2Q 2013 MARKET OVERVIEW RESEARCH & FORECAST REPORT PHILIPPINE REAL ESTATE MARKET Executive Summry ECONOMY The Philippines is benefitting from period of politicl stbility with economic growth ccelerting. The country s GDP significntly grew to 7.8% in 1Q 2013, bove the mrket consensus of pproximtely 6.0%. Strong domestic expenditures led the mnufcturing sector to grow by 9.7%, while investments in construction grew by double digits for the fourth consecutive period. Due to helthy business climte bcked by solid mcroeconomic environment, the mjority of economists expect the country s GDP to grow between 6.5 nd 7.0% in 2013. OFFICE In 2Q 2013, the Grde A office vcncy rte in the Mkti CBD incresed substntilly to 7.8% versus the 2.1% recorded the previous qurter minly result of the low tkeup rte registered in Alphlnd Mkti Tower. Despite the increse, the strong demnd in the Premium nd Grde B segments reduced the overll vcncy rte in the district, which settled t the sub4.0% level. The rentl rte in the district is expected to increse between 5 nd 7% in 2Q 2014, s tkeup is estimted to buildup midst the lck of pproprite spce. MARKET INDICATORS OFFICE RESIDENTIAL HOTEL & LEISURE INDUSTRIAL RESIDENTIAL In ll five submrkets trcked by Colliers, n verge of 6,225 highrise residentil units re expected to be completed nnully, leding to totl supply of over 78,000 units by the end of 2016. The Mkti CBD nd BGC will hve the strongest supply pipeline, collectively representing 60% of new stock in the five submrkets over the next four yers. While lesing trnsctions remin strong in premium residences, lessors of the smller unit segments in BGC find hevy competition in ttrcting tennts, resulting in wekened brgining cpcities. The sking rentl rtes for studio nd onebedroom units in BGC dropped by nerly 6% QoQ to PHP780 per sq m. HOTEL & LEISURE Hrnessing the growing opportunities in the tourism industry, rel estte firms confidently venture into the hotel nd leisure businesses with vrious plns currently lid out. Metro Mnil lone nticiptes n verge of 4,200 new rooms nnully from to 2014 to 2016. Additionlly, in the rest of the country, over 10,000 hotel rooms re underwy, set to be completed in the spn of four to five yers. However, despite the strong business environment, hotel room rtes in Metro Mnil grew only t modest rte in the 1H13 owed to tightened mrket resulting from the incresing number of hotel developments. INDUSTRIAL Expnsions re strting to be implemented in vrious economic zones in Cvite, Lgun nd Btngs, with their PEZA ccredittion currently in process. This recent development indictes growing requirements in the mnufcturing industry bcked by fvorble investment climte. Averge lnd lese hold rte in ll of Cvite in the region incresed significntly by 29%, while lese rtes for wrehouse nd logistics fcilities improved by 1.7%. www.colliers.com
PHILIPPINES 2Q 2013 THE KNOWLEDGE At constnt price b Agriculture, Hunting, Forestry, Fishing c t constnt 2006 prices ECONOMIC INDICATORS 2007 2008 2009 2010 2011 2012 1Q 2013 Gross Ntionl Product 6.10 6.00 6.50 8.40 3.20 5.80 7.10 Gross Domestic Product 6.60 4.20 1.10 7.60 3.90 6.60 7.80 Personl Consumption Expenditure 4.60 3.70 2.30 3.40 6.10 6.10 5.10 Gov t Expenditure 6.90 0.30 10.90 4.00 1.00 11.80 13.20 Cpitl Formtion 0.50 23.40 8.70 31.60 8.10 4.40 17.90 Exports 6.70 2.70 7.80 21.00 4.20 8.70 7.00 Imports 1.70 1.60 8.10 22.50 0.20 4.20 1.60 AHFF b 4.70 3.20 0.70 