REAL ESTATE

MARKET INSIGHTS
December 2018
 Executive Summary

• Total Philippine office demand as of December 2018 reached another record-high of 1.5 million sqm, with
Metro Manila accounting for 73% or 1.16 million sqm; inclusive of pre-commitment transactions done
by tenants for future supply.

• Metro Manila recorded high levels of pre-commitment in 2018 with more than 25% of the 2019 stock
leased and under negotiations as IT-BPM locators struggle to secure PEZA Accredited space in the
current stock.

• Davao regains traction in the 4th quarter generating 28,000 sqm to the 2018 office demand despite martial
law status.

• Record high land values seen all over the country despite rising interest rates.

• Office supply will sharply decline by 2021 and a deficit is forecasted by 2022. Developers are encouraged
to complete new projects by 2022 and beyond.

• 2021 will be a milestone year in infrastructure development that will see the completion of 8 Projects
totaling 665km of road. This should greatly help decongest Metro Manila and open up transportation
arteries to the rapidly rising regional centers in Clark, Cavite, Laguna, and Batangas. These areas should
also see a boom in land values as a direct effect of improved accessibility.

• Clark Global City (Udenna) lights the spark in Clark, which saw the highest office demand outside Metro
Manila (156,000 sqm of demand in 2018) and land values of up to PHP 100,000 per sqm. (70-year lease)

2
THE PHILIPPINES
 The Philippines

(Aug 2018)

6.6%
LITERACY RATE
106
million 96.5%
(Jan 2018) POPULATION GROWTH
LABOR FORCE GDP
PHILIPPINE 71.6 M (July 2018) 6.4%
GNI per Capita
24 years old
$3,580 Average age of Filipinos
INFLATION RATE
(Aug 2018)

PHILIPPINE DEBT * CREDIT

RATINGS
GDP EXTERNAL
$304.91B S&P BBB
23.8% of GDP
(June 2017)
MOODY’S Baa2
FOREIGN PUBLIC
RESERVES FITCH BBB
42.6% of GDP
$81.51B (May 2018)

* BBB : Exhibits adequate protection parameters, ability to meet financial commitments

* Baa2 :Medium grade, subject to moderate credit risk, strong ability to repay short term obligations

Source: Trading Economics, BSP, World Bank, PSA, S&P, Moody’s

4
 Philippine Foreign Direct Investments (FDI)
Performance (2005 to H1 2018)
Philippine Foreign Direct Investments recorded a 27% growth from FY 2016 to FY 2017.
Foreign Direct Investments for H1 2018 reached USD 4.8 Billion, 10% higher from the same period last year, putting the
Philippines on track to hit the USD 9.2 billion forecast for FY 2018.

In USD Billions
5
Source : World Bank, Bangko Sentral ng Pilipinas
Government’s Socioeconomic Agenda

PRES. DUTERTE’S 10-POINT SOCIOECONOMIC AGENDA

1 Infrastructure Spending
2. Current macroeconomic policies

DUTERTENOMICS: 3. Ease of Doing Business

“Build, build, build program”
4. Social protection programs

“Golden Age of Infrastructure” in the Philippines 5. Rural and value chain development
-Budget Secretary Benjamin Diokno
6. Security and land tenure
• Manila Subway (P227 billion)
• Mindanao Railway (P31.5 billion) 7. Human Capital Development
• NLEX-SLEX Connector Road (P23.30 billion)
• BGC to Ortigas Road Link Project (P4 billion) 8. Science, technology, and creative arts
• Philippine National Railways North 1 (P105.3 billion)
• Philippine National Railways North 2 (P150 billion)
9. Tax Reform
• Philippine National Railways South Commuter (P134 billion)
• PNR South Long Haul (P151 billion)
• Subic-Clark Cargo Railway Project (P32.5 billion) 10. Responsible Parenthood &
• Unified common station (P2.8 billion) Reproductive Health

Source: DOH 6
 Philippine Market Penetration
Money Market

Increased financial literacy among Filipinos is essential to sustain the

emerging Philippine economy.

4% life insurance market 0.7% of Filipinos

penetration. invest in the stock market.

Housing Backlog - 5.7M units

“ According to Leni Robredo, the government was
looking at providing tax breaks to entice private Per Capita GNI - $3,580
developers to go into socialized housing projects and as of 2016
help reduce the projected backlog of 5.7 million units”

5% of Filipinos own a credit card. Underemployment Rate - 16.3%

“The biggest reason card penetration is as of January 2017
very low in the country is the lack of
information about the prospective “NEDA said that this was the lowest rate
debtor.” recorded since 2006.”

14% of Filipinos have bank accounts. Unemployment Rate - 6.6%

“The members that are banked are mostly as of January 2017
employees, either by private companies or by the “The government must focus interventions to diversify the
government.” sources of income of our workers in the agriculture sector,
increase labor participation of women, and address youth
7
Source: BSP, Manila Bulletin, MarketMonitor, PhilStar,Nielsen, Topgear, Rappler unemployment and underutilization.”
 Demand Drivers

Urban IT-BPM Employee’s Overseas Filipino

Population Growth Housing Need Remittances

Need to live 10 million

48.6% Growing number near OFW’s can invest in Real
of Filipinos of IT-BPM their Estate
live in Urban workers
Areas*
workplace.

More than 50%

Housing backlog needs of remittances are
to be addressed and real estate related
It is projected to rise to 56.3% demand for dormitories
by 2030 and 66% by 2050.
will rise.

Source: Keynote speech of Sec. Arsenio M. Balisacan Director General of NEDA

“The Philippine Economic Growth and the Growth in the Property Sector” 2015 8
* 2010
OFFICE MARKET
 Metro Manila Cityscape

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

• Metro Manila may see a deficit in office supply by 2022 as key
business districts maintain low vacancy rates.
• Office and commercial developments will rollout to nearby districts
outside Metro Manila as interconnectivity is enhanced by the Luzon
Spine Expressway Network.
Quezon City
3 MAJOR CBDs
MAKATI MAKATI CBD. CENTURY CITY. ROCKWELL CENTER. CIRCUIT MAKATI.

