Ore Central, adding up to Colliers expects rents to continue growing between 5% to
total vacant spaces of Grade A 7% over the next 12 months given strong demand from
buildings. This was despite the take-up traditional companies and offshore gambling.
in Net-1 Center, Net Park, SM Aura, and
Trade and Financial Tower.

 Projects slated for completion in the

next four years:
 2017: Alliance Global Tower (53,100 sq m)
 2018: The Finance Center (56,800 sq m)
Vista Campus Tower 1 (22,100 sq m)
 2019: World Commerce Plaza (105,300 sq m)
 2020: Alveo Park Triangle Tower (32,900 sq m)

34 Source: Colliers International Philippines Research

 Ortigas Center
Office Supply and Demand

Vacancy 4Q 2016 1Q 2017 Rental Rate

%Change Capital Value
Grade (PHP / sq m /
QoQ (PHP / sq m)
Grade A 0.26% 0.12% month)

Grade A 700 - 900 1.48% 93,100

Grade B 1.06% 6.56%
Grade B 460 – 790 2.17% 78,500
All Grades 0.11% 0.90%
The increase in overall vacancy was
driven by vacated spaces in Hanston Rents are expected to grow between 3% and 5% in the
Building, Galleria Corporate Center, next twelve months given the low vacancy and limited
and Benpres Building, among others. upcoming supply

 Projects slated for completion in the next

four years:
 2017: 30th Corporate Center (45,500 sq m)
 2018: Cyberscape Gamma (43,300 sq m)
 2019: BDO-Keppel Land Office Tower (89,000 sq m)
 2020: One Filinvest (41,300 sq m)
 SM Mega Tower (89,000 sq m)

35 Source: Colliers International Philippines Research

 Manila Bay Area
Office Supply and Demand

Vacancy 4Q 2016 1Q 2017 Rental Rate

%Change Capital Value
Grade (PHP / sq m /
QoQ (PHP / sq m)
Grade A 0.00% 0.12% month)

Grade A 700 – 850 5.35% 99,000

Grade B 1.06% 6.56%

All Grades 0.11% 0.98% Rents are expected to increase between 8% and 10% in
The increase in overall vacancy was
the next twelve months as Manila Bay Area leads all
driven by the significant vacant space submarkets with the largest volume of transactions
recorded in Mall of Asia Annex Building recorded, notably by offshore gambling companies and
and the completion of Biopolis. traditional companies.

 Projects slated for completion in the next

four years:
 2017: Meridian Park 1 (34,000 sq m)
iMet BPO (20,300 sq m)
 2018: Meridian Park 2&3 (61,200 sq m)
Three E-com Center (61,000 sq m)
 2019: Aseana Four (60,000 sq m)
Filinvest Pasay Cyberzone A (13,600 sq m)
Meridian Park 4 (28,000 sq m)
 2020: Filinvest Pasay Cyberzone D (19,700 sq m)
South West Integrated Terminal System Tower 3
(16,800 sq m)

36 Source: Colliers International Philippines Research

 PEZA
Key Issues
PEZA-Proclaimed Buildings
June 2016-May 2017

BUILDING LOCATION PEZA Initiatives according to Director General

Charito Plaza
Metro Manila (7)
Ben-Lor IT Center Quezon City • DG Plaza personally follows up on the 40
Capella IT Center Muntinlupa City pending PEZA proclamations with the Office
of the President
Cyber Sigma Taguig City
Cyberscape Gamma Taguig City • The government is committed to keeping
current policies and incentives for locators
Kayumanggi Center Quezon City
Rack IT Data Center Parañaque City • PEZA is pushing for the exclusion of PEZA
accredited locations from the removal of the
UP Town Corporate Center Quezon City zero-vat rating envisioned in the draft of the
Provincial (5) Tax Reform Law.

