DATA : Peso // Makati Property Price Data, News & Comments

[drbubb]

HOW DENSE? Is Manila most densely populated place on Earth?

 

Great density, without good public transport, is not a formula for happy living.

And Manila is not an easy place to drive (maybe the worst in the world)

 

(I had this message by email):

 

I read somewhere that Manila City has the highest density of population in the world.

I could hardly believe it so I checked on internet and wikipedia says the same thing. Not only Manila City has the highest, but the second and third cities in the world are also cities of Metro Manila (Pateros and Caloocan). Makati City is the 30th.

No doubt, they do need public transportation...

https://en.wikipedia.org/wiki/List_of_cities_by_population_density

= unquote =

 

Looks dense, but looks less dense than Makati.

Makati has mostly Office space and something like 1 mn people work there:

 

COMPARISON

No. : City---- : Population : Area-km: Area-mi: D./km2: D./mi2 : Country
#1 : Manila-- 1,652,171 [1] 38.55 [2] 14.88 42,857 111,002 : PH
#2 : Pateros 64,147 [1] 2.10 [2] 0.81 30,546 79,114 : PH
#3 : Calooca 1,489,040 [1] 53.34 [2] 20.6 27,916 72,302 : PH
#9 : Delhi 11,007,835 [6] 431.09 [9] 166.4 25,535 66,135 : IN
24 : Pasay--- 392,869 [1] 19.00 [2] 7.34 20,677 53,554 : PH
28 : Macau 591,900[22] 29.90[23] 11.54 19,796 51,271 : CH
30 : Makati 529,039 [1] 27.36 [2] 10.56 19,336 50,080 : PH

 

MAKATI has seemed like a relative "Oasis" in PH, but it is building up fast!

Will it become over-crowded, and less livable, driving people to move to BGC or elsewhere?

[drbubb]

A Cautious note (from May 2015)... a big jump in offices supplied into 2018

 

CBD condos delayed on glut worries -- Colliers

Posted on May 14, 2015

DEVELOPERS have delayed residential projects in the major business districts on concern over a possible glut, while the supply of new office space is expected to peak in the next three years, according to Colliers Philippines.

Cityscape of Makati Central Business District -- BW File Photo

Oversupply worries in the condominium market led developers to delay completion of some projects, Colliers, a property consultancy, said in its first quarter research and forecast report.

“We see a delay in some of the units slated for 2015... so there is an increase in new stock in 2016 and this has a positive effect in occupancy rates,” Julius M. Guevara, Colliers head of advisory services, said in a briefing yesterday.

Still, a total of 31,000 residential units are expected to be delivered in the next three years with nearly 40% of the figure expected by 2016, Colliers data showed.

In the first quarter, the pre-selling residential market in Metro Manila suffered a 46% year-on-year drop in launches, as take up declined by 7.6%, Mr. Guevara said, noting that this has been the trend since two to three years ago.

Likewise, the Housing and Land Use Regulatory Board issued only 48,411 property licenses in the three-month period, only half of the volume in the same period last year with significant decreases seen in the applications of nearly all segments with the exception of non-residential uses.

“2012 was a special year -- there were a lot of interesting projects and given the low interest rate environment, investors were looking at alternative assets to invest in. It’s a buyer’s market and they are waiting for the new developments to be finished before they make their next purchase,” Mr. Guevara said.

Asked to expound on the oversupply in the market, Mr. Guevara said: “For the rental market, we have seen unprecedented levels of construction and completion in the main CBDs (central business districts). It will be more challenging for an investor [to lease out their units] just because of the number of units that will be completed.”

In contrast, real estate firms are ramping up the construction of their office projects in the CBDs with new office supply expected to peak from 2015 to 2017.

“75-80% of that will be taken by the [business process outsourcing] sector,” Mr. Guevara said.

Developers will add 576,439 square meters (sqm) of office space this year, 648,604 sqm in 2016 and 856,104 sqm in 2017 before dropping to 280,465 sqm by 2018, Colliers data showed.

The report covers new office supply in Makati City, Ortigas, Fort Bonifacio, Eastwood, Alabang, Mandaluyong City, Quezon City and Pasay City.

-- Krista Angela M. Montealegre

> http://www.bworldonline.com/content.php?section=Economy&title=cbd-condos-delayed-on-glut-worries----colliers&id=108004

[drbubb]

MORE articles from earlier this year

WSJ :

Property Zooms Ahead in Philippines

Overseas workers, employees in outsourcing fuel residential demand

New residential and commercial developments are springing up in Manila. Photo: TREFOR MOSS/THE WALL STREET JOURNAL

Trefor Moss / April 7, 2015

1 COMMENTS

MANILA—Neighborhoods inspired by Beverly Hills, fast-rising office towers and swanky malls resembling landmarks like St. Mark’s Square in Venice: It might sound like China circa 2005, but this is the Philippines in 2015.

The real-estate sector here is enjoying a boom as new property floods a market usually stifled by low prices and developers notorious for completing projects years behind schedule.

 

Note: Office Growth can underpinned Growth in Residential demand

 

Now, supply and demand are rising fast as the national economy grows reliably at 6% to 8% per year. Property values are increasing steadily, drawing investors. And cash-rich developers, backed by some of the country’s biggest conglomerates, are having an easier time delivering on their promises.