ORTIGAS ORTIGAS CBD. ROCKWELL BUSINESS CENTER. ARCOVIA CITY.

SILVER CITY. CAPITOL COMMONS. PARKLINKS.
San Juan
BGC BONIFACIO GLOBAL CITY. MCKINLEY WEST. MCKINLEY HILL. Manila
UPTOWN. VERITOWN. Manda-
Ortigas/
1 2 luyong
3 Pasig
49 BUSINESS PARKS 4
Makati
Bay/
QUEZON CITY. UP TECHNOHUB. EASTWOOD CITY. ETON CENTRIS. Pasay
ARANETA CYBERPARK. ROBINSONS BRIDGETOWNE IT PARK. VERTIS NORTH. UP TOWN BGC / Taguig
CENTER. FAIRVIEW TERRACES. ALI CLOVERLEAF BALINTAWAK. NUVO. SM CITY NORTH
EDSA COMPLEX. MANDALUYONG. GREENFIELD DISTRICT. ROBINSONS CYBERGATE.
ROCKWELL SHERIDAN. SAN JUAN. SANTOLAN TOWN PLAZA. MUNTINLUPA. FILINVEST Parañaque
CORPORATE CITY. LA FUERZA. NORTHGATE CYBERZONE. MADRIGAL BUSINESS PARK.
ALABANG WEST. TAGUIG. ARCA SOUTH. LAS PINAS. PORTOFINO. EVIA. PASAY.
NEWPORT CITY. SM MALL OF ASIA COMPLEX. METROPOLITAN BUSINESS PARK. DOUBLE Las Pinas
DRAGON CYBERCAMPUS. FILINVEST CYBERZONE PASAY. PARANAQUE. ASIAWORLD CITY.
ASEANA BUSINESS PARK. AYALA ASEANA. WESTSIDE CITY. MANILA. CITYPLACE. SAN
LAZARO.
Alabang
4 UPCOMING RECLAMATION PROJECTS
1. New Manila Bay International Community (UAA Kinming Group) 2. Manila Waterfront City
(WMPD) 3. Solar City Urban Center (MGDC). 4. Coastal Bay Project (SMPH).
10
 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 132,383hectares
NUEVA ECIJA. PALAYAN CITY GOV’T. CENTER & CENTRAL CAGAYAN
2
BUSINESS HUB TARLAC. LUISITA BUSINESS PARK. TARLAC 2 of master-planned or
BAGUIO
PROVINCIAL IT PARK. BULACAN. PDC TECHNOPARK. mixed-use developments
ALTARAZA. FIRST BULACAN IT PARK. CIUDAD DE VICTORIA. 4
ABS-CBN CAMPUS. HORIZON IT PARK URDANETA. CB TARLAC
MALL. NUEVA ECIJA CAVITE. BATANGAS. LAGUNA. VERMOSA.
2 2
BULACAN
PONTEFINO. SUNTECH IT PARK. HAMILO COAST.
12
Over 95 I.T. parks and PAMPANGA SMDM IT CENTER. SOUTHFORBES IT PARK.
6 SOUTHWOODS. NUVALI. ETON CITY. BATSTATEU
PANGASINAN 1 1 QUEZON
business districts CAVITE /
KNOWLEDGE, INNOVATION AND SCIENCE PARK.
BATANGAS 12 GREENFIELD CITY. PUERTO AZUL.
/ LAGUNA CEBU. CEBU IT PARK. CEBU SRP.
Countryside development going through CEBU BUSINESS PARK. MACTAN NEWTOWN.
unprecedented construction boom driven by ABOITIZLAND CEBU. WATERFRONT TOWNSHIP.
AKLAN
1 1 CAPIZ CITTA DE MARE. SMC. OAKRIDGE BUSINESS
IT-BPM and tourism. PALAWAN ILOILO
PARK. GATEWAY CENTRAL INFORMATION
5 TECHNOLOGY PARK.
2 10 CEBU BOHOL. TAGBILARAN IT HUB DAVAO. MATINA
PAMPANGA. CLARK GLOBAL CITY. CLARK SPECIAL BACOLOD 7
ECONOMIC ZONE. PHILEXCEL BUSINESS PARK. IT PARK. ABREEZA. DAVAO PARK DISTRICT.
LANANG IT PARK. DAMOSA IT PARK.
BERTAPHIL BUSINESS PARK. SM CITY CLARK. CLARK DUMAGUETE 4 1 BOHOL NORTHPOINT. CAMELLA. CIUDADES. LUBI ISLAND
GREEN CITY. NEPO CENTER. ALVIERA. CAPILION. THE
PLANTATION. ROBINSONS CYBERPARK DAVAO.
INFINITY. FILINVEST MIMOSA. SKYTECH IT PARK
4 A57 TECHNO PARK. AZUELA COVE.
AKLAN. BORACAY NEW COAST. CAPIZ. PUEBLO DE
CAGAYAN DE ORO PALAWAN. LIO RESORT TOWN. SAN
PANAY TECHNOPARK. ILOILO. ILOILO TECHNOHUB. ZAMBOANGA 4
ATRIA PARK DISTRICT. GAISANO CAPITAL. AYALA 12 VICENTE. QUEZON. BALESIN ISLAND
SICOGON. CLUB
DAVAO
ILOILO BUSINESS PARK. BACOLOD. LOPUE’S ZAMBOANGA. MEGALAND MALL.
EAST IT CENTER. ONE AND TWO SANPARQ. THE CITYMALL ZAMBOANGA.
BLOCK IT PARK. ROBINSONS CYBERGATE CENTER. ZAMBOECOZONE AND FREEPORT NEW
LOPUE’S SOUTHSQUARE IT PARK. BACOLOD IT TOWNSHIP. ZAMBOECOZONE
PARK. CAPITOL CENTRAL. DUMAGUETE. Legend:
HIGHLANDS. CAGAYAN DE ORO.
DUMAGUETE BUSINESS PARK. LINKSYS IT PARK. LP Number of townships
LIMKETKAI CENTER. SM CITY BPO 2.
IT PARK. YY STAR DAS. CENTRIO. ONE PROVIDENCE. 11
 PH Growth Amidst Historical Events
Cotabato City Bombing Super Typhoon Haiyan Resorts World Manila Attack