0.20 2.70 2.70 3.30 Industry 5.80 4.80 1.90 11.60 2.30 6.50 10.90 Services 7.60 4.00 3.40 7.20 5.10 7.40 7.00 Averge Infltion c 2.90 8.30 4.10 3.90 4.60 3.20 3.20 Budget Deficit (Billion Pesos) (PHP12.4) (PHP68.1) (PHP298.5) (PHP314.4) (PHP197.7) (PHP242.8) (PHP66.4) P:US$ (Averge) P46.1 P44.7 P47.6 P45.10 P43.31 42.09 P41.7 Averge 91Dy TBill Rtes 3.40 5.20 4.00 3.70 1.37 1.58 Source: Ntionl Sttisticl Coordintion Bord, Bngko Sentrl ng Pilipins, Bureu of Tresury In Million US Dollrs 25,000 15,000 10,000 5,000 2001 OFW Remittnces 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 1Q 2Q 3Q 4Q Source: Bngko Sentrl ng Pilipins s of April 2013 ECONOMY The Philippines is benefitting from period of politicl stbility with economic growth ccelerting. The country s GDP significntly grew to 7.8% in 1Q 2013, bove the mrket consensus of pproximtely 6.0%. This ws the highest in the region, exceeding Chin (+7.7%), Indonesi (+6.0%), Thilnd (+5.3%), Indi (+5.0%) nd Vietnm (+4.9%), mong others. The stellr GDP growth in the first qurter ws highly ttributed to the increse in government nd consumer spending, s well s the robust performnce of the mnufcturing nd construction industries. Strong domestic expenditures led the mnufcturing sector to grow by 9.7%, while investments in construction grew by double digits for the fourth consecutive period trnslting into 32.5% increse in 1Q 2013. Consumer spending remins the min growth contributor, comprising pproximtely 80% of the qurter s totl GDP. Consequently, strong locl demnd will be continully buoyed by benign infltion (3%), lltime low lending rtes (5 8%), nd the sustined inflow of OFW remittnces, which reched US$6.9 billion (+5.7%) from Jnury to April of this yer. Menwhile, the recent investment upgrdes from S&P nd Fitch hve led to heightened level of interest mong foreign investors nd more upbet business nd consumer sentiment. Due to this helthy business climte bcked by solid mcroeconomic environment, the mjority of economists expect the country s GDP to grow between 6.5 nd 7.0% in 2013, up from the previous projections of 6.0%. However, the recent quntittive esing in the U.S. might signl n increse in domestic interest rtes which will possibly hmper growth moving forwrd. P. 2 COLLIERS INTERNATIONAL
PHILIPPINES 2Q 2013 THE KNOWLEDGE pesos per squre meter 400,000 300,000 200,000 100,000 Mkti CBD, Ortigs & Fort Bonifcio Averge Lnd Vlues LAND VALUES Implied lnd vlues in the Mkti CBD pprecited by 2.0% in 1Q 2013, resulting in n verge price of PHP304,230 per sq m or n ccommodtion vlue of PHP19,015 per sq m. Ortigs lnd vlues grew t reltively mrginl rte of 1.7%, pegged t n verge of PHP138,395 per sq m. In BGC, lnd vlues sustined doubledigit growth nnully, currently with n verge ccommodtion vlue of PHP24,690 per sq m. Lnd vlues in both Mkti nd BGC re expected to grow between 8 nd 9% in 2Q 2014, while 6.4% increse is estimted in Ortigs Center. 2Q98 2Q99 2Q00 2Q01 Mkti CBD BGC Ortigs Ctr units 160,000 140,000 1 100,000 80,000 60,000 40,000 HLURB Licenses 1Q00 3Q00 1Q01 3Q01 1Q02 3Q02 1Q03 3Q03 1Q04 3Q04 1Q05 3Q05 1Q06 3Q06 1Q07 3Q07 1Q08 3Q08 1Q09 3Q09 1Q10 3Q10 1Q11 3Q11 1Q12 3Q12 1Q13 Qurterly Approvls (LHS) 140,000 1 100,000 80,000 60,000 40,000 Moving 12Month Averge (RHS) Source: Housing nd Lnd Use Regultory Bord COMPARATIVE LAND VALUES PESO / SQ M 2Q 2013 1Q 2013 % CHANGE (QoQ) 2Q 2014F % CHANGE (YoY) MAKATI CBD 283,185 325,275 280,380 315,800 2.06 