 

In a metropolis clogged with traffic and where millions still live in slums, Manila’s affluent buyers particularly favor newly built “townships”—self-contained districts where homes, offices, shops and schools are packaged together in tidy, linked communities, said Jericho Go, senior vice president at Megaworld Corp. , the real-estate subsidiary of the Alliance Global Group

==

> http://www.wsj.com/articles/property-zooms-ahead-in-philippines-1428423295

 

/ 2 /

Property expert warns of oversupply (in Cebu)

CEBU’s real estate industry is at the risk of facing a glut with the “oversupply” of residential projects, according to an industry official.

Colliers International research and advisory services director Julius Guevara raised this during the recently concluded Cebu Property Summit at the Radisson Blu Hotel. “It’s easier for a glut to develop here in Cebu because there’s a lot of participation, compared to Metro Manila where land (is mainly in the hands) of big developers or the government,” Guevara told local industry officials.

With property development being one of the most attractive investments today, Guevara said more affluent families in Cebu have expanded their business lines to real estate.

However, he advised small and new property players to conduct intensive market research before they decide to venture into real estate development.

==

> http://www.sunstar.com.ph/cebu/business/2015/07/20/property-expert-warns-oversupply-420010

[drbubb]

The Brio in Makati

 

 

 

 

Pricelist : August 2014

 

> http://manila.locanto.ph/ID_334595244/Condo-in-Makati-Preselling-BRIO-Tower-First-DMCI-in-Makati-City.html

> SSC: http://www.skyscrapercity.com/showthread.php?t=1549467

[drbubb]

Ayala Triangle Gardens

 

 

Making it Green

The 126,500-square-meter Ayala Triangle Gardens – North development will generate a new center of cultural gravity in Manila’s established Makati district. The project consists of a 40-story office tower and a 23-story luxury hotel tower set atop a three-story, mixed-use podium. The podium’s unique design connects the development to the district’s bustling activity. With sloped facades that double as green lawns, grand public stairs, cutaway voids that create plaza space, and multiple access points on different levels, the project will serve as an architectural node that enlivens the Ayala Triangle.

The ground plane at Ayala Triangle Gardens creates a welcoming extension of the public realm. The podium contains four levels of retail, office, hotel, dining, and amenity spaces that maximize both indoor and outdoor environs. Its exterior is expressed in two different ways to correspond with the varied nature of its surroundings. On Paseo de Roxas and Makati Avenue, the facade is a glass and metal design that peels away from the podium and integrates with the towers, complementing the urban context. On the other side, the facade—partly covered in grass—slopes down to the ground to provide public space that connects with the natural landscape. Water, trees, a sunken amphitheater, and sweeping stairs are woven into this area of the podium, allowing the development to integrate with the Makati district.

Atop the podium sits the two towers—an office building and a hotel. Their slender and gently curved split-bar forms respond to the site’s unique geometry, while rounded corners and high-performance glass facades maximize views out over the district and to Manila beyond.

This project is expected to achieve an LEED® Gold certification. Its design reduces material redundancies through an efficient integration of architecture and structure, while containing a suite of high-performance features that help to reduce its water and energy use as well as waste.

Ayala Triangle Facts
Location: Makati City, Philippines
Anticipated Completion: 2020
Site Area: 2,400 m2
Project Area: 126,500 m2
Number of Stories: 40
Building Height: 194.60 m
Market: Commercial + Office, Hospitality, Mixed Use

> http://www.som.com/projects/ayala_triangle_gardens__north

 

: :

[drbubb]

Something remarkable - a genuine Free Library - in the Makati area

 

One man's generosity has been appreciated by his community

 

 

Reading Club 2000 is an informal library set up by Hernando Guanlao outside his ancestral home in central Manila, Philippines. Hernando Guanlao, known by his nickname Nanie, wanted to encourage his local community to share his joy of reading.

Guanlao started his library in 2000, shortly after the death of his parents. He was looking for something to honour their memory, and that was when he hit upon the idea of promoting the reading habit he'd inherited.

"I saw my old textbooks upstairs and decided to come up with the concept of having the public use them," he says. So he put the books - a collection of fewer than 100 - outside the door of his house to see if anyone wanted to borrow them. They did, and they brought the books back with others to add to the collection - and the library was born.

At Nanie's Reading Club, there is no membership, borrower's card or ID required. One may keep the books or return them. "I encourage sharing with their neighbors when they are done", Nanie explains.

 

> http://readingclub2000.com/

[drbubb]

The Philippines Peso has been one of the stronger currencies versus the USD

 

AUD - versus SGD, PHP ... update ++ CNY

[drbubb]

RESIDENTIAL vs OFFICE BALANCE : a first look - ( see also below, post #215 )

 

MORE:

> Link- see post #215 : Keeping a Balance ? : OFFICE space versus RESIDENTIAL flats
http://www.greenenergyinvestors.com/index.php?showtopic=18811&page=11

 

This is an interesting report, because it is giving hints of a future dip in rents

Research & Forecast Report, PHILIPPINES 3Q 2015
Rental growth steady amid rise in future completions
> http://www.colliers.com/-/media/phil_knowledge_3q2015.pdf

It does suggest some changes ahead - the supply rises in 2016 and 2017 are going to be huge.
The interesting thing is the Supply surge that was originally forecast for 2015 is not really happening, thanks to delays in completions. But it does seem logical that nearly of the projected supply increases will happen eventually