2013
2002

2008
Bombing in Zamboanga Ces Drilon Kidnapping Cebu Ferry Tragedy Extrajudicial Killings
Capture and sentence of MV Princess of the Star Sank Killing of Taiwanese Fisherman Terrorism threats in Hamilo Coast, Bohol,
Jemaah Islamiyah ZTE-NBN Irregularities Senate Pork Barrel Scam Hearing and Palawan

2017
Meralco Stockholders Meeting 5.4 Magnitude Earthquake Cebu and Bohol Mindanao Martial Law
Oakwood Mutiny Bird Flu Outbreak
H1N1 Outbreak

2014
Marawi Siege
2003

SARS Outbreak Typhoon Ondoy Typhoon Hagupit

Jemaah Islamayah escape Binay Alleged Corruption Hearings Pres. Duterte threatens to expel EU
Typhoon Pepeng

2009
Jose Pidal plunder case DMCI Construction Hearings Diplomats from the PH
Typhoon Marakot
Davao airport bombing Fitch upgraded PH credit rating to ‘BBB’
Superferry sank in Zamboanga
from ‘BBB-”
Death of Corazon Aquino Pres. Aquino’s Final SONA

2015
Infanta Mud Slide Greenbelt 5 Robbery Boracay Closure
2004

Kentex Manufacturing Slippers Factory Fire

Superferry Bombing Maguindanao Massacre Typhoon Nona Impeachment of Chief Justice

2018
Phil. General Elections Typhoon Koppu Implementation of Excise Tax
General Santos Christmas Bombing Typhoon Megi AI/Robotics
Manila Hostage Crisis PNP-SAF killed in Maguindanao
2010

Push for Federalism

Phil. General Elections Xiamen Airline incident at NAIA
DLSU explosion during Bar Exams GDP expanded by 7%
2006 2005

V-day Bombing TRAIN 2 Law

Inauguration of Pres. Noynoy Aquino National and Local Elections
Hello Garci Scandal GMA installed as House Speaker
Vizconde Massacre Case Finished Rodrigo Duterte proclaimed as new Pres.
General Santos City Mall Bombing

2016
Pres. Duterte enjoys a record high trust
rating of 92%
Makati Bus Explosion Spratly Islands Dispute
2011

Milenyo Tropical Storm Juaning Davao Bombing

Southern Leyte Mud Slide Typhoon Sendong War on Drugs
State of Emergency Declaration Arrest of former Pres. Gloria Arroyo Above investment grade rating (BBB)
ZTE Scandal State of Emergency Declaration
Conviction of ERAP Corona Impeachment Trial
2007

2012

Glorietta 2 Bombing Typhoon Pablo

Manila Peninsula Mutiny Cebu Governor Suspension
Cotabato Bus Station Bombing 6.9 Magnitude Earthquake Negros and Cebu
Congress Bombing Tropical Dispute with China

The country experienced a

6.8% growth rate in
gross domestic product
(GDP) in 1Q 2018.

Source: IMF,The World Bank, PSE, DOT, CeMAP, 12

Yahoo Finance, Philippine Daily Inquirer, LPC Research
 Philippine Office Supply
Current | Pipeline
The proportion of office supply from outside Metro Manila continues to grow with 31% of the pipeline, twice as much as its share in
the current supply of 16%.

13
 Philippine Office Demand
Building Completion | Industry | District (FY 2018)
FY 2018 Philippine office demand reached a record-high of 1.5 million sqm, with Metro Manila accounting for 73% or 1.16 million
sqm (27% higher from 2017’s 910,000 sqm); inclusive of pre-commitment transactions done by tenants for future supply.
Clark recorded the largest office demand outside Metro Manila with 156,000 sqm, the majority of this demand was in Udenna’s famed Clark
Global City.
Davao regains traction in the 4th quarter generating 28,000 sqm to the 2018 office demand despite Martial Law status.
Subsequent to IT-BPM and Offshore Gaming, Flexible Workspaces continue to be a major driver of office space demand.
Filipino Entrepreneurs and Multinational Companies comprised 322,000 of office space demand.

14
*Gross Leasable Area
METRO MANILA
OFFICE MARKET
 Metro Manila Office Supply
Current | Pipeline
Current vacancy rate across Metro Manila is at 6%
The lowest office vacancy rates are at Bay City with 1% and Alabang with 2%.
Ortigas Center / Mandaluyong City / Pasig City will be the largest producer of office space in the next 5 years.
Half of the pipeline supply in Bonifacio Global City/Taguig City is already pre-committed as competition for PEZA accredited space
tightens. Century Diamond Tower, due for completion by end of 2019, will be the only PEZA building available in Makati for the next
several years.

Current supply Pipeline supply

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

11.01M sqm 2.88M sqm

Legend: Leased Under Nego Vacant 16

 Metro Manila Office Supply Pipeline
Per District, Per Year (2019 to 2023E)
Metro Manila recorded high levels of pre-commitment in 2018 with more than 25% of the 2019 stock leased and under negotiations as IT-
BPM locators struggle to secure PEZA Accredited space in the current stock.
Office supply will sharply decline by 2021 and a deficit is forecasted by 2022. Developers are encouraged to complete new projects by
2022 and beyond.

