February 20, 2020

MR. XXXXXX

Dear XXXXX:

Re: Appraisal of an industrial property:

TCT No. 1XXXXX Lot 2-A-8-E-3 (LRC) Psd 5802.
Area: 555 sardines sqm.
Registered Owners: MXXXX Philippines, Inc.

In compliance with your request, I have completed a thorough investigation

and appraisal of the above-captioned property on February 20, 2020. This is
for the purpose of expressing a professional opinion on the property’s
fair market value with due consideration to the following:

▪ Extent, character and utility of the property;

▪ Sales offers and holding prices of similar land;
▪ Local government assessment and zoning system of real property;
▪ Highest and best use of the property;
▪ Income earning potential; and
▪ Marketability of the property.

Attached herewith is the summary of valuation, also containing a brief

analysis of general and specific data utilized to substantiate the appraisal
value. Market data and cost approaches to valuation were employed.

As a result of my investigation and survey, it is my professional opinion that

the aforementioned property warrants a fair market value, as of date of this
appraisal, in the amount of:

FIFTY THOUSAND PESOS ONLY

(Php 50,000,
, , .00)
.

This is to further certify that, except for expressing an opinion of value, I

have no present or prospective interest, either directly or indirectly, in the
property or in the use of this appraisal. As to my best knowledge and
competence, all statements and opinions contained in the report are correct
and in accordance with established and accepted appraisal techniques and
methodology as practiced in the Philippines under the present economic,
social and political conditions.

Should you have questions in connection with the attached report, or any
other queries regarding appraisal matters, please do not hesitate to contact
the undersigned.

Thank you and best regards.

Sincerely yours,

ROBIN GOMEZ
PRC License No.
Email : robingomez@yahoo.com
LIMITING CONDITIONS

1. All existing liens and encumbrances were considered in the

investigation, and the property was appraised under responsible
ownership.

2. The appraiser, by reason of the appraisal, is not required to give

testimonial or attendance in court or to any government agency with
reference to the subject property, unless arrangements have been
previously made therefore.

3. The appraiser assumes no responsibility for title to or liabilities against

the property unless an official request for authentication of owner’s
duplicate copy of titles with ROD files was pre-arranged.

4. No relocation survey was made to pinpoint the exact boundaries of the

property.

5. In the absence of site development plan, it is assumed that the

property, as shown and pinpointed by the representative of the client,
is the property described in the furnished title/s.

6. No structural survey or engineering tests were made, and no

responsibility is assumed for the soundness of the structure or the
condition of the services.

7. The appraiser assumes that the property, as currently used, is not in

contravention of any planning or similar government regulations.

8. Erasures on the appraisal date and values invalidate this appraisal

report.

9. Neither the whole nor any part of this report and valuation, nor any
reference thereof, may be included in any documents, circular or
statement without the appraiser’s written approval of the form or
content in which it will appear.

10. The appraisal report is invalid unless it bears the signature of the
appraiser.
 THE PROPERTY

LOCATION OF THE PROPERTY

The property is an improved industrial parcel located along an unnamed

road, East Service Road, Sucat, Muntinlupa City. It is bounded on the
northeast points 5 to 1 by Lot 1-A-2-A-8-E-2 of the subdivision plan; on the
southeast pts 1 to 3 by Manila Railroad, right of way on the SW., pts. 3 to 4
by Lot 1-A-2-A-8-F and NW pts 4 to 5 by Lot 1-A-2-A-8-H (Road) both (LRA)
Psd -354050. Site is approximately 400 meters from the East Service Road.

Fronting road was observed to be 10 meters wide, concrete-paved provided

with concrete curbs, gutters and underground drainage system.
Neighborhood is mixed development of residential, commercial and industrial
establishments.

NEIGHBORHOOD DESCRIPTION

A neighborhood is a segment of the city, town or municipality, or it may be

an entire community. It may grow and develop, may remain static and/or
deteriorate due to the interaction of both external and internal forces, be
they economic or otherwise.