OLD : Shows completions clustered in 2015-16, especially for Makati (also see post #101)
Location : End2014/ 2015F: + Pct. / 2016F : + Pct . / 2017F : + Pct. / 2018F
=======
Makati -- : : 18,110 / 4,608: +25.4% / 2,017: +11.1% / 1,485: +8.20% / 1,072
B.G.C. -- : : 19,427 / 5,433: +28.0% / 4,895: +28.0% / 2,979: +15.3% / 1,010
Ortigas-- : : 13,633 / 2,756: +20.2% / 1,227: +9.00% / 0,573: +4.20% / 0,422
Rck+Ewd :: 11,706 / 0,000: +00.0% / 0,908: +7.76% / 0,346: +2.96% / 0,914
Total-of-5 :: 62,876 /12,797 +20.4% / 9,127: +14.5% / 5,383: +8.56% / 3,628

 

But that projected 20-25% surge for 2015 is not happening. Instead, we see this:

 

LATEST
Location : End2014/ 2015F: + Pct. / 2016F : + Pct . / 2017F: + Pct. / 2018F / 2019F
=======
Makati - : : 18,337 / 1,000: +05.5% / 4,148: +22.6% / 2,962: +16.2% / 1,072 / 0,598
B.G.C. -- :: 19,427 / 2,779: +14.3% / 6,931: +35.7% / 4,125: +21.2% / 2,831 / 2,482
Ortigas-- :: 13,820 / 2,430: +17.6% / 1,355: +9.80% / 0,899: +6.51% / 0,422 / 0,570
Rck+Ewd :: 11,707 / 0,000 : + 0.0% / 0,988: +8.43% / 0,346: +2.96% / 1,124 / 1,124
===============

Total-of-5:: 63,291 / 6,209 : +9.8% /13,422: +19.3% / 8,332: + 10.0% / 5,449 / 3,919
Tl.condos: 63,291>69,500 :--------> 82,922 :-------> 91,254 :--------> 96,703 /100622


So, Colliers now expects a slight FALL in rents over the next year:

Location- : 2015-Q3 : Midpt/ 2016-Q3F: Midpt: +/- Pct: reported
=======
Makati - : : 595 -1135 : 865 / 573-1118 : 846 / - 2.26% : - 3.39%
B.G.C. -- :: 681-1083 : 882 / 658-1048 : 853 / - 3.29% : - 3.25%
Rockwell-:: 804-1098 : 951 / 792-1076 : 932 / - 2.00% : - 1.79%
(vacancies :

Despite the expected dip in rents, Colliers is forecasting property prices to stay flat

[drbubb]

NO BUBBLE ?

 

PHL far from another property bubble, says Moodys

• in the Business Mirror, dated Sat. Nov. 28, 2015

 

Moody's cites steady growth in Per-capita GDP..

… and BSP's tight-watch on Real Estate lending

 

“Moody's ... Ruled out (describing) the ramping up of property prices... as unwarranted”

“No even close to a property bubble”

 

Because:

• Prices remain in lockstep with anticipated GDP growth – 6% in Q3-2015

• The central bank keeps a tight watch on lending to the real-estate sector

• Limiting of foreign ownership to a maximum of 40%, a deterrent to inflows

• Ongoing growth in commercial property loans (job growth?) will help to support the residential sector

• The central bank has put in place various “stress tests” on bank lending

 

(from another page 1 article on PHL sovereign notes):

• The CB has resisted lowering rates, because GDP growth has continued at a healthy level

• Peso sovereign notes dropped 3% in the last quarter as the govt failed to cut rates

• Policy rates have been held at 4% since Sept 2014

• Goldman Sachs expects upwards pressure on inflation, thanks to the El Nino weather pattern, which is expected to push up inflation by 0.8% with drier weather. The are predicting 2.8% inflation in 2016

 

Growth in Q4-2015 is expected to be above 6%, thanks to more government spending

[drbubb]

Third Quarter Office Market

Select East and SE Asia cities, and expected direction over 2015-2017

 

City--------- : -Rent : vac. : 2015 -16 - 17 :

Hong Kong : 124.7 : 3.3% : Dn : Up : Up :

Manila----- : $25.1 : 4.1%: Dn : Dn : Dn :

Singapore- : $77.9 : 4.4% : Dn : Up : Dn :

Bangkok--- : $28.2 : 5.0% : Dn : Dn : Dn :

Tokyo-------: $84.0 : 5.0% : Dn : == : Up :

Beijing------ : $58.0 : 7.1% : Up : Up : Dn :

Ho Chi Minh: $28.2 : 9.0% : Dn : Up : == :

Shanghai--- : $52.8 : 9.7% : Up : Up : Up :

Seoul-------- : $?3.1 : 9.9% : Dn : Dn : Dn :

---

 

Others: Jakarta 11.0%; Taipei 17.7%; Guangzhou 20.0%

 

Manilas office vacancy rate may shoot up, since there are a large number of projects in the

pipeline with completions in 2016, 2017, and beyond

 

 

Meantime...

Avida has begun its last residential project in BGC* selling at P 150K per SM.

 

That's up from P 89K per SM - back in 2010.

The new project is called Avida Towers Turf, and is at 9th Avenue.

 

There are only 18 units per floor, which is lower density for Avidas class of property

 

Avida Turf is Avidas 8th residential or office project in BGC

 

*It is the last project for which they have acquired land, and land prices have now climbed to levels,

where Avida is no longer buying

[drbubb]

Rockwell Land Corporation has launched Proscenium Residences,

The fifth tower that will complete the 3.6-hectare Proscenium enclave in Rockwell Center, Makati City.