2.88M sqm
Total supply
2019 to 2023E

17
*Gross Leasable Area in thousands (sqm)
Metro Manila - PEZA Status
Full Year 2017 and Full Year 2018E Office Buildings

LEGEND: PEZA STATUS

ACCREDITED UNDER APPLICATION NON-PEZA

Leased Leased Leased

Under Negotiations Under Negotiations Under Negotiations

Vacant Vacant Vacant

18
 PEZA Status
By District | FY 2019E to 2023E

Total PEZA-Accredited space: 875,112 sqm (19 buildings) 2.88M sqm

Total space under application for PEZA: 1,507,594 sqm (48 buildings) Total supply
Total non-PEZA space: 496,879 sqm (20 buildings) FY 2019-2023E

19
*Gross Leasable Area in thousands (sqm)
 Developer Market Share
Philippine Current Office Supply (1960’s to 2018)

1 1.386M

2 1.030M

3 829K

4 586K

5 311K
7.60M sqm

6 286K

7 271K

OthersTop 10:
Eton Properties 8 226K
Rockwell Land
The W Group
DoubleDragon Properties
Ortigas & Company 9 205K
Vista Land
Greenfield Development Corporation
Century Properties
Udenna Corporation 10 183K
Aseana Holdings 20
Source: LPC Research, Developer Announcements Gross Leasable Area in sqm
 Developer Market Share
Philippine Pipeline Office Supply (2019E to 2023E)

1 543K

2 470K

3 348K

4 274K
1.88M sqm

5 166K

6 115K

7 110K

OthersTop 10:
Century Properties 8 100K
Berthaphil
Federal Land
Philexcel Business Park
Unioil 9 95K
Udenna Corporation
Innoland Development Corporation
Anchorland
Eton 10 90K
AU & Sons Merchandising Inc. 21
Source: LPC Research, Developer Announcements Gross Leasable Area in sqm
Metro Manila Rental Range
PhP/ sqm / month

8-year boom in rental rates.

Rents will continue to move upward this 2018
as new deals are done at higher rates than
immediately preceding transactions.

22
 Land Values
By District (2016 to YTD October 2018)
Bay City has the fastest Y-o-Y increase in land values in terms of Accommodation Value
The expertly master planned Filinvest City has seen 24 lots change hands in the last 20 months.
Record high land values seen all over the country despite the rise in interest rates due to the fact that property is still seen by the
wealthy as the best hedge against inflation.

2016 V 2017 V
2016 2017 YTD 2018
2017 2018
Y-o-Y Y-o-Y
Business *FAR Land Values AV Land Values AV Land Values AV
Increase Increase
District Range PhP/sqm (GFA/sqm) PhP/sqm (GFA/sqm) PhP/sqm (GFA/sqm)
(AV) (AV)

Arca South 6–8 210K – 280K 35K 250K – 280K 35K - 300K –350K 40K 14%

Bay City 6 198K 33K 250K 41K 26.% 350K – 450K 60k-75k 46%

BGC 6 – 15 360K – 900K 60K * 480K – 1.2M *80K 33% * 480K – 1.2M *90K 13%

Cebu 6-10 190K 24K 220K – 280K 31K 22% 280K – 350K 39K 21%

Davao N/A 50K N/A 81K – 100K N/A 40% 195K – 220K N/A 35%

Filinvest
6 – 14 120K – 280K 20K 144K – 365K 27K 35% 309K - 473K 40K 33%
City

Makati City 6 - 16 300K – 800K 50K 400K – 1M 63K 25% 400K – 1.2M 79K 21%

Ortigas N/A 200K – 350K N/A 250K – 400K N/A 250K – 400K N/A -

*Accommodation Value=Total Land Value

Lot Area x Floor Area Ratio
23
 REGIONAL
OFFICE MARKET
 Provincial Outlook
IT-BPAP Roadmap 2022
Whilst 70% of the total projected IT-BPM workforce will still remain in Metro Manila, National Government’s all inclusive-plan
will positively impact expansion in the provinces.
IT-BPM labor workforce in the provinces is estimated to grow by 60% in 2022.
IT-BPM Full-Time Employees (FTEs) will grow from 1.2 million to 1.8 million in the next 5 years, which translates to 3 million
sqm of office requirement.

1,400 Metro Manila Other Regions +38%

1,301
1,200 1,236
1,161
1,000 1,086
FTEs in ‘000

1,014
941
800

600
+61%
499
400 454
416
381
345
309
200

0
2017 2018 2019 2020 2021 2022

Source: IT-BPAP Roadmap 2022

25
 Provincial Office Supply Pipeline
Luzon, Visayas, & Mindanao excluding Metro Manila & Cebu (2018 to 2025E)
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.

LUZON PIPELINE SUPPLY VISAYAS & MINDANAO

(excluding Metro Manila)
PIPELINE SUPPLY(excluding Cebu)
548K sqm 305K sqm
195

* 141

68
108

67

46 50

27 29
21 13 2 20 5 5 9 5
10 11 10 1 4 5

Iloilo

Kalibo

Aklan

Cagayan De
Batangas

Rizal
Laguna

Bulacan

Davao
Tuguegarao

Subic

Tarlac

Palawan
Bataan

Bacolod
Ilocos Norte

Tagbilaran

Roxas
Dumaguete
Cavite

Pampanga

Bukidnon

Oro
Legend: Leased Under Nego Vacant
26
*Gross Leasable Area in thousands (sqm)
 Cebu Supply
Current vs. Pipeline
Cebu continues to be one of the options of IT-BPM companies expanding outside Metro Manila.
Office supply in Cebu will increase by 45% within the next six years.
Cebu IT Park is the core market in Cebu representing 61% of the total pipeline supply.