Avenir Cebu City, Cebu • PEZA intends to free PEZA-proclaimed

Brooke's Point Economic Zone Brooke's Point, Palawan buildings from illegitimate offshore
Garden Plaza Sta. Rosa, Laguna gambling companies disguising themselves
as BPOs and illegally availing of PEZA
Starmall Bataan (BPO) Balanga, Bataan incentives.
The North Park Mandaue City, Cebu

37 Source: Philippine Economic Zone Authority

 Office Sector Opportunities
PEZA Delays

40% 40
Pending PEZA
of buildings due applications
in 2017 are PEZA with the Office
proclaimed of the President
More
PEZA-
proclaimed
No PEZA pushing to
buildings
expected in 2H
Change keep
2017

in PEZA zero-rated
incentives as DG
Plaza commits VAT
to same brand of Incentive for
service locators
38
 Office Sector Opportunities
BPO Slowdown, Traditional Share Growth

21% 49%
share of BPOs in From non-BPOs,
volume of including
transactions in government
1Q 2017 agencies Consider
provincial
locations to
avail incentives
and meet
demand
Major BPO Allow
firm won division of
new office
accounts floors
triggering to cater to the
potential growing demand
expansions from non-BPOs
39
 Office Sector Opportunities
Flexible Workspace

228,000
Over 1 million
Micro, small and sq m
medium Stock of flexible
enterprises workspace in Metro
Manila and growing
at 10% pa.

1.3 million 70%

Number of Projected share of
freelancers in the millennials and
Philippines next gen in the
labor force by 2030

40
 Metro Manila
Pre-selling Market

Residential Metro Manila Secondary

Market Market

Residential Sector
Opportunities
 Residential Sector in a Nutshell

Developers
continue to pre-
sell more units,
further
increasing Rents continue
prices across to decline as
markets but…. units are
completed at
record levels.

42
 Metro Manila Vertical Condominium Market
Pre-Selling Residential Market
Launches in Metro Manila continued to drop in 1Q17 (-36% YoY) while take-up increased (29% YoY)

70,000

59.5 K
60,000
53.5 K
51.6 K
50,000
42.6 K 41.8 K
39.6 K
40,000 36.9 K
units

34.4 K 33.7 K
32.6 K
30,000

20,000

10.7 K
10,000
5.9 K

-
2012 2013 2014 2015 2016 1Q 2017

Launches Take-up

43 Source: Colliers International Philippines Research

 HLURB License to Sell
January to March, 2017

Jan-Mar Jan-Mar %Change

Segment
2016 2017 (YoY)

• LTS issued for Balanced Housing Compliance Units 9,104 6,466 -29%
socialized to mid- Socialized Housing 6,816 2,299 -66%
income housing
Economic Housing 13,845 9,223 -33%
developments
dropped. Mid-Income Housing 1,566 1,438 -8%
Open Market Housing 11,904 8,879 -25%
• Low-cost to high-end
Low-Cost Condominium 1,365 2,454 80%
condominium picked
up in 1Q 2017. Mid- and High-End Condominium 12,805 23,069 80%
Commercial Condominium 991 464 -53%
• No LTS issued for
farmlot and industrial Farmlot - - -
subdivisions. Memorial Park 21,459 39,664 85%
Industrial Subdivision - 208 -
Commercial Subdivision 141 11 -92%
Total (Philippines) 85,470 106,604 25%

44 Source: Housing and Land Use Regulatory Board (HLURB); Colliers International Philippines Research
 Metro Manila Residential Stock
As of 1Q 2017

EASTWOOD CITY
7,500+ units
ORTIGAS CENTER 8%
16,700+ units ARANETA CENTER
4.5
18% % 4,200+ units
MAKATI CBD
ROCKWELL CENTER
20,200+ units 4.4
% 4,100+ units
MANILA BAY AREA
FORT BONIFACIO
10,900+ units 12% 24%
24,500+ units
26%