289,455 369,655 8.32 ORTIGAS CENTER 104,925 171,860 101,870 170,160 1.75 115,815 178,840 6.45 BGC 200,850 292,900 195,000 290,000 1.80 223,864 311,730 8.47 LICENSES TO SELL Overll residentil licenses issued by the HLURB incresed by 31% in 1Q 2013. The ltest figures indicte tht 46,502 units were licensed during this threemonth period, up by round 10,915 units compred to the sme period yer go. The increse ws minly driven by the growth of licenses issued in the highrise segment numbering 16,252 units, 67% higher thn in 1Q 2012. The licenses issued for socilized housing grew by 37% YoY with 10,427 units. While the pproved licenses in the socilized housing segment continue to increse, its growth rte slowed to 8.8% compred to its doubledigit increse in 2012. On the other hnd, despite the downwrd trend in the number of issued licenses for openmrket housing lst yer, it hs shown signs of recovery with growth registering t 7.3% YoY. HLURB LICENCES TO SELL UNITS 1Q 2013 1Q 2012 % CHANGE YoY Socilized Housing 10,427 7,588 37.4 LowCost Housing 13,914 12,791 8.8 OpenMrket Housing 5,909 5,509 7.3 HighRise Residentil 16,252 9,699 67.6 Commercil Condominium 471 67 603.0 Frm Lot 0 0 0.0 Memoril Prk 22,135 24,725 10.5 Industril Subdivision 0 0 0.0 Commercil Subdivision 16 57 71.9 Totl (Philippines) 69,124 60,436 14.4 Source: Housing nd Lnd Use Regultory Bord P. 3 COLLIERS INTERNATIONAL
PHILIPPINES 2Q 2013 OFFICE in squre meters in sq.m. 8,000,000 7,000,000 6,000,000 5,000,000 4,000,000 3,000,000 2,000,000 1,000,000 270,000 2 170,000 1 70,000 (30,000) (80,000) Mkti CBD vs. Metro Mnil Office Stock 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013F 2014F 2015F Metro Mnil Stock (LHS) Mkti CBD (Stock) (LHS) Totl Stock YoY Chnge (RHS) 16% 14% 12% Mkti CBD Office Supply nd Demnd 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2001 New Supply During Yer (LHS) TkeUp During Yer (LHS) Vcncy t Yer End (RHS) MAKATI CBD COMPARATIVE OFFICE VACANCY RATES (%) 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013F 2014F 8% 6% 4% 2% 0% 20% 15% 5% 0% 5% 1Q 2013 2Q 2013 2Q 2014F PREMIUM 5.83 4.88 3.29 GRADE A 2.13 7.88 5.69 GRADE B & BELOW 3.25 1.88 2.97 ALL GRADES 3.38 3.53 3.58 OFFICE SECTOR Supply Over 560,000 sq m of new office spce is set to be delivered in Metro Mnil this yer; nerly hlf were lredy introduced in 1H 2013. Four new office buildings were completed in 2Q 2013, equivlent to more thn 69,000 sq m of net usble spce. The delivery of these new buildings depicts further expnsions in cmpustype developments such s the ddition of Science Hub 4 (18,800 sq m) nd 8 Cmpus Plce Tower 2 (6,730 sq m) in McKinley Hill, nd Building L (8,380 sq m) in UP Ayl Techno Hub ll buildings ctering to BPO compnies. On the other hnd, Alphlnd Mkti Tower, recently completed HQtype office in the Mkti CBD, ims to ttrct trditionl nd multintionl firms with pproximtely 38,000 sq m of lesble spce. Menwhile, the Mkti CBD s current office supply stnds t 2.8 million sq m nd will be t the sme level in the long term with no new office supply in the pipeline besides VCorporte Tower (28,900 sq m), scheduled to be completed in 2Q 2014. Outside the Mkti CBD, construction ctivity remins high with some 300,000 sq m of office spce bound to be delivered in the reminder of the yer. Moreover, demnd coming from the O&O industry continues to fuel office developments with some 400,000 sq m of new supply in ech of 2014 nd 2015. Demnd In 2Q 