Being an integral part of a neighborhood, a property should be viewed in

close association with, and in consideration of, its immediate environment.
Thus, the value of a property is usually influenced not only by its physical
characteristics but also by the intertwining social, cultural, governmental and
economic forces.

The property is situated along an unnamed concrete road with mixed use for
residential, commercial and industrial development. Among the
establishments serving as prominent landmarks in the immediate vicinity
include:

▪ SM Hypermarket (formerly Makro)

▪ Tribeca Private Residences of Landco
▪ Rhapsody Residences of DMCI
▪ Union Bank
▪ Petron Gas Station
▪ Sandvik

Sucat is the northern-most barangay in Muntinlupa. ―Sucat‖ has been

always said to be in the city of Parañaque, but it’s not. Parañaque has
no such barangay as Sucat. People had thought Sucat is in Parañaque
since as you can see in SLEX, if you’re in south bound going to Alabang,
Sucat exit is
pointed at the direction where Parañaque is. This is because Sucat exit lies at
the boundary of the two cities. Another thing is the former ―Sucat
road‖. Whenever people pass through the Sucat road, they thought it was in
―Sucat‖ respectively but it’s not, it’s just the road and not the actual
―place‖; also, SM Sucat was named like that because it’s ahead of the
former Sucat road, hence, SM Sucat should be name as SM San Dionisio
since it is situated in Barangay San Dionisio in Parañaque and not in
Barangay Sucat in Muntinlupa city. Consequently, Sucat road in Parañaque
was replaced by Dr. Santos Avenue due to confusion.

―Barangay Sucat is geographically located on a flat higher plain along the

edge of Laguna de Bay. Bounded on the North by Barangay Bagumbayan,
Taguig City, on the South by Barangay Buli and Cupang, and on the East by
Parañaque City and Las Piñas City.

On the otherhand, Muntinlupa City is the southernmost city in Philippine

National Capital Region. It is bordered on the north by Ta g u ig C it y ; to
the northwest by Parañaque City; by Las Piñas City to the west; to the
southwest by the city of B ac o or ; by the city of S an P e d ro , La g u n a ;
and by Laguna de Bay to the east. It is classified as a Highly Urbanized City
with a population of more than 400, as of 2010 and is given the nickname
"Emerald City of the Philippines" by the tourism establishment.
Muntinlupa was once notoriously known as the location of the national
insular p e n it e n t iar y , the N ew Bil ibi d P rison, where
the country's most dangerous criminals were
incarcerated. Consequently, Muntinlupa became
synonymous with the national penitentiary although it has largely
shaken-off this negative image to become one of the most progressive cities
in the country.
Muntinlupa is also home to some of the best commercial establishments in
the metropolis and is the location of A yala Al a b a n g Vi l lage, one
of the country's biggest and most expensive residential communities,
where many of the wealthy and famous live.

DESCRIPTION OF IMPROVEMENT

The 3-storey building looks commercial office building from the outside due
to glass external walls surrounding its side and front facade. But ocular
inspection on its interior proved it as generally industrial in design. All rooms
rd
from ground to 3 floor look like storage area being provided with 2 freight
elevators, adequate fire exits and comfort rooms per floor. Floorings,
sidewalls, ceilings and partitions on all floors are of plain cement.

It is also provided with a nice looking aluminum-clad façade, loading/

unloading dock and parking areas in front. The total useable and leasable
area of the building is approximately 3,440.86 sqm.
 ANALYSIS AND VALUATION OF THE PROPERTY

1. Valuation of Land: By Market Data Approach

The market data valuation method is based on the principle of

substitution which states that ―a prudent man will not buy or rent a given
property that will cost him more to acquire or rent an existing substitute
property of equal desirability.‖

Property valuation using the market data approach requires thorough

research and investigation of sold properties or properties offered for sale.
This is to compare the respective values of the comparable properties with
subject in relation to other essential elements, which include location, size,
shape, elevation, road frontage, and depth.

During the process of price canvassing, one data of recently sold property
was uncovered and evaluated qualifying it as a typical sale. In an effort to
reinforce the indication of value from sold market data, offers for sale which
were deemed comparable were also gathered. However, cash discount or
bargaining allowance of 5-10% was deducted from their selling prices to
take into account factors such as reactions of buyers and sellers to cash
sales, as well as the adverse effects of the current global financial crisis on
the local real estate industry.