Legend: Leased Vacant Under Nego

27
*Gross Leasable Area in thousands (sqm)
 Transacted Rental Range
Provincial | PhP / sqm / month
Pesos per square meter
200 250 300 350 400 450 500 550 600 650
Bacolod
Baguio
Batangas
Bicol
Bulacan
CALABARZON
Cagayan de Oro
Cebu
Davao
Dumaguete
Iloilo
Kalibo
Nueva Ecija

Palawan

Pampanga
Roxas
Tacloban
Tarlac
28
Tuguegarao
RESIDENTIAL MARKET
 Philippines Residential Supply
By Residential Type (1992 – 2017)
The past 7 years shifts from horizontal housing to vertical housing as condominium supply rapidly grows at 16% per annum.

Condominium Open Market/Medium Cost

300,000 360,726 units 604,223 units
(Condominium) (Condominium)

200,000

100,000

2004

2007
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003

2005
2006

2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
Overall Total Supply CAGR
Total no. of projects Average project per
Type Price Ranges (PhP) in units (1992 -
(1992 – 2017) year
(1992 – 2017) 2017)

Condominium 450K and above 964,949 16% 2,075 80

Open Market
3.0M and above 931,452 3% 4,242 163
/Medium Cost

Economic
450K – 3.0M 1,676,357 9% 12,931 497
/Socialized

Total 3,572,848 19,244

30
Source: HLURB License to Sell
 In Retrospect
Philippines residential supply through the years amidst issues (1992 – 2017)
The residential supply grows along with the increase of OFW Remittances, IT-BPM FTEs, and decline in interest rates.
The OFW sector soars with 11% CAGR amidst risks and crises.

31
Source: BSP, PSA, ADB, HLURB License to Sell, World Bank
 Metro Manila Luxurious Lots
High-end residential villages (1969 – 2018)
Luxurious land values spiraled upward by 1,874 times for Forbes Park), 477 times for Ayala Alabang, 209 times for Green Meadows and
326 times for Valle Verde due to scarcity of land in a growing affluent market. All residential values recorded a CAGR of 14-17% amidst
historical issues.

32
Source: LPC Research, BSP, Bureau of Treasury, World Bank
 Metro Manila Luxurious Lots
High-end residential villages (1969 – 2018)
Luxurious land values spiraled upward by 1,874 times for Forbes Park), 477 times for Ayala Alabang, 209 times for Green Meadows and
326 times for Valle Verde due to scarcity of land in a growing affluent market. All residential values recorded a CAGR of 14-17% amidst
historical issues.

33
Source: LPC Research, BSP, Bureau of Treasury, World Bank
 Metro Manila Luxurious Lots
High-end residential villages (1969 – 2018)
Luxurious land values spiraled upward by 1,874 times for Forbes Park), 477 times for Ayala Alabang, 209 times for Green Meadows and
326 times for Valle Verde due to scarcity of land in a growing affluent market. All residential values recorded a CAGR of 14-17% amidst
historical issues.

34
Source: LPC Research, BSP, Bureau of Treasury, World Bank
 Metro Manila Luxurious Lots
High-end residential villages (1969 – 2018)
Luxurious land values spiraled upward by 1,874 times for Forbes Park), 477 times for Ayala Alabang, 209 times for Green Meadows and
326 times for Valle Verde due to scarcity of land in a growing affluent market. All residential values recorded a CAGR of 14-17% amidst
historical issues.

35
Source: LPC Research, BSP, Bureau of Treasury, World Bank
 ARTIFICIAL
INTELLIGENCE
 AI race is the new race
USA and China are currently racing for AI leadership.

Top 10 Countries by total no. of

AI enterprises (as of June 2018) Sweden
Canada UK
Germany
1 USA 2,028
France
USA China
2 China 1,011 Israel Japan
India
3 UK 392

4 Canada 285

5 India 131

6 Japan 127

7 Israel 121
AI Companies’ Global Distribution
8 France 120 >700 100-200

9 Germany 111 300-700 <100

10 Sweden 55

Source: Tsinghua University, CB Insights, Asgard, Roland Berger 37

 Global AI Funding
China vs USA performance
China publicly declared to be at the forefront of AI globally by 2030 and envisioned to build USD 1 trillion-worth AI market.

“China beats US in AI equity

funding for the first time.”
- CB Insights, 2018
Growth Rate 83% 265% 17%

Others
$7B 14%
$5B
($3B)
$3B $3B
$2.5B
$2B
US$ 15.2B China
Total AI startup 48%
funding (2017) ($7B)
USA CHINA OTHERS*
2016 2017
*Others include Canada, France, Germany, UK, India, Israel, Japan, and Sweden
USA
38%
($5B)

38
Source: CB Insights, Asgard, Roland Berger
 Top AI startup companies
China and USA duopoly currently houses the leading AI hubs
China’s Beijing is set to be the next World’s leading AI hub as it builds its USD 2.1 billion AI research park.

10 leading AI startups
(based on funding in US$ millions)

1 Bytedance $3.1B News & Media

2 SenseTime $637M Cross-Industry

3 Face++ $608M Cross-Industry

FinTech &
USA
4 Upstart $585M
Insurance
California
5 Affirm $525M FinTech &
Insurance

6 UBTech $521M Robotics

7 Flatiron $313M Healthcare

8 Zoox $290M Automobile

9 CrowdStrike $281M Cybersecurity

10 ZestFinance $268M
FinTech & Beijing
Insurance

Projected Top 4 AI Startup Hubs in the World

CHINA
1 2 3 4
Guangdong

Beijing San Francisco Shenzhen New York City

China California, USA Guangdong, China New York, USA
39
Source: Asgard, CB Insights
 Artificial Intelligence and Robotics
Efficiency vs. Job Loss
Artificial Intelligence will benefit diverse industries but it will transform the global workforce.
Work displacement and the need to upgrade skills are inevitable.