The 59-storey condominium tower will offer 563 units, ranging from 29-sqm studio units to 147-sqm three bedroom units. Amenities include an outdoor tennis court, a splash pad, a floating river, a gym and a dance studio

==

> http://www.ap.jll.com/asia-pacific/en-gb/Research/property-market-monitor-philippines-manila-201511.pdf?0ac77080-874e-4391-84cc-7b98865fb880

 

 

The Proscenium Residences Rockwell: Masterpiece merges art and culture in luxury living
by Louise Maureen Simeon | The Philippine Star | Updated October 16, 2015 |

MANILA, Philippines - Premier developer Rockwell Land is bringing art and culture into the everyday lives of its residents as it launched recently the fifth and last masterpiece in its latest project, The Proscenium.

 

Rockwell Land continues to outdo itself with the rise of The Proscenium, adding 3.6 hectares to the 15.5-hectare Rockwell Center. The newest addition targets to elevate the Rockwell lifestyle to even greater heights and further attest to its pinnacle designs and architectural expertise.

 

> SSC : http://www.skyscrapercity.com/showthread.php?t=1469065&page=46

Rockwell Center at dusk

[drbubb]

Makati Property - News articles

 

Makati is most expensive housing market in Philippines ...

Oct 19, 2015 - An average salaried Filipino with more than 20 years of work experience will need over a century's worth of his salary to afford a house in Makati...

 

How Millennials are transforming Philippines property market

Oct 26, 2015 - Speaking at the APAC Real Estate Investment Summit in the country recently, CBRE Philippines Chairman, Rick Santos, described the ...

=== ===

 

MANILA, Philippines - An average salaried Filipino with more than 20 years of work experience will need over a century’s worth of his salary to afford a house in Makati while it will only take at least four months for the same salaried worker to afford a home in Bulacan, global online property portal Lamudi said.

In its latest report, Lamudi Philippines analyzed how long does an average Filipino employee should work to be able to buy a house in Makati and San Jose Del Monte, Bulacan, the country’s most expensive and most affordable housing markets, respectively.

As for Filipino minimum wage earners, the Lamudi report showed they need to work some 1,449 years in order to afford a house in Makati, while three years’ worth of their income would enable them to buy a house in San Jose Del Monte.

Lamudi said average house price currently range from a high of P184 million for Makati to a low of P495,999 in San Jose del Monte, Bulacan.
. . .
Experts believe that the Philippines’ youthful and educated labour force is the key to unparalleled growth in the country’s property market, reports The Manila Times.

With a median age of just 23, the Philippines has one the youngest labour forces in the world, which is especially impressive when compared with ageing Japan where the median age is 46.

Speaking at the APAC Real Estate Investment Summit in the country recently, CBRE Philippines Chairman, Rick Santos, described the phenomenon as turning the “labour force into the new people power”.

These younger Millennials, often part of the Philippines’ burgeoning business process outsourcing (BPO) sector, have enough of this ‘people power’ to dictate the trends of the real estate market: the increase of mixed-use developments has been attributed to their desires to live and work in the same location, while hotels are becoming increasingly more connected and competitive in price as they forgo the luxuries previous generations valued.

“They are value conscious,” said Al Legaspi of developer Ayala Land Inc. “They want to make sure they put they money in things that count.”

[drbubb]

Alphaland Makati Tower photos - this patch of North Makati is developing fast:
1

2

3

AND here's the view from Lerato, which is next door... That's Jazz in the Middle - note the high density

[drbubb]

Megaworld on Makati's Competitive advantages

 

 

> http://www.lamudi.com.ph/journal/why-makati-remains-the-preferred-investment-destination-in-metro-manila/

EXCERPTs:

+ Land values in the Makati CBD has risen by 2.43 percent, hitting an average Php463,700 per sqm

+ Worsening traffic conditions, which if taken in a different context also means that business is booming and commercial growth is far from dying down, have also contributed to more Makati-based employees looking to live closer to their work. This has kept rental rates in the city stable

 

Costs Remain Competitive

While the city of Makati is unquestionably the costliest city to be based in, it is still comparatively more affordable than the other major cities in Southeast Asia, making it a preferred choice for foreign-based investors.

From a residential standpoint, rental rates may have risen to 1.5 percent for the third quarter of 2015, but this rise is welcomed by analysts as it is dispels the rumor of an impending real estate bubble. And as mentioned, Makati is still more affordable when compared to others in Southeast Asia, with stamp duties to be paid in a places like Singapore good enough for the purchase of a condo (in Makati)

===

 

All true.

But my main concerns for residential rents and values are:

+ The huge rise in completions that Colliers expects in 2016 (4,148 units) versus 2015 (now estimated at just 1,000, rather than the 4,608 that had been forecast) - see post #208, above

+ A slowdown in the global economy is expected in 2016-17 and beyond, and that may impact on the high grow expected for the Philippines

 

=== ===

[drbubb]

Keeping a Balance ? : OFFICE space versus RESIDENTIAL flats

This comparison is very interesting.
We cannot assume that everyone working in Makati will be able to afford to live there. In fact, most of the jobs there will not provide sufficient salary, but it is an interesting comparison to make. And here it is for BGC too.

First a simple ratio: if each desk represents a job, and each 5 sqM. is room for one job, then how many office-type jobs are in Makati, and in BGC?

Area- : End 2014 space / Sq-M= Estimated jobs
Makati : Office 2,847,397 / 5.0M = 569,479
B.G.C. : Office 0,975,157 / 5.0M = 195,031

Comb. : Office 3,822,454 / 5.0M = 764,510 jobs

 

Some of these people will want to live in Makati / BGC. and some will want to live elsewhere further away, but maintain a small flat near their office so that they can travel to /from work on key days (during the week perhaps), and not face the large traffic jams that ensnarle Greater Manila. So there a real demand.