2013, the Grde A office vcncy rte in the Mkti CBD incresed substntilly to 7.8% versus the 2.1% recorded the previous qurter minly result of the low tkeup rte registered in Alphlnd Mkti Tower. Despite the increse, the strong demnd in the Premium nd Grde B segments reduced the overll vcncy rte in the district, which settled t the sub4.0% level. It is estimted tht the vcncy rte in the district will contrct to 3.0% by yerend but consequently esclte to 3.5% once VTower is completed in 2Q 2014. Rents The Mkti CBD strongly remins lndlords mrket s tkeup remins generlly high, tied to the lck of pproprite office spce. In 2Q 2013, verge premium rentl rtes grew by 3.5% QoQ to exceed the PHP1,000 per sq m monthly level, lst witnessed in 2007. Menwhile Grde A nd Grde B rentl rtes were t n verge of PHP745 (+1.0% QoQ) nd PHP540 (+4.9% QoQ) per month, respectively. The rentl rte in the district is expected to increse between 5 nd 7% in 2Q 2014. FORECAST OFFICE NEW SUPPLY LOCATION End of 2012 2013F 2014F 2015F Totl MAKATI CBD 2,771,784 74,130 24,248 2,870,162 ORTIGAS 1,175,350 66,999 39,773 1,282,122 FORT BONIFACIO 747,116 226,497 149,069 154,214 1,276,896 EASTWOOD 313,864 313,864 ALABANG 303,866 31,131 59,106 51,797 445,900 OTHER LOCATIONS 872,983 161,407 132,507 202,364 1,369,261 TOTAL 6,184,963 560,164 404,703 408,375 7,558,205 Mnil, Psy, Mndluyong, Quezon City nd other fringe loctions P. 4 COLLIERS INTERNATIONAL
PHILIPPINES 2Q 2013 OFFICE COMPARATIVE OFFICE RENTAL RATES (PESOS/SQM/MONTH) MAKATI CBD (BASED ON NET USEABLE AREA) 1Q 2013 2Q 2013 % CHANGE (QoQ) 2Q 2014F % CHANGE (YoY) PREMIUM 860 1,100 860 1,170 3.6 915 1,263 7.3 GRADE A 575 900 580 900 1.0 630 950 6.8 GRADE B 450 575 455 620 4.9 488 645 5.4 Mkti CBD Office Cpitl Vlues Cpitl Vlues 150,000 130,000 110,000 90,000 70,000 As with rentl rtes, verge cpitl vlues for premium buildings in the Mkti CBD grew by 2.3% QoQ to PHP135,750 per sq m nd will rech over PHP144,000 per sq m by 2Q 2014. Menwhile, Grdes A nd B cpitl vlues re currently t n verge of PHP85,735 nd PHP60,735 per sq m, respectively. Vlues for both grdes re seen to increse between 5 nd 7% in the next twelve months. 50,000 30,000 2Q01 4Q01 in peso per sq.m. Premium Grde A Grde B/B COMPARATIVE OFFICE CAPITAL VALUES (PESOS / SQM) MAKATI CBD (BASED ON NET USEABLE AREA) 1Q 2013 2Q 2013 %CHANGE (QoQ) 1Q 2014F %CHANGE (YoY) PREMIUM 1 131,600 132,000 139,496 2.3 141,480 146,600 6.1 GRADE A 71,725 98,890 72,085 99,385 0.5 76,490 104,950 5.8 GRADE B 49,500 67,300 51,480 69,990 4.7 54,100 73,555 5.1 Mkti CBD Residentil Stock RESIDENTIAL SECTOR Supply units 18,000 16,000 14,000 12,000 10,000 8,000 6,000 4,000 2,000 2Q01 4Q01 Residentil Stock (LHS) YoY Chnge (RHS) 25% 20% 15% 5% 0% 5% In ll five submrkets trcked by Colliers, n verge of 6,225 highrise residentil units re expected to be completed nnully, leding to totl supply of over 78,000 units by the end of 2016. The Mkti CBD nd BGC will hve the strongest supply pipeline, collectively representing 60% of new stock in the five submrkets over the next four yers. However, the mjority of the upcoming supply in both districts is not seen to fulfill enduser nd exptrite requirements, s only qurter of the totl inventory is llocted to multibedroom units. In the Mkti CBD lone, bout 1,700 studiotoonebedroom units re slted to be delivered this yer, roughly 85% of the totl new supply. P. 5 COLLIERS INTERNATIONAL