Agriculture Banking

• Advance data analytics

6 out of 10 current occupations have
• Farmers will have the tools to
• Fraud detection and risk more than 30% of activities that are
get the most from every acre
• Feeding an additional 2 billion management technically automatable
people by 2050 • Chatbots and virtual assistants
• Customer profiling

Environment Healthcare

• Enhance disaster preparation • Improved quality of life

and national security • Advancement of treatments
• Provide early warning • Virtual assistants
• Coordination of emergency • Reduced costs
information capabilities
• Clean-up of pollution

IT-BPM

• Automation of repetitive functions

• Faster response time
• Higher productivity
• Optimizing processes
• Less operational costs
40
Source: CB insights, Financial Times, The Economist, McKinsey Global Institute Analysis
TOURISM
 Asia Pacific International Tourist Arrivals
FY 2016 vs. FY 2017
Philippine tourist arrivals grew by 11% from 5.97 million in 2016 to 6.6 million in 2017.
China significantly affects tourism in Asia as seen in Taiwan, South Korea and the Philippines.

1.32
TOTAL
GLOBAL
TOURIST
ARRIVALS BILLION

324
TOTAL
ASIA
PACIFIC
TOURIST
ARRIVALS MILLION

TOTAL
PHILIPPINE
TOURIST
ARRIVALS
6.6
MILLION

- 2016 - 2017 42
Source: Official Department of Tourism from each country, WEF Travel and Tourism Competitiveness Report 2017, World Trade and Tourism Council
 China Exploring the World
Tourism and expenditure preferences
Outbound Chinese tourists is forecasted to grow +7.6% in 2018 to hit 156 million travelers; so far 77 million Chinese tourists have
travelled around Asia between Jan – Sep 2018.

In 2017, Chinese Tourists contributed the most to Global Tourism Revenue with USD 257.7 billion. Chinese tourists prefer to spend on
experiential activities.

43
Source: Euromonitor International, UNWTO, Telegraph UK
 Top 20 Destinations of Chinese Tourists
FY 2017 vs. YTD September 2018
Chinese tourists prefer traveling to Asian countries due to proximity, tourist attractions, safety, simpler visa procedures, friendliness of locals
and affordability.
Only 1.1% of outbound Chinese travelers visited the Philippines. This is expected to grow due to the administration’s push for stronger
ties between Philippines and China.

FACTORS CHINESE TOURISTS

CONSIDER WHEN TRAVELING

56% Beauty & uniqueness

of tourists attractions
47% Safety

45% Simpler Visa Procedures

35% Friendliness of locals

to tourists
34% Affordability

Source: Euromonitor International, Nielsen Global, Asean Briefing - 2017 - 2018

 Philippines Tourist Arrivals
Top 10 Tourist Market
Despite historical events, the Philippine tourist arrivals increased 600% in 25 years.

The top 3 source markets of Philippine Tourism are: South Korea, China, and USA. South Korea remained the top source market with 1.7 million arrivals which significantly recovers from
the Asian and Global Financial Crisis. While China surged to 1.1 million arrivals in 2018 from 968K in 2017.

Since the Xi Jinping administration, there was a notable increase in Chinese tourist arrivals. China dislodged the USA as the 2nd largest source of tourist arrivals, and has continued to
strengthen its position in 2018.

45
Source: Department of Tourism
 Alternative Airports to NAIA
Going to the Philippines without landing in Manila first
Weekly,and
Clark Davao
there are good
are currently alternative
364 entrance
International points
arriving for incoming
flights travelers
to the gateway trying
cities of thetoPhilippines.
bypass Manila’s congested
Tourists can airports
directly access theirand
Final
Destination or avoid
traffic-ridden roads.the busy Manila airports for a smoother travel experience.
In 2017, out of 136 countries the Philippines ranked 65nd in Air Transport Infrastructure, 107th in Ground and Port Infrastructure
and 126th in Security and Safety.

COMPETITIVENESS RANKING
(out of 136 countries)

2011 2017

Overall Ranking 94 79

Price Competitiveness 20 22

Safety & Security 109 126

Business Environment 95 82

Air Transport Infrastructure 80 65

Ground & Port Infrastructure 114 107

Tourist Service Infrastructure 98 87

Natural Resources 70 37

Sources: ourairports.com
46
 Gateway City Connectivity
Weekly Flight Departures (2018)
Visitors can land in Clark, Kalibo, Cebu, Puerto Princesa, Bohol, Iloilo and Davao, and easily travel to other destinations from these cities.
Cebu is largest travel hub among gateway cities excluding Manila.
The Philippines is more connected than ever by air through these gateway cities.

Puerto
Gateway City Cebu Clark Davao Iloilo Kalibo Bohol
Princesa

Cebu 42 56 40 20 22 8

Clark 35 25 3 10 14

Davao 53 25 10 11

Iloilo 40 3 10 7

Kalibo 35

Bohol 8 14 11

Puerto
Princesa 27 11 7
47
Source: flightsfrom.com
 Cebu
The Queen City of the South
Cebu received over 900,000 inbound arrivals between January to September, 2018. The development of Mactan-Cebu International
Airport T2, will boost passenger capacity from 4.5 million to 12.5 million.
The Philippines and South Korea are working together in constructing the new Cebu International Container Port. South Korea has
provided a USD 172.64 million loan for the project. The facility will further boost economic activity in Cebu.