 

Let's compare the number of condo flats in Makati/BGC with the office space:

 

Area- : End 2014 space / Condos= Office SqM per condo
Makati : Office 2,847,397 / 18,337 = 155.3 SqM
B.G.C. : Office 0,975,157 / 19,427 = 50.20 SqM
M./bgc : Office 3,822,454 / 37,764 = 101.2 SqM

 

These numbers pass my "make sense" test.

I assume that average condo might be 40sqM, and thus: 37,764 condos in Manila/BGC make 2.26 million SqM.

if there are 1.5 working persons per condo, then there are enough flats for just 56,646 workers in Makati.

The rest live in houses - where the stock is not increasing much - and is probably shrinking,

Obviously, most of those workers live outside Makati / BGC and commute to their jobs in the countries top CBD's..

 

If my crude estimates are accurate - then only maybe 7.4% of the people who work in Makati are actually housed in Condos there.

As I said, the rest live in houses, or commute from elsewhere. In practice, the percentage is lower, because some condos are empty,

held for overseas owners, with some also lived in by visitors or tourists - people who do not work in Makati.

 

The big jump in condo supply may be easily absorbed by workers who would like to live closer to their offices.

And a dip in rents, if it comes, might make those condos more affordable.

 

The Shifting Balance

Let's look at a simple ratio - of Office space to Condos, and see how it is shifting over time:

 

-------- : ------ End 2014 ------ : : ---- End 2015 -est-- : :----- End 2016 -est-- : : ---- End 2017 -est-- : : ---- End 2018 -est-- :

AREA : 0ffice /Condo: Ratio : 0ffice /Condo: Ratio : 0ffice /Condo: Ratio : 0ffice /Condo: Ratio : 0ffice /Condo: Ratio :
Makati : 2,847 / 18.33 : 155.3 : 2,850 / 19.33 : 147.4 : 2,850 / 23.49 : 121.3 : 2,850 / 26.45 : 107.8 : 2,910 / 27.52 : 105.7 :
B.G.C. : 0,975 / 19.43 : 50.18 : 1,162 / 22.21 : 52.32 : 1,477 / 29.14 : 50.69 : 1,817 / 33.26 : 54.63 : 2,000 / 36.09 : 55.42 :
comb.- : 3,822 / 37.76 : 101.2 : 4,112 / 41.54 : 98.99 : 4,327 / 52.63 : 82.22 : 4,667 / 59.71 : 78.16 : 4,910 / 63.61 : 77.19 :
Ortigas: 1,299 / 13.82 : 93.99 : 1,380 / 16.25 : 84.92 : 1,440 / 17.61 : 81.77 : 1,455 / 18.50 : 78.65 : 1,494 / 18.93 : 78.92 :
Rockwl.: 0,??? / 4.159 : ?? ?? : 0,??? / 4.159 : 00.00 : ???? / 4.159 : 00.00 : ?? ?? / 4.505 : 00.00 : ?? ?? / 4.997 : 00.00 :

============

 

When I examine this data carefully, I am less worried about a possible large correction, than I was before.

Main thing which lends confidence is the rapid rise in Office space, mainly in BGC.

The jump from 975k sqm at 12/2014 to 2,000k sqm at 12/2018 is a huge jump of +105 %.

 

If those offices fill up, which seems likely then there will be a big jump in jobs in the area, and that will help greatly

to fill up the new condominiums. In fact, the rise in condos over the same period, from 19.43k to 36.09k, is only +85.7%..

Thus, the balance ratio in BGC shifts from 50.18 to 55.42 - ie there should be more office space (and more jobs?) in BGC

for every apartment at 12/2018 than there was at the end of 2014.(!)

 

Even so, the market will need to be monitored in 2016-17 in particular given the expected large jumps in condo supply:

Makati : +21.5% + 12.6%, in 2016, and 2017, respectively; and +31.2% + 14.1% in BGC //

Combined is : +26.7% in 2016 (!), and +13.5% in 2017.

 

The traffic jam between Makati and BGC is likely to get worse, and Makati remains more "walkable"

/sidebar:

In terms of getting to and around the two cities, Makati CBD is much more accessible than Taguig BGC because buses and jeepneys that come from EDSA and other cities directly pass through the Central Business District. Meanwhile, to get to Bonifacio Global City, one has to get down in Makati or Taguig and take another jeep that goes inside of BGC. Both cities implement strict traffic rules: buses and jeepneys can only pass through and stop at specific points in the major roads. But since Makati has more one way roads, flexibility in driving and commuting is greatly limited in the CBD. Buildings are closer together in Makati, making it easier for pedestrians to get from point A to point B. In addition, pedestrian underpasses make crossing roads safer along Ayala Avenue. /

- See more at: http://ffemagazine.com/buying-beyond-home-taguig-makati/#sthash.F8BUsAq3.dpuf

 

Makati has no new offices in those two critical years, so landlords will need to attract new tenants who want to live closer

to their existing jobs. That is possible, of course, but they will need to compete with the existing supply, and so some

price cuts may be required.

 

BGC is also filling up with people and traffic

 

Overall, the very high RATIO (r155.3 at end 2014, falling to r105.7 at end 2018, must mean that there are employees who want to live closer to their jobs, if they can find an attractive place to live and a reasonable cost.)

I reckon that a large number of people who work in Makati now live in BGC, and they endure the traffic jams between the two locations, because they like the more spacious and more carefully planned environment in BGC. But as BGC us built out, the local BGC traffic jams will get worse, and the environment may seem more similar to Makati. So some of those living in BGC may shift back to Makati. Even if they do not, people living in other locations, such as Queson City, may prefer to live in Makati and walk to work.