There are about three (3) comps that were adjusted accordingly, namely:

Offer to Sell 1: (Market Data 1)

▪ Source: Ramil Alquileta (PRC Broker’s License No. 6153)

▪ Location: Interior of East Service Road, Sucat, Muntinlupa
▪ Area: 9,751 sqm
▪ Remarks: Vacant with elongated shape;
▪ Price: Php 12,300/sqm
▪ Cash Discount: -5%

Offer to Sell 2: (Market Data 2)

▪ Source: Pinnacle (0906-2234718)

▪ Location: Along East Service Road, Sucat, Muntinlupa City
▪ Area: 13,162 sqm
▪ Remarks: Slightly irregular in shape with improvements
▪ Price: Php 15, /sqm (by Abstraction/Allocation method) ▪
Cash Discount: -5%
Offer to Sell 3: (Market Data 3)

▪ Source: Marlon Constantino (821-1287), Broker

▪ Location: Along East Service Road (near Macro), Sucat,
Muntinlupa City
▪ Area: 14, sqm
▪ Remarks: Slightly irregular shape; vacant
▪ Price: Php 18, /sqm
▪ Cash Discount/Bargaining Allowance: -10%

Market Value Analysis on Land

Plottage Usage/
Adjustment (%)
Price Indicated
Offer
Corner Lot

Devt//Elevation
Size

TOTAL
per
Location

Shape
To

Deg. Of
sq. m.
Sell
(Php)

1 11,685 0 0 20 0 0 10 30 15,190 .40 6,076

2 14,250 0 -5 25 5 0 0 25 17,812 .35 6,014

3 16,200 0 -5 25 5 0 0 25 20,250 .25 5,062

Total:1.00 17,152
Total Rounded Off To: 17,

Validation of Adjustments:
1. No adjustment, or zero, indicates nearly a 100% similarity between subject
property and comparable property.
2. A +5 to +20 factor indicates that the subject property is superior to the
comparable property.
3. A -5 to -30 factor indicates that the subject property is inferior to the comparable
property.
4. In several ways, Market Data 1 was assigned bigger weight since it shares
common attributes with subject property as far as location, size, shape and
neighborhood are concerned.

In determining the actual worth of the land, the undersigned also consulted
own networks of fellow brokers, appraisers and practitioners in the realty
profession. Accordingly, their opinions of value on subject property as to
location, size, shape, and other physical characteristics were also gathered
and evaluated.
Final correlation of the comps and value opinions resulted in a figure which
now becomes the fair market value of the land:
Php 555 sardines/sqm x 17, = P 25,500, .00
/ sqm (Rounded-off)

* Zonal Valuation
Revised zonal valuation of properties in Interior area of East Service Road,
Sucat, Muntinlupa City is pegged at Php 3,600/sqm for properties with
industrial classification. This figure was excluded in the comps as they are not
updated data and represents indicative amounts for tax purposes only.

Effectivity
Date
BARANGAY: SUCAT 2-May-97
- - -
CLASSI- 6TH REV.
STREET/SUBDIVISION VICINITY FICATION ZV/SQ.M.
- - - -2, .00
RR
BAYVIEW SUBD DONA ROSARIO RR 2, .00
DONA ROSARIO HEIGHTS RR 4, .00
LAGUNA LAKE TAGUIG MUNT ROAD RR 1,5 RR
PATIO HOMES POSADAS VILLAGE 2,9 RR
POSADAS VILLAGE S EXPRESSWAY 3,6 RR
S' PAGKAKAISA MERALCO STATION 3,1 RR
SOUTH EXPRESSWAY BULI RIV-MUNTI-P'QUE BDRY 5,7
SUCAT UINTERCHANGE-MRR
SUCAT ROAD RD RR 4,3 RR
T M ROAD 1,9 RR
ALL OTHER STREETS 3,2
CR 3,6
GP 1,150.00

2. Valuation of the Improvement: By Cost Approach

The cost approach of valuation is guided by the same principle of substitution

used in the market data method. It also rests on an objective concept of
value—i.e., the value of a property lies on the object itself, and its cost is the
dominant factor in an estimate of value.