Inbound Arrivals Mactan-Cebu • Approximately 65,000 sqm in size,

Year 2013 2014 2015 2016 2017 2018* International with 895 sqm dedicated to duty-free
Cebu 491,500 501,400 565,300 687,300 783,500 901,100
Airport T2 shopping
*Jan – Sep 2018
• Terminal 1 will be for Domestic

Cebu – • A 8.5km bridge by Metro Pacific Flights, and Terminal 2 for

Cordova Tollways Dev’t. Corp. which will link Cebu International Flights

Link City and Cordova. The project will cost • Inaugurated last July, 2018
between PhP26-29 billion to construct.
Expressway
• 40,000 vehicles daily (forecasted)
Cebu • It will be built on a 25-hectare
The bridge started construction last July
•
International reclaimed land in Consolacion, Cebu.
2018 and is set to be completed by 2021.
Container • It can accommodate 2,000 20-foot
Port TEU vessels to provide an efficient
Cebu BRT & • A BRT system over a 23 km that traverses
transport infrastructure for the flow of
LRT through Cebu City’s central business district
• Phase 1 of the LRT project will have two goods in the Visayas region
lines that will service the Metro Cebu area • Target completion by 2020
• Phase 1 of both projects are targeted to
be operational by 2020

48
Source: Euromonitor, FlightStats, PhilStar, BusinessWorld, Cebu Daily News
 Clark on the Rise
Next gateway to the Philippines
Clark International Airport’s undergoing improvements will effectively enable the facility to service 12 million passengers per year
which would mean that the area should expect an influx of foreign and local visitors in the coming years.
About 100 km from Manila, visitors can enjoy Clark’s World Class Golf Courses, Hotels and Resorts, Casinos, and Recreational Activities.

Inbound Arrivals Clark International • Designed by architects Budji Layug and

Airport T2 Royal Pineda
Year 2013 2014 2015 2016 2017 2018* • Approximately 82,600 sqm in size
Clark 367,700 400,800 448,900 615,500 663,100 707,700 • Would boost the airports capacity from 4
million to 12 million passengers.
*Jan – Sep 2018
• Target completion by 2020.

Number of
Hotel Development Opened
Rooms
Marriott Hotel September 2018 260 Clark Global City • A modern, state-of-the-art, 177-hectare
development
Hilton Clark • Offers the perfect blend of prime real estate
4Q 2017 268
Sunvalley Resort and facilities for all your business needs and
lifestyle pleasures
Midori Hotel and • Secured a 50-year long-term lease
May 2017 111
Casino contract (with the option to renew for
an additional 25 years) with CIAC for the
Quest Hotel and development of the parcel of land in the Clark
August 2016 303
Resorts Freeport Zone (until 2085)

Radisson Park Inn

December 2015 154
Clark
Xenia Hotel May 2015 145 New Clark City • Partnered with Filinvest Land for the
development of initial 288 has
Royce Hotel and 2015 • The Bases Conversion and
145
Casino (renovation) Development Authority has partnered
with Japan Overseas Infrastructure
Widus Hotel and Investment Corporation for Transport
2008 233
Casino Clark and Urban Development for the
development of its master plan
49
Source: Euromonitor, FlightStats, PhilStar 49
 Davao
A gateway to the Southern Philippines
Cathay Dragon launched weekly flights from Hong Kong to Davao last October 2018, and will be flying four times a week.
The Department of Public Works and Highways has allocated PhP 56 billion in 2018 for the region’s infrastructure projects that will
improve Davao.

Inbound Arrivals Davao Intl • Part of the “Build, Build, Build”

program
Year 2013 2014 2015 2016 2017 2018* Airport • The six-year modernization project
Davao 77,100 85,600 128,600 124,900 133,600 141,600 Improvements for the airport will cost PhP 40.57
billion
*Jan – Sep 2018 • The project will improve and
enhance the current facility for better
airport operations and efficiency.
Davao Food • Handled by the Department of
• Set to start in 2019
Agriculture and LGU of Davao
Terminal • Built with a PhP 70 million budget
Complex on 25 ha of land
• Gives small-scale farmers an
avenue to sell their produce and to Davao Coastal • Entire project costs PhP 19 billion,
and will span 35km
grow their business. Road • Construction started in 2017
• Opened last October 2018
• First of four segments set to be
completed by the end of the year and
will cover 1.7km
• Target completion by 2022.
BPO Locators in Davao
• Matina IT Center 3, Felcris
Centrale, Robinson’s Cyberpark
– Cybergate Delta Davao have
leased a total of about 22,100 sqm
in 4Q 2018 despite Martial Law.

50
Source: Euromonitor,PhilStar, DPWH, Manila Bulletin, Sunstar, Philippine News Agency
 Its more fun in the Philippines
Home to the best beaches in the world
The Philippines continues to be globally recognized for its natural attractions.

TripAdvisor’s 2018 “World’s best beaches” –

Boracay ranked 1st among 25 beaches.

Flight Network’s 2018 “Asia’s top 50 Beaches list” –

El Nido ranked 1st among 50 beaches.

Travel and Leisure 2018 “World’s Best Awards” –

Palawan ranked 6th among 15 islands.

Conde Nast’s 2018 “Best Island in the World” –

Siargao ranked 1st among 30 islands.

Conde Nast’s 2017 “Best Island in the Word” –

Boracay ranked 1st among islands.

Conde Nast’s 2017 “Best Island in the World” –

Palawan ranked 2nd among 30 islands.

51
Source: Department of Tourism, Travel and Leisure 2018, Conde Nast Traveler, TripAdvisor 2018
 SUSTAINABLE
MASTERPLANNING
 Sustainable Masterplanning
Global Top Pollutants
Asian countries are largest contributor to ocean plastic.
China produces more plastic waste than the combined wastes of the other top 5 countries.