PHILIPPINES 2Q 2013 RESIDENTIAL FORECAST RESIDENTIAL NEW SUPPLY end of 2012 2013 2014 2015 2016 Totl MAKATI CBD 16,288 2,081 1,596 2,812 779 23,556 ROCKWELL 3,718 441 4,159 FORT BONIFACIO 15,491 3,798 1,276 2,977 3,741 27,283 ORTIGAS 10,987 934 792 1,560 405 14,678 EASTWOOD 6,830 440 278 988 8,536 TOTAL 53,314 7,253 4,383 7,349 5,913 78,212 in peso per squre meter per month 18% 16% 14% 12% 8% 6% 4% 2% Mkti CBD Residentil Vcncy Mkti CBD, Rockwell, Bonifcio Globl City Prime 3BR Units Residentil Rents 1,000 900 800 700 600 500 400 300 200 100 Mkti CBD Rockwell Bonifcio Globl City Demnd In 2Q 2013, premium condominiums in the Mkti CBD remin highly preferred, with its vcncy rte decresing by 1.3% QoQ to 3.4%. On the other hnd, vcncy rtes in both Grdes A nd B slightly incresed to 10.5% QoQ nd my rech 11.1% by yerend owing to the substntil upcoming supply. Similrly, in BGC, Grde B vcncy grew to 11.0% nd might expnd further by 2 4%, with close to 3,000 units slted for completion in the second hlf of the yer. MAKATI CBD COMPARATIVE RESIDENTIAL VACANCY RATES (%) 1Q 2013 2Q 2013 2Q 2014F LUXURY 4.7 3.4 OTHERS 10.4 10.5 ALL GRADES 9.8 9.6 10.6 Rents Premium threebedroom rentl rtes in the Mkti CBD grew significntly by 7.2% QoQ nd re pegged t PHP790 per sq m monthly on verge. This trnsltes to monthly rte of PHP197,500 for 250 sq m unit. Menwhile in BGC, rentl rtes grew by 6.0% QoQ to verge t PHP780 per sq m monthly. Rents in both CBDs will improve by 7 8% in the next twelve months s the demnd nd supply gp remins nrrow. While lesing trnsctions remin strong in premium residences, lessors of the smller unit segments in BGC find hevy competition in ttrcting tennts, resulting in wekened brgining cpcities. The sking rentl rtes for studio nd onebedroom units in BGC dropped by nerly 6% QoQ to PHP780 per sq m monthly in 2Q 2013. The decline in the rtes signls continuing trend in the short term s the level of inventory increses. METRO MANILA RESIDENTIAL CONDOMINIUM COMPARATIVE LUXURY 3BR RENTAL RATES 1Q 2013 2Q 2013 %CHANGE (QOQ) 2Q 2014F %CHANGE (YOY) MAKATI CBD 540 930 540 1,040 7.24 550 1,145 7.20 ROCKWELL 700 930 705 995 4.42 780 1,055 7.80 BONIFACIO GLOBAL CITY 580890 590970 6.03 6251,050 7.40 P. 6 COLLIERS INTERNATIONAL
PHILIPPINES 2Q 2013 RESIDENTIAL COMPARATIVE RESIDENTIAL LEASE RATES THREEBEDROOM, SEMIFURNISHED TO FULLY FURNISHED MINIMUM AVERAGE MAXIMUM Aprtment Ridge / Roxs Tringle Rentl Rnge 110,000 150,000 250,000 Averge Size b 210 280 330 Slcedo Villge Rentl Rnge 70,000 100,500 135,000 Averge Size 170 190 330 Legspi Villge Rentl Rnge 70,000 190,000 270,000 Averge Size 120 210 280 Rockwell Rentl Rnge 150,000 200,000 300,000 Averge Size 200 260 330 Fort Bonifcio Rentl Rnge 85,000 175,000 285,000 Averge Size 130 200 300 Php per month b in squre meters COMPARATIVE RESIDENTIAL LEASE RATES (EXCLUSIVE VILLAGES) 3BR 4BR, UNFURNISHED TO SEMIFURNISHED LOW HIGH Forbes Prk 260,000 550,000 Dsmriñs Villge 200,000 450,000 Urdnet Villge 200,000 450,000 Belir Villge 100,000 300,000 Ayl Albng Villge 85,000 300,000 Sn Lorenzo Villge 90,000 280,000 Cpitl Vlues Averge premium secondry cpitl vlues in the Mkti CBD slightly edged out tht of BGC but remin essentilly t pr with miniml difference of PHP1,500 per sq m. Premium threebedroom units in the Mkti CBD nd BGC were priced t PHP128,730 nd 127,575 per sq m, respectively. Similr to premium rents, 7 8% growth in secondry prices is expected in both districts by 2Q 2014. Menwhile, in Rockwell Center, the