===

 

> Note: Base data is from : Colliers Report-Q3
Colliers : EXCERPT comment on rents was:

"An average rental growth rate of 1.5% was observed during 3Q 2015 for premium residential condominium property in the major CBDs. The average monthly rent for premium three-bedroom units in Makati CBD amounted to PhP875 per sq m for the period, higher by 1.57% QoQ; along with Fort Bonifacio which also increased by 1.26% QoQ (PhP882 per sq m). Growth in rents was highest in Rockwell at 1.82% QoQ (PhP951 per sq m).
Should the completion of an unprecedented 13,400 additional units in the major CBDs by the end of 2016 materialize, Colliers foresees a downward correction in rental rates by as much as 5% by the end of 2016. With an estimated 60,000 units being completed in the entire Metro Manila area by the end of 2015, plus another 51,000 units in 2016, leased condominium units in the fringe areas will compete with available units in the major CBDs. However, worsening traffic conditions have made renting residential units in the CBD a more practical proposition for employees during the weekdays; this phenomenon may soften the impact of a more competitive leasing environment amid elevated levels of condominium stock."

[drbubb]

Park Terraces / Garden Towers location (surrounded by hotels) - from Ayalaland Premier

 

 

Goodbye, Intercontinental Manila
by Margaux Salcedo | Philippine Daily Inquirer | Sunday | November 22nd, 2015 | 12:04 AM

And yet another landmark Makati building will be torn down. The Intercontinental Manila will close its doors on Dec. 31.

 

 

:

Intercon on the map ... Read More: Source

The Zobels will tear down the Leandro Locsin-designed building, according to its statement, to make way for the redevelopment of “Ayala Center Makati, including the construction of an intermodal transport facility.”

What's coming to this site?

==

> http://www.skyscrapercity.com/showthread.php?t=527303&page=128

[drbubb]

One Central comment - some room for improvement

 

(Here's a Note from a friend who lives in Makati already):

 

 

Recently I spent more time in One Central than planned due to the big typhoon we had in the province. So far I am really not impressed with the management of One Central. The building is new but I can already see some areas not well maintained in several parts of the building. I hope it will improve or the building won't age well.

I asked the brand and color codes used inside the units to many employees from maintenance engineers to managers but they do not know. Maybe later... which is the polite way to say never in Philippines.

Old Price List - from Aug. 2013 : source : example: 1BR: P.7.62mn / 46.5 = P 163.9K psm (before any discounts?)

I asked how to set an autopay to pay the monthly dues and it's just impossible. Monthly dues should be paid monthly by cash or cheque and even paying them in advance seems to be a problem.

I also asked the management what happened to the "Forest Park" which was one of the highlights of the One Central project. Today this area is unfinished and looks bad (I pity the guys who bought the units just over it)

They replied that they had problems with the fountains and so they just stopped that part. Maybe they will convert it into an ordinary garden in the future... or not. There is no plan at this stage.

... when buying pre-selling it's important to keep in mind that the project plan is just a plan which can be changed anytime at the developer's convenience. Buyers are not protected by law like in other countries.

The good part in our experience with One Central is the way the units are designed and the quality of appliances and finishing inside the units. I'm happy with that part.

[drbubb]

Growth estimates:

.

Philippines GDP Annual Growth Rate - Trading Economics
www.tradingeconomics.com/philippines/gdp-growth-annual
Nov 26, 2015 - GDP Annual Growth Rate in Philippines averaged 5.12 percent from 2001 until 2015, reaching an all time high of 8.90 percent in the second ..

.

/ 2 /
Philippine economy grows 6% in Q3 | Business, News, The ...
www.philstar.com/business/2015/11/.../philippine-economy-grows-6-q3
Nov 26, 2015 - Balisacan noted that the 6 percent in the third quarter of 2015 is an encouraging sign of a steadily growing economy ... Philippines's growth rate.

.

/ 3 /
Philippines: Economy | Asian Development Bank
www.adb.org/countries/philippines/economy
The forecast for growth in the Philippines in 2015 is trimmed from Asian Development Outlook 2015 report. However, growth is projected to quicken in 2016.

[drbubb]

(Comments Received by email):

Subject: Interesting article on banks moving jobs to lower cost cities.

Wonder if we can see good evidence of this into Philly and Manila
- W.
"Morgan Stanley will be straying ever further from its Wall Street roots in the coming months as it shifts more operations to lower cost cities like Mumbai and Budapest as it aims to slash costs.
The investment bank on Tuesday announced an initiative to cut up to $1 billion by 2017 by using technology and outsourcing jobs now in its New York headquarters and other higher cost cities. However, it declined to give specific details about the number of jobs it would move to lower cost centres.
"We have too many employees based in high-cost centres doing work that can sensibly be done in lower cost centres," (CEO James) Gorman said on a fourth-quarter analyst call with analysts.
http://www.reuters.c...g-idUSKCN0UX2RN


"Manila already one of the top BPO cities and I am sure they will get more. "
- R.

BGC has a HUGE expansion of office space underway, much of it is for BPO's, so they willl appreciate the business.
And maybe if all those offices get filled then the huge increase in condos, like 20-30% in a year, will get absorbed soon enough the keep rents and prices from sliding lower. Most people including Colliers seem to think the absorbtion will happen.
Philadelphia office rents might get a nice boost, since most of the high rises coming in are residential in Philly.
- DrB.

[drbubb]

Manilans learning to enjoy the taste of luxury

Locals in the Philippine capital of Manila are becoming more and more open to spending on luxury goods and services.