Source: Earth Day Network (2018), Jambeck J. R. et al. “Plastic Waste Inputs from Land Into the Ocean” (2015). 53
Waste Estimates for 2010.
Sustainable Masterplanning
Water Pollution

1 CHINA

Sanya Beach – Hainan Province Qingdao Beach – “Slimy Green Algae” Beach in Anquan Village, China

2 INDONESIA

Kuta Beach - Bali

54
Sustainable Masterplanning
Water Pollution

3 THAILAND

Phuket Beach Pattaya Bang Saen Chonburi

4 PHILIPPINES

Pasig River Isla Verde, Batangas

55
Sustainable Masterplanning
Bonifacio Global City | Circuit Makati (2008 vs. 2018)

Bonifacio Global City, 2008 Bonifacio Global City, 2018

Circuit Makati, 2008 Circuit Makati, 2018

56
Sustainable Masterplanning
Cebu Business Park | Matina IT Park (2008 vs. 2018)

Cebu Business Park, 2008 Cebu Business Park, 2018

Matina IT Park, 2008 Matina IT Park, 2018

57
Sustainable Masterplanning
Boracay | El Nido (2008 vs. 2018)

Boracay, 2008 Boracay, 2018

El Nido, 2008 El Nido, 2018

58
Sustainable Masterplanning
Bonifacio Global City

SOUTH CEMBO
60K – 90K WEST REMBO
95K – 135K

PITOGO
120K – 160K

EAST REMBO
BONIFACIO GLOBAL CITY 30K – 40K
480K – 1.2M

COMEMBO
35K – 40K
FORBES
300K – 350K
PEMBO
35K – 55K

59
Sustainable Masterplanning
Ortigas Center

GENERAL CAINTA
3K – 6K

GREENHILLS EAST VISTA VERDE

200K – 240K GREEN MEADOWS 4K – 8K
120K – 160K

CORINTHIAN
230K – 250K LIFE HOMES
22K – 25K
VALE VERDE
150K – 180K

ORTIGAS
250K – 400K

GENERAL PASIG
VALE VERDE 10K – 50K
150K – 180K
KAPITOLYO
80K – 120K

60
 About
LEECHIU PROPERTY
CONSULTANTS
 MISSION
To deliver superior value and profitable real estate solutions for like-
minded partners through local, dynamic & insightful property-related
expertise in corporate leasing and investments.

To be the advisor of choice who provides the most strategic and

outstanding property-related advice, solutions and services to our
customers. Our company values unity, integrity and passion for excellence.

VISION
Together, our firm, redefines the real estate industry by being a catalyst of
sustainable growth, through principled and expert property consulting
advice and action.
 Our Services

Occupier Project IT-BPM Site Investment Research &

Solutions Leasing Selection Sales Consultancy

The Philippines’ deepest bench of

seasoned real estate advisors & brokers
 Occupier Solutions
Occupier Solutions transactions to date
Closed Deals Live Deals
690,000 SQM 520,000 SQM
Our Clients

IT-BPM Site
Selection Clients
 Project Leasing
We also advise and support landlords, building owners and real estate developers. Our leasing experts
create and implement strategies for finding the right tenant mix and ensure maximum occupancy in a
timely manner. Our real estate brokers have managed to lease more than thirty office buildings in Metro
Manila on behalf of developers.

43 projects
Currently marketing
Total of 886,000 sqm
BGC. Citibank Plaza. Ecoprime. Ecotower. Milestone at Fifth Avenue. Twenty-five Seven McKinley.
Twenty-four Seven McKinley. Orē Central Tower. The Curve. W Citycenter. W Fifth Avenue.
W Global Center. W Office at High Street. High Street South Corporate Plaza I and II. One Park Drive.
G.S.C Corporate Tower. Asian Century Center. Sennett Corporate Center
QUEZON CITY. Hexagon Corporate Center. Panorama Technocenter.
The Skysuites Towers. Jackman Plaza I.T. Center. MPIRE Center
ALABANG. Asian Star Building. One Griffinstone Building. Workspace.
MAKATI CITY. Frabelle Corporate Plaza. Liberty Plaza. M1 Tower. MJ Corporate Plaza. Nex Tower.
Century Diamond Tower. 223 Salcedo. Ecoplaza
ORTIGAS. St. Francis Square. Ortigas Technopoint Two. Jollibee Tower. Unioil Tower
BAY AREA. DoubleDragon Plaza. Nexgen Tower. Harton Corporate Center
CAVITE. Suntech iPark. CBC Asia Technozone
CEBU. Latitude Corporate Center. Mabuhay Tower. Mabuhay Tower CBP
Looking to exclusively handle more project leasing appointments
across the Philippines in 2018
 Investment Sales
Sale transactions to date

Closed Deals Pipeline Deals*

PHP 21 Billion PHP 12 Billion
*LPC looking to transact in PHP 12B the next 12 months

Notable deals closed in 2016, 2017 and 2018 include:

✓ Joint Venture of a 1.3 hectare parcel in Makati City
✓ Sale of 10-hectares along C-5 and Ortigas Avenue Extension
✓ Prime commercial lot sale in Bonifacio Global City and Filinvest City
✓ Prime residential apartment building sale in Salcedo Village, Makati
✓ Share sale for apartment company in Kalayaan Avenue, Makati
✓ Sale of office floors in Makati CBD, Ortigas Center and Filinvest City, Alabang
✓ Long-term land lease for a hospitality chain
✓ Industrial land sale to an industrial developer in South Luzon

Source: Investment Sales pipeline as of September 2018

 Research and Consultancy

Our research and consultancy arm allows us to offer to clients a full suite of consulting services
that include business planning, highest and best use studies, market research, project
conceptualization, and project feasibility.

Completed Projects – Highest and Best Use Study

Central Business District:
Taguig and Muntinlupa

Project Cost of Mixed Use developments:

Lakewood, Cabanatuan
PhP 80.9 billion Batulao, Batangas
or USD 1.5 billion Hacienda Looc, Batangas
USD to PHP $1 :53 PHP
Pueblo de Panay, Roxas City
Business Park, Dumaguete City
Matina, Davao City
West Palawan, Puerto Princesa
 CBRE Strategic Alliance with
Leechiu Property Consultants

Source: CBRE Website

 Our Insights. Your Success.

Real Estate Options

DISCLAIMER:
1. This Material has been prepared in good faith and with due care by LPC solely for the information purposes only.
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 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 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 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 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