ALABANG
• More than 94,000 units are in
3,700+ units the market as of 1Q 2017.
4%
• By 2020, total inventory will be
more than 140,000 units.
45 Source: Colliers International Philippines Research
 Metro Manila Residential Supply Forecast
As of 1Q 2017 (in units)

%Change
Location As of 2016 2017F 2018F 2019F 2020F TOTAL
(2016-2020)

Alabang 3,700 900 820 - - 5,500 46%

Araneta Center 4,200 300 - - - 4,500 7%

Eastwood City 7,500 980 - 630 - 9,100 21%

Fort Bonifacio 24,200 8,500 3,800 3,000 - 39,700 64%

Makati CBD 21,600 4,700 1,000 590 330 28,400 31%

Manila Bay Area 8,800 5,500 8,500 2,600 2,100 27,600 212%

Ortigas Center 16,200 1,400 780 570 610 19,700 21%

Rockwell Center 4,100 - 340 760 - 5,200 27%

Total 90,700 22,500 15,400 8,100 3,100 140,000 54%

About 49,100 units are expected to complete from 2017 to 2020.

46 Source: Colliers International Philippines Research
 Metro Manila Residential Completions
1Q 2017

ORTIGAS CENTER
CDC Millenium Ortigas
MAKATI CBD (128 units)
Valero Grand Suites
(220 units) The Pearl Place-Tower
B (412 units)

MANILA BAY AREA

FORT BONIFACIO
Breeze Residences
(2,133 units) The Venice Luxury
Residences-Emanuele
(244 units)

Five buildings were

completed in 1Q 2017. Two-
thirds of which came from the
emerging Manila Bay Area
PAB with a total of 3,147 units.
47 Source: Colliers International Philippines Research
 Comparative Residential Rents
Premium 3-BR Units
1,200

1,000
942
903 899
869 848
808 843
PHP / sq m / month

800 815
847
805 838 810
600

400

200

1Q16

2Q16

3Q16

4Q16

1Q17

1Q18F
2Q17F

3Q17F

4Q17F
2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014
Fort Bonifacio Makati CBD 2015
Rockwell Center

48 Source: Colliers International Philippines Research

 Comparative Residential Capital Values
Premium 3-BR Units
250

215
200 198 201
164 180 185
PHP / sq m (‘000)

150 162 168

149 149
149
142
100

50

1Q16

2Q16

3Q16

4Q16

1Q17

2Q17F

3Q17F

4Q17F

1Q18F
2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

Fort Bonifacio Makati CBD 2015

Rockwell Center

49 Source: Colliers International Philippines Research

 Makati CBD
High-Rise Residential Supply, Demand, & Rates

Grade 4Q 2016 1Q 2017 5,000 18%

4,500 16%
4,000 14%
Premium 13.98% 15.47% 3,500

No. of Units
12%
3,000
10%
Grade A 10.94% 10.99% 2,500
8%
2,000
1,500 6%
Grade B 17.65% 18.25% 1,000 4%
500 2%
All Grades 13.29% 13.65% - 0%

2017F
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
Increase in premium and Grade B vacancies drove
the overall vacancy in Makati CBD.
New Supply During Year (LHS) Take-up During Year (LHS)
Vacancy at Year-End (RHS)

Expected deliveries for the rest of 2017: %Growth %Growth

Prime 3-BR 1Q 2017 1Q 2018F
• Greenbelt Hamilton 1 (425 units) (QoQ) (YoY)
• The Stratosphere (336 units) Rent 560 – 1,080 -1.64% 550 – 1,070 -1.29%
• Shang Salcedo Place (488 unita) (PHP / sq m / month)
• Park Terraces 3 (370 units)
• Salcedo Square (380 units) Capital Value 97,400 – 274,500 3.19% 108,000 – 304,200 10.80%
(PHP / sq m)
• Signa Designer Residences 2 (350 units)
• Kroma Tower (815 units)
• Paseo Heights (320 units)
• Three Central (672 units)

50 Source: Colliers International Philippines Research

 New Project: Park Central Towers-South Tower
Currently Most Expensive Residential in the Market