 

Construction of the Conrad Manila hotel, located in the center of the capital, is almost complete, as shown in this December 2015 photo.

They go to expensive foreign hotels and buy high-priced fruits. The growing number of middle-class earners support the consumption boom in a way, but another significant factor may be the typical mindset of locals about spending.

A large, white building being constructed near Manila Bay is the Conrad Manila, slated to open this year. The first Conrad-brand hotel in the country, under Hilton Worldwide Holdings of the U.S., has about 350 rooms in the eight-story building that overlooks the bay. Guests can enjoy sunset over Manila Bay from rooms with a view of the sea.

. . .

Per-capita gross domestic product in the Philippines is projected to reach $3,000 this year. With the growing number of middle-class citizens, the country is in the midst of the stage in which consumption can grow significantly. However, the current jump by consumers to luxury items may not reflect the real life of locals.

==

> http://asia.nikkei.com/Politics-Economy/Economy/Manilans-learning-to-enjoy-the-taste-of-luxury

 

Meantime, below the surface, there are some crosscurrents.

Many Filipinos are employed as OFW (Overseas Foreign Workers), and many work in the oil sector.

With oil prices well down, some are losing their jobs, with little prospect of near-term re-employment

[drbubb]

There's Plenty of Optimism about 2016 Growth

 

Shaky start, cautious optimism

Business Mirror-6 hours ago

Shaky doesn't necessarily mean the Philippine economy will slow ... For instance, with a new administration in place, a high growth rate in the ...

Fastest in Asia-Pacific: Maybank Kim Eng sees Philippine GDP at 7%

Philippine Star-16 Jan 2016

The GDP growth of the Philippines would even overtake China's projected ... at six percent, and the special deposit account rate at 2.5 percent.

=== ====

Pinoys optimistic too !

40% of Filipinos participating in a poll run by SWS surveys expect their quality of life to improve in the next year.

This is the highest such rating since SWS began conducting the survey in April 1984.

Personal optimism, with the 40% rating, is from a poll of 1,200 individuals, and is done by subtracting pessimists from optimists, to arrive at a net optimism fugure. 45% expected an improvement, and only 5% expected things to get worse

Looking back, 31% said the quality of their lives had improved over the last 12 months, and 27% said that it their lives were worse. The net figure of 5% (4%??)

was statistically the same as the 4% figure in September.

[drbubb]

The attraction of SOHO's in an "Ugly" building

 

Eton Tower has a great location, but does not look like its original render

 

 

On skyscraper city, one of the posters wrote about SOHO (Small Office – Home Office) units:

 

I realized this building is ugly compared to its renderings and glassy neighbour, but since its there anyway, would this be a good investment if given the opportunity?
The location is kinda irresistible and SOHOs are kinda hard to get in good locations. Of course, the unit itself has to be very very good (i.e. high floor, good orientation with views as oppose to ones facing the tall building next door, etc) for me to take a bite on.

 

TURNOVERS may start soon for some of the (lower floor?) flats - but first a Notice must be sent:

 

From Eton:
Please be advised that the first phase in the handover of the unit begins with the letter (NAUT) that will be sent to you informing the date when you may inspect your unit. Should you find your unit satisfactory, you may then accept this on the same date.

Should you find any part of the unit’s quality unacceptable, this may be included in the punch list that our Technical Team will be rectifying. The unit may be accepted once the rectification is completed. Our Turnover Team will be assisting you as you view and inspect your unit.

For now, we have already started sending invites to buyers of the SOHO units at the lower floors for VIEWING purposes only. This is not yet the actual turnover.

 

> SSC: http://www.skyscrapercity.com/showthread.php?t=1028969&page=17

[drbubb]

AFT / ALVEO Financial Tower, etc

 

> slides

 

===
Here are 5 advantages on why you should add commercial office properties to build recurring income:

1. STRONG DEMAND & TIGHT SUPPLY FOR OFFICE UNITS

Inflow of overseas companies for outsourcing as well as the demand from local entrepreneurs has been increasing rapidly. Currently, office occupancy is very high with only 5-6% vacancy rate as compared to a 15% vacancy rate last 2001. In previous years, property developers of office space kept their corporate leasing clients to themselves. Office space is rarely sold to retail clients.

2. LONGER LEASE TERMS & GOOD RENTAL RETURNS
Compared to residential leasing, corporate leasing usually has longer leases. An office investment can actually yield a conservatively low 5% return on its first 3 years and increase to 7-10% return as the building occupancy gets higher. This means that the rental return from a 2-3% bank interest rate will take 30 years as compared to what the office property can give in a short span of 10-12 years.

3. BETTER MAINTENANCE AND LIMITED INVOLVEMENT FOR OWNERS
Because corporate offices are constantly in the public eye, most corporate tenants maintain the unit very well which is very beneficial to the owner. Corporate clients are also easier to deal with as they already have admin staff to fix most of their worries vs. residential clients who will need the landlord’s assistance in most of their concerns. Since you are providing them a shell space only, most of the time, your corporate tenant would just deal with the building admin for their daily concerns and regular maintenance.

4. NOW MORE AFFORDABLE BECAUSE OF LOW LOAN RATES

With low rates offered by banks, buyers are able to get lower cash out and longer no interest charges in house terms of their purchase. What was once an area exclusively for moneyed investors has now become affordable and within reach for first time investors.

=====

 

Supply/Demand

1/

/2

/3

[drbubb]

AFT- 1/

2/

3/

4/

5/

6/

7/

=== ===

Comment on AFT & other ALVEO Office projects

 

a._f.