verge cpitl vlue ws PHP132,770 per sq m, nd is expected to improve by 8% in the next twelve months. in peso per sq.m. 150,000 140,000 130,000 1 110,000 100,000 90,000 80,000 70,000 60,000 Mkti CBD Residentil Cpitl Vlues Mkti CBD Rockwell Bonifcio Globl City METRO MANILA RESIDENTIAL CONDOMINIUMS COMPARATIVE LUXURY 3BR CAPITAL VALUES (PESOS / SQ M) 2Q 2013 1Q 2013 % CHANGE (QOQ) 2Q 2014F % CHANGE (YoY) MAKATI CBD 87,365 170,095 81,650165,870 7.00 95,030 180,530 7.03 ROCKWELL 106,110 159,430 103,020153,300 3.60 114,835 170,880 7.60 BONIFACIO GLOBAL CITY 98,265 156,885 93,585149,415 5.00 108,450 164,870 7.12 P. 7 COLLIERS INTERNATIONAL
PHILIPPINES 2Q 2013 HOTEL & LEISURE Metro Mnil Hotel Room Stock HOTEL & LEISURE No. of rooms no. of rooms 35,000 30,000 25,000 15,000 10,000 6000 5000 4000 3000 1000 5,000 0 0 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2001 2002 2003 2004 2005 2006 2007 Source: Deprtment of Tourism, Colliers Interntionl Philippines Reserch Forecst on New Hotel Room Supply 2013F 2014F 2015F 2016F Philippine Tourist Arrivls vs. Hotel Occupncy Rte 4,500,000 4,000,000 3,500,000 3,000,000 2,500,000 2,000,000 1,500,000 1,000,000 500,000 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Visitor Arrivls (LHS) 2001 2002 2003 2004 2005 Averge Occupncy (RHS) Metro Mnil Hotels Averge Occupncy Rte 80% 70% 60% 50% 40% 30% 20% 0% 3Q11 1Q12 3Q12 2006 2008 2007 2009 2010 2008 2011 2009 2012 2010 2013F 2011 2014F 2015F 2012 2016F 80% 70% 60% 50% 40% 30% 20% 0% First Clss Stndrd Economy Source: Deprtment of Tourism Supply In 2012, the number of new hotel rooms in Metro Mnil reched 1,440 nd cumultively ended with n estimted stock of 17,007 rooms. Some 2,260 new rooms (+57% YoY) re expected this yer, mjority of which hve been delivered in the first hlf. These new rooms re found in vrious hotel developments, such s the new brnches of limitedservice brnds Microtel Inn & Suites (84 rooms) in Quezon City, nd Go Hotels (118 units) in Mnil. Moreover, interntionl brnd Holidy Inn & Suites recently opened in Mkti with 696 rooms. In Psy City, gming hotel Solire Mnil (500 rooms) hs estblished its footprint, becoming the first hotel to open its doors in the much nticipted Entertinment City. Towrds the reminder of the yer, roughly 862 more rooms re expected to be delivered. Hrnessing the growing opportunities in the tourism industry, rel estte firms confidently venture into the hotel nd leisure businesses with vrious plns currently lid out. In the next two to three yers, Trvelers Interntionl Hotel Group is bringing in the Hilton nd Sherton brnds, trnslting to bout 700 rooms, into the Resorts World Leisure Complex. Menwhile, the SM Group plns to build one new hotel ech yer, with Prk Inn s its min brnd driver. Furthermore, under its homegrown Crimson hospitlity brnd, Filinvest plns to introduce Crimson Resort & Sp in Borcy, consisting of 200 luxury hotel rooms. Overll, Metro Mnil lone nticiptes n verge of 4,200 new rooms nnully from to 2014 to 2016. Ntionwide, over 10,000 hotel rooms re underwy, set to be completed in the spn of four to five yers. Demnd Despite n lltime high in tourist rrivls in 2012, government dt shows tht the verge occupncy rte in Metro Mnil decresed to 67% from the 69% recorded in 2011. Menwhile, the verge length of sty is unchnged t 2.48 nights. With the mjority of hotels opening in the ltter prt of 2012, the initil introduction stge suggests low tkeup rte, possibly