281 84%
units launched sold or 24 units
in June 2016 per month

P251K
P66M 218 average price
average total per sq m,
sq m, average currently the
contract price unit size
per unit highest in Metro
Manila

51
 Fort Bonifacio
High-Rise Residential Supply, Demand, & Rates

Grade 4Q 2016 1Q 2017 9,000 14%

8,000
12%
7,000
Premium 13.21% 14.81% 10%
6,000

No. of Units
5,000 8%
Grade A 10.83% 11.97% 4,000
3,000 6%
Grade B 12.98% 11.73% 2,000 4%
1,000
All Grades 11.71% 12.38% 2%
-

2017F
2011
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010

2012
2013
2014
2015
2016
(1,000) 0%
Occupancy in Fort Bonifacio improved especially
among Grade B condominiums. This offset the
uptick in vacancies of more expensive units. New Supply During Year (LHS) Take-up During Year (LHS)
Vacancy at Year-End (RHS)

Expected deliveries for the rest of 2017: %Growth %Growth

Prime 3-BR 1Q 2017 1Q 2018F
• Central Park West (356 units) (QoQ) (YoY)
• Grand Hyatt Residences (209 units) Rent 630 – 1,000 -1.86% 610 - 980 -1.96%
• Venice Luxury Residences-Fiorenzo (224 units) (PHP / sq m / month)
• The Maridien at HS South 1&2 (1,074 units)
• The Sequioa at Two Serendra (618 units) Capital Value 110,500 – 235,500 2.73% 118,300 – 252,200 7.09%
(PHP / sq m)
• Viceroy McKinley Hill 2&3 (608 units)
• Avida Cityflex Towers BGC 1&2 (960 units)
• Avida Towers BGC 34th Street 1&2 (1,334 units)
• Avida Towers Verte (562 units)
• Madison Park West (851 units)
• One Uptown Residences N&S(1,176 units)
• Uptown Ritz Residences (340 units)
52 Source: Colliers International Philippines Research
 Rockwell Center
High-Rise Residential Supply, Demand, & Rates

Grade 4Q 2016 1Q 2017 1,600 12%

1,400
10%
Premium 8.02% 8.70% 1,200
1,000
8%

No. of Units
Grade A 8.09% 10.11% 800
600 6%
All Grades 8.03% 8.92% 400
4%
200
Only a marginal increase in overall vacancy was
recorded in 1Q 2017. Premium units continue to -
2%

2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017F
record healthy occupancies. (200)
(400) 0%
New Supply During Year (LHS) Take-up During Year (LHS)
Vacancy at Year-End (RHS)

No expected deliveries for the rest of %Growth %Growth

Prime 3-BR 1Q 2017 1Q 2018F
(QoQ) (YoY)
2017. Meanwhile, the five towers of The
Proscenium by Rockwell Land are Rent 760 – 1,050 -2.15% 760 – 1,030 -1.24%
(PHP / sq m / month)
expected to complete from 2018-2021
with a total of 1,647 units. Capital Value 186,500 – 218,600 2.30% 201,800 – 236,500 8.18%
(PHP / sq m)

53 Source: Colliers International Philippines Research

 Ortigas Center
High-Rise Residential Supply, Demand, & Rates

Grade 4Q 2016 1Q 2017 3,000 18%

2,500 16%
Premium 8.77% 10.11% 14%
2,000
12%

No. of Units
Grade A 4.00% 4.59% 1,500 10%
1,000 8%
Grade B 7.36% 6.84% 6%
500
4%
All Grades 6.59% 6.61% - 2%

2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017F
Overall vacancy in Ortigas Center was relatively (500) 0%
flat at 6.6%. This was driven by significant take-up
of Grade B condominiums. New Supply During Year (LHS) Take-up During Year (LHS)
Vacancy at Year-End (RHS)

