SM Land Commercial Properties Group

Leasing Guidelines

Currency: Philippine Peso (Php)

Lease Term: Min. 1 year; Max. 10 years

Costs quoted in: Php per square meter per month (Php/sq.m/month)

Annual Escalation: 5% - 10%

Rent Free Months: One (1) to three (3) months for fitout (unit construction/improvements)

Reservation Fee: One (1) Month Equivalent of Rent, credited to the security deposit

Security Deposit: Three (3) months equivalent of Rent, refundable at the end of the lease term
(interest free) after all internal expenses have been cleared.

Advance Rent: Three (3) months equivalent of Rent, to be applied on the first three (3) months of
the lease term, subject to applicable VAT and Withholding Tax.

Common Area Dues: Covers payment for security, maintenance and utility expenses for the common
areas and base building systems.

Rent Review: For lease terms over six (6) years

Renewal: Existing tenants have the first option to renew their lease at a mutually agreed
rate, terms and conditions.

Subletting Rights: Negotiated except for tenant affiliates, subsidiaries, or in case of mergers.

Termination of Lease: Negotiated in the lease agreement and usually subject to forfeiture of the security
deposit plus additional penalties.

Reinstatement: Tenant should surrender the premises in the same condition as it was found at
the lease commencement unless the landlord decides otherwise at its sole
discretion.

Expansion Options: Right of first refusal for premises within the building at a maximum period of six
(6) months.

Handover Condition: Bare shell with sprinklers, smoke detectors and main ducts. If previously
tenanted, “as-is where-is.”
Fitout Works: Plans have to be approved by the landlord and permits submitted before the
actual construction (refer to our office fitout guidelines)

Construction Bond: One (1) month equivalent of rent to be paid before start of fitout. After deducting
construction related charges, balance, if any, shall be refunded within thirty (30)
days from completion of the Fit-Out period and upon full compliance of the
LESSOR’s Fitout Guidelines.

Meter Deposit: Various utility meters supplied and installed by the LESSOR. To be refunded at
the end of the Lease Term.

Vetting Fee: Cost for the review of the Construction Plans.

Permits: The Architect or Interior Designer usually is in charge of applying for all the
necessary permits from both the landlord and local government (e.g. building
permit, work permits, etc.).

Fitout Contractor: Any Architectural finishing contractor and project management services may be
engaged.

Fitout Cost: Costs will vary depending on the design; a mid-cost design is approximately Php
18,000.00–Php 22,000.00 per useable square meter excluding hardware and
technology. Breakdown below:
- Mobilization / de-mobilization
- Permits, licenses, and insurance
- Demolition and dismantling of existing finishes
- Wall and floor finishes
- Glass and glazing
- Furniture, accessories and fixtures
- Electrical works
- Structured cabling
- Security access (card, cctv, etc.)
- Mechanical and sanitary works, if any

Costs Required
Prior to Fitout: - Three (3) Months Advance Rent
- Three (3) Months Security Deposit
- Construction Bond
- Meter Deposit
- Vetting Fee