resulting in n rtificil drop in the yer s overll hotel occupncy. Moreover, the improved ccessibility of new domestic nd interntionl irports hs drwn locl nd foreign trvellers from the metropolitn res to other populr destintions such s Clrk, Cebu, Dvo, Klibo nd Iloilo, reducing the need for longer stys in Mnil. Rtes A strong business environment drove hotel room rtes to consistently increse in Metro Mnil, but t modest rte owing to tightening competition. Averge fivestr room rtes grew mrginlly by 1.08% to US$321 per night in 1H 2013 versus its doubledigit increse in the sme period lst yer. Similrly, fourstr room rtes incresed by miniml 2.3% HoH to US$270. In contrst, threestr hotels remin resilient, benefitting mostly from the incresing locl nd foreign guests. The verge threestr room rtes improved significntly by 7% HoH to US$147 per night. Menwhile, corporte rtes grew considerbly cross clssifictions, t n verge of 15% YoY due to the nticipted growth in business trvellers. CLASS MM Averge Hotel Room Rtes Published Rtes (US$) Corporte Rtes (US$) 2H 2012 1H 2013 2012 2013 5 Str 318 321 209 235 4 Str 263 270 191 224 3 Str 137 147 118 138 P. 8 COLLIERS INTERNATIONAL
PHILIPPINES 2Q 2013 INDUSTRIAL Philippines Industril Supply Stock by Region of Highest Supply (Mnufcturing) RVII, 8% RIV, 14% RX, 6% RVIII, 5% RIII, 58% INDUSTRIAL Supply As of 1H 2013, the number of mnufcturing economic zones in the Philippines registered with the Philippine Economic Zones Authority (PEZA) grew by meger 0.3% to 55,354 h versus the previous hlf. Stock remins unchnged in ll of Lgun, Cvite nd Btngs t 6,210 h. However, expnsions re strting to be implemented in vrious economic zones in the region such s in First Philippine Industril Prk, Light Industry & Science Prk II, AG&P Specil Economic Zone, nd LTI, with their PEZA ccredittion currently in process. This recent development indictes growing requirements in the mnufcturing industry bcked by fvorble investment climte. The mnufcturing industry grew by significnt 9.7% in 1Q 2013 which fcilitted the significnt growth in the country s GDP. Source: Philippine Economic Zone Authority PEZA Accredited Economic Zones INDUSTRIAL SUPPLY STOCK (MANUFACTURING) Region IV 2H 2012 1H 2013 CHANGE (HoH) Hectres Hectres % Btngs 2,690.02 2,690.02 0.0 Cvite 2,109.02 2,109.02 0.0 Lgun 1,411.03 1,411.03 0.0 Totl 6,210.07 6,210.07 0.0 PEZA (operting, proclimed, nd development in progress), s of Mrch 2013 Source: Philippine Economic Zone Authority INDUSTRIAL VACANCY RATES (MANUFACTURING) Region IV 2H 2012 1H 2013 Lgun 6.47 6.66 Cvite 15.75 18.58 Btngs 26.90 23.21 Totl 16.35 b 15.9 Demnd In 1H 2013, the verge industril vcncy rte in ll of Cvite, Lgun nd Btngs slightly declined, for the second consecutive period, to 15.9% from the previous hlf s 16.3%. An improvement in the tkeup rte consistently trnspired in Btngs with the vcncy rte nrrowing by 3.7% HoH. Aprt from Cebu nd Clrk, Btngs remins highly preferred mong exportoriented firms due to the presence of its industril ports. Menwhile, due to recent expnsion developments in Cvite nd Lgun, the vcncy rte grew by 2.8 nd 0.2%, respectively. PEZA ccredited economic zones b Revised nd Rebsed P. 9 COLLIERS INTERNATIONAL