Expected deliveries for the rest of 2017: Grade A %Growth %Growth

1Q 2017 1Q 2018F
• The Currency (326 units) 3-BR (QoQ) (YoY)
• Zitan (342 units) Rent 350 - 640 -2.73% 340 - 610 4.31%
• The Sapphire Residences-East Bloc (161 units) (PHP / sq m / month)
• Avant Garde Residences (120 units)
Capital Value 66,900 – 157,500 4.31% 66,900 – 157,500 0.05%
(PHP / sq m)

54 Source: Colliers International Philippines Research

 New Project: Residences at Westin Manila Sonata Place
Most Expensive in Ortigas

110 39%
units launched sold or 10 units
in July 2016 per month

P22M P178K
average total 129 average price
per sq m, the
contract price sq m, average most expensive
per unit unit size in Ortigas

55
 Manila Bay Area
High-Rise Residential Supply, Demand, & Rates

Grade 4Q 2016 1Q 2017 8,000 18%

7,000 17%
17%
Grade A 3.93% 2.66% 6,000
16%

No. of Units
5,000 16%
Grade B 16.83% 18.72% 4,000 15%
3,000 15%
14%
All Grades 14.26% 15.29% 2,000
14%
1,000 13%
Grade B condominiums drove the overall vacancy
- 13%
of Manila Bay Area. This was due to the

2017F
2008
2007

2009

2010

2011

2012

2013

2014

2015

2016
completion of a significant number of new Grade
B units.

New Supply During Year (LHS) Take-up During Year (LHS)

Vacancy at Year-End (RHS)

Expected deliveries for the next three to Grade B %Growth %Growth

1Q 2017 1Q 2018F
3-BR (QoQ) (YoY)
four years:
• Bayshore Residential Resort 1,2,5,&6 (446 units) Rent 620 -0.87% 601 -3.03%
• Shore Residences 1&2 (1,886 units) (PHP / sq m / month)

• Monarch Parksuites-Balmoral&Windsor
Capital Value 101,700 1.39% 104,900 3.11%
(742 units) (PHP / sq m)
• Six Senses Resort I-Sight Tower (152 units)
• Six Senses Resort I-Tune Tower (148 units)

56 Source: Colliers International Philippines Research

 New Project: Oak Harbor Residences
DMCI’s First Luxury Development

418 86%
units (three
sold or 104 units
towers)
per month
launched in
February 2017

P13M
average total
contract price
93 P145K
sq m, average average price
per unit. DMCI’s
unit size per sq m
most expensive
to-date

57
 Residential Sector Opportunities
Demand for Luxury Developments

Manila Bay Area is

the preferred
location due to its 90-95%
Close to to
proximity 1 the occupancy in a
millionand
airport MSMEs
casino- number of
as of 2014
hotels luxury projects
in CBDs

A number of
Take up is driven affordable to
by expats and mid-segment
So far, PAGCOR
affluent familiesApproximately developers are 35
has issued
looking for units 1.3 million nowgaming
venturing
licenses
Go Negosyo Act
Accounted for Filipino
9% into luxury
to stay and with each
of 2014 firm
set to
of total lease
freelancers projects
invest in requiring
supportat least
MSMEs
transactions intoday
Metro Manila in 10,000 sq m of
2016 space

58
 Residential Sector Opportunities
AirBnB Market (Short-term Lease)

A fraction of an

6.6 estimated 1M
million foreign OFWs who spend
tourists this year vacation in the
to fuel demand country expected
to book AirBnB
for AirBnB
market

18 Appeals to
millennials who
million domestic heavily use
tourists in 2017 “shared
to partially drive economy”
demand for services such as
short-term lease AirBnB
of condo units
59
Randwil Dinbo Macaranas
Senior Research Manager| Philippines
+632 858 9047
[email protected]

Colliers International | Philippines

11/F Frabelle Business Center
111 Rada Street Legaspi Village
Makati City | Philippines
TEL +63 2 888 9988
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