Price per sqm of AFT is now at 250k per sqm according to Alveo. My client already started to earn on his AFT units, he bought his AFT units at 220k per sqm. Attending the 2nd priority selling of AFT later, there are reopened units and floors.

Oh by the way, Alveo Financial Tower units will be open for leasing before turnover. APMC, us brokers, Jones Lang Lasalle and Colliers will be handling the unit leasing for AFT, same goes to Stiles Enterprise Center, Park Triangle Corporate Plaza North and South Towers and High Street South Corporate Plaza.

2/

Wow! I can't imagine driving up 16 floors up just to get to parking.

You would think with the sheer number of parking floors, which is 24 in total, if one were to visit the building or even just use it to park in the Makati CBD, they will never run out of space, eh? Better yet, anybody who works in the building and nearby building should have a parking space allotted for them if so desired. I wonder how much are they planning to charge.

===

> ssc: http://www.skyscrapercity.com/showthread.php?t=1568161&page=14

I think that comment is just advertising spin, since the client has "earned" nothing yet.

He has a paper profit, that would be severely eroded by costs, if he/she tried to capture it.

Also, AFT will not be complete until 2020, so the "earnings machine" will not be turned on for some time.

Even so, the demand for the project is strong, as we can see in the rising price

=== ===

> See New Makati office space thread: xx

[drbubb]

Research & Forecast Report

PHILIPPINES 4Q 2015

The Philippine economy grew at its fastest rate in 2015 during the fourth quarter, posting a growth of 6.3%. However, this

accelerated growth was not enough to compensate for the slower growth during the rst three quarters, ending up with

an overall rate of 5.8% in 2015, compared to 6.1% in 2014. The services sector continued to propel the economy, growing by an

impressive 7.4%, while the industrial sector grew by 6.8%

. . .

Residential - rental rate appreciation slows in the 4th quarter
Three new condominium buildings with 1,581 new units were completed in the major business districts of Metro Manila. Amid rising inventory levels, vacancy rates for residential condominiums continued to rise in all major districts, with Makati CBD overall vacancies rising to 8.9%. Nevertheless, rental rate growth still increased albeit at a more modest pace of 1.1% during the fourth quarter;

. . .
Rockwell Center condominiums continued to command the highest rates per sq m, averaging at PHP963 per sq m for premium units. Makati CBD unit rents averaged at PHP883 per sqm growing by 0.91%, while Fort Bonifacio premium condos were slightly higher at PHP891 per sq m with a 1.0% growth. Ortigas
Center prime condominiums averaged at PHP506 per sq m, an increase of 1.2% from the previous quarter

 

Prices have stopped rising, and a small dip is now expected by Q4-2016

4Q /2014 : 144,500 : +1.23% : + 7.11% : 100,000- 189,000 : 110,000 - 180,000 : 117,000 - 180,000 :

1Q /2015 : 147,350 : +1.97% : + 7.92% : 102,500- 192,200 : 113,000 - 179,500 : 119,000 - 189,000 :

2Q /2015 : 149,000 : +1.11% : + 7.91% : 104,000- 194,000 : 114,000 - 182,000 : 119,000 - 198,000 :
3Q /2015 : 151,000 : +1.34% : + 5.78% : 106,000- 196,000 : 114,000 - 185,000 : 121,000 - 201,000 :

4Q /2015 : 151,000 : +0.00% : + 4.50 % : 106,000- 196,000 : 115,000 - 185,000 : 122,000 - 202,000 :

Qtr / Yr. : Mak-Mid. QonQtr : Yr.onYr. / Low - Makati - H / Low -Bonfacio- H / Low -Rockwell- H /

Est:
4Q /2016 : 149,000 : -------- : -1.3% Est : 105,000- 193,000 : 112,000 - 181,000 : 120,000 - 200,000 :

 

Some surprising Good News:

 

HOTEL AND LEISURE : Substantial hotel room stock to be added in 2016

Around 1,739 new rooms were introduced in the metropolis during 2015, with two new hotels being delivered during the

second half of the year. The Novotel Manila in Araneta Center, Quezon City, started operations during the fourth quarter of

2015, in time for the arrival of Filipinos based overseas during the Christmas season. The hotel was well received especially

since there is a lack of quality accommodations in the northern part of the metropolis. Jin Jiang Hotels, one of the largest hotel

operators in China, opened its second hotel in the Philippines in Ortigas Center.

Should all projects be completed as planned, Metro Manila will see another 5,300 keys added to its room stock in 2016. This

includes two ve-star hotels in Fort Bonifacio — the Shangri-la at the Fort and the Grand Hyatt Manila.

Metro Manila hotel occupancy surges in the 2H15

Foreign arrivals continued to increase, reaching 4,395,812 visitors as of October 2015 and growing by 11.1% compared to the same

period in 2014. The figures are quite reassuring to the Philippine government, which has not been hitting its ambitious foreign

arrival goals for the past few years despite a well thought out publicity campaign. Arrivals increased despite the “tanim-bala” or

bullet planting extortion schemes allegedly conducted by airport officials on unsuspecting tourists. The arrival figures were given

a boost by the Asia-Pacic Economic Cooperation (APEC) which the Philippines hosted in 2015, with meetings held in various

areas in the country since the start of the year and culminated in November with world leaders attending the APEC Summit in

Manila.

This surge in arrivals led to an increase in average occupancy rates to 70% during the second half of 2015, a welcome development...

==

> http://www.colliers.com/-/media/files/marketing%20reports/phil_knowledge_4q2015.pdf