PHILIPPINES 2Q 2013 INDUSTRIAL Region IV Industril Lnd Vlues Rtes Php per sq m 4,500 4,000 3,500 3,000 2,500 Cvite, Lgun, & Btngs As of 2H 2012, the verge lnd lese hold rte incresed significntly by 29% HoH to verge t PHP30.00 per sq m monthly. On the other hnd, lese rtes for wrehouses nd logistics fcilities improved by 1.7%. The positive outlook in domestic spending will eventully improve the levels of production driving lese rtes for wrehouses to grow between 4 nd 5% by yerend. Menwhile, lnd vlues in ll of Cvite, Lgun nd Btngs grew by 3% to PHP3,800 per sq m on verge. A further increse in rtes will be supported by the new phses plnned to be introduced in the second hlf of the yer. 2,000 8.0 7.0 6.0 5.0 4.0 3.0 2.0 1.0 0.0 1Q97 3Q97 1Q98 3Q98 1Q99 3Q99 1Q00 3Q00 1Q01 3Q01 1Q02 3Q02 1Q03 3Q03 1Q04 3Q04 1Q05 3Q05 1Q06 3Q06 1Q07 3Q07 1Q08 3Q08 1Q09 3Q09 1Q10 3Q10 1Q11 3Q11 1Q12 3Q12 1Q13 INDUSTRIAL LEASE RATES (MANUFACTURING) 2H 12 1H 13 (PHP/sq m/mo) (PHP/sq m/mo) Lese Hold (Lnd) 23.25 30.00 Lese Rtes (SFB b ) 168.25 171.15 Averge in Cvite, Lgun nd Btngs b Stndrd Fctory Building Consumer Spending Growth Rte % Spending Indictors Remittnces from overses Filipino workers coupled with benign infltion rte continue to fuel the country s consumerbsed mrket. Ltest dt from NSCB shows tht in 1Q 2013, household spending grew by 5.1%. Bsic commodities such s food, housing, wter nd electricity comprise over 50% of the totl expenditures. On the other hnd, buying ptterns in Communiction (+8.3%), Recretion nd Culture (7.1%), nd Resturnt nd Hotels (7.5%) re similrly emergent. Bsed on the ltest survey from the Bngko Sentrl ng Pilipins (BSP), overll consumer sentiment improved in 2Q 2013 with the index esing to 5.7% from the previous qurter s 11.2%. Better job opportunities, incresed investment inflows, nd slry increses were the min ttributes which led to the respondents optimistic outlook. Source: Ntionl Sttisticl Coordintion Bord P. 10 COLLIERS INTERNATIONAL
PHILIPPINES 2Q 2013 THE KNOWLEDGE COLLIERS INTERNATIONAL PHILIPPINES MANAGEMENT TEAM INVESTMENT SERVICES Ieyo De Guzmn Executive Director REAL ESTATE MANAGEMENT SERVICES Jet Ilg Executive Director OFFICE SERVICES Lndlord & Tennt Representtions Jie Espinos Director VALUATION & ADVISORY SERVICES Mriss Benitez Director RESIDENTIAL SERVICES Gigi Limgungco Associte Director 482 offices in 62 countries on 6 continents United Sttes: 140 offices Cnd: 42 offices Ltin Americ: 20 offices Asi Pcific: 195 offices EMEA: 85 offices $2 billion in nnul revenue 1,120 billion squre feet under mngement Over 13,500 professionls worldwide COLLIERS INTERNATIONAL PHILIPPINES 10F Tower 2 RCBC Plz Ayl Avenue, Mkti City Philippines TEL +632 888 9988 FAX +632 845 2612 www.colliers.com RECENT RECOGNITIONS PHILIPPINE EUROMONEY Rel Estte Awrds 2011 nd 2012 Winner * Best Overll Adviser & Consultnt * Agency Letting * Vlution * Resech Krlo Pobre Reserch Mnger Advisory & Reserch Services Min +632 888 9988 ext. 4030 Fx +632 845 2612 Emil krlo.pobre@colliers.com Julius Guevr Associte Director Advisory & Reserch Services Min +632 888 9988 ext. 4024 FAX +632 845 2612 Emil julius.guevr@colliers.com Dvid A. Young Mnging Director Colliers Interntionl Philippines Min +632 888 9988 FAX +632 845 2612 Emil dvid..young@colliers.com Copyright 2011 Colliers Interntionl. The informtion contined herein hs been obtined from sources deemed relible. While every resonble effort hs been mde to ensure its ccurcy, we cnnot gurntee it. No responsibility is ssumed for ny inccurcies. Reders re encourged to consult their professionl dvisors prior to cting on ny of the mteril contined in this report. www.colliers.com