Hence:
RCN (Reproduction or Replacement Cost, New)

A. Warehouse with 2-Storey Office and Workers’ Quarters

Ground Floor: 1,107.24 sqm. x /sqm. =
B. Second Floor: 1,166.81 sqm. x /sqm =
 Third Floor: 1,166.81sqm. x /sqm =
Roofdeck 1,166.81sqm. x
Total RCN 4,607.67 sqm

Less: Depreciation (Effective age method)

3/50 years X 100 = 6%

Say
,

B.MACHINERY & EQUIPMENT

2 units of Hyundai Freight Elevator (1, kg. capacity on 3 landings)
RCN:(inclusive of installation & 1 year warranty) P 1,700, .00 Less
: Depreciation say 5% ( 85, .00)
P 1,615, .00
X 2 units
P 3,230, .00


SUMMARY OF VALUATION:
Land Php 26, , .00
Improvements 58,220, .00
Freight Elevators 3,230, .00
Php 87,450, .00

On the basis, therefore, of my ocular inspection, research, investigation and

analysis, it is my professional opinion that the Current Fair Market Value of
subject property as of February 20,2020is:

EIGHTY SEVEN MILLION FOUR HUNDRED FIFTY THOUSAND PESOS

ONLY
(Php 87,450,
, , .00)
.

3. Appraiser’s Conclusions and Recommendations

■ For buying purposes, the final appraised value of the property found in
this report shall serve as the benchmark or lower limit of value.

■ Although price, cost and value are terms which may seem synonymous,
they are only interrelated in the appraisal sense. Price is the actual
amount paid in a particular transaction; Cost is the actual amount spent
to build or put a property into being, while value is the relationship
 between a thing desired and a potential purchaser. In short,
the difference between these 3 concepts is profit since it is
always the prerogative of seller to set a profit margin to cover
for broker’s commission, capital gains tax, back taxes or unpaid
homeowner’s dues (if there is any) for him to establish a selling price of
the property. Although the prevailing market condition is still under
buyer’s market scenario, whereby buyers tend to become more
knowledgeable and unrelenting in negotiating for maximum discount.

■
DEFINITION OF TERMS
FAIR MARKET VALUE - According to USPAP (Uniform Standards of
Professional Appraisal Practice), ―fair market value‖ is the most
probable price in terms of money which a property should bring in
competitive and open market under all conditions requisite to a fair sale, the
buyer and seller, each acting prudently, knowledgeably and assuming the
price is not affected by undue stimulus.

PRICE – is the actual amount paid in a particular transaction

COST – is the actual amount spent to build or put a property into being

VALUE – is the relationship between a thing desired and a potential

purchaser

HIGHEST AND BEST USE (HBU) is the legal and reasonable use over the
economic life of the property which will produce the greatest return and/or
benefits for the investment. It is determined and tested only if the probable
use of the land is physically possible, financially profitable, legally
permissible, and maximally productive in creating an income stream that
when capitalized will result in the highest present value attributable to the
land.

REPRODUCTION/REPLACEMENT COST, NEW (RCN) is a measurement of

the expenditures necessary to produce a similar property to the one being
appraised. This cost may not be the same as the prospective purchaser
would be willing to pay. Depending on several factors, including purchaser
needs, availability or substitute properties, and activities of the buyers, the
cost could be higher or lower than the current value.

DEPRECIATION is any decline in value caused by wear and tear, physical

failures, structural defects, or any consequences of progressive or continued
influence from working or atmospheric or chemical action.

Further, it is the decline in value of an asset due to obsolescence and

inadequacy. Age is also a contributing factor to the depreciation of an asset
because a portion of its useful life has already been consumed. This is
reflected in a reduction of the present worth of the future benefits to be
derived from ownership of the asset.

FUNCTIONAL OBSOLESCENCE is a flaw in the structure, material, or

design that diminishes a building’s function, utility, and value.
RESUME