RESEARCH

METRO MARKET UPDATE Q1 2019

METRO MANILA REAL ESTATE SECTOR REVIEW MANILA REMAINS ONE OF THE HOTTEST CITIES ACCORDING TO THE WEALTH REPORT COVER | Opportunities in the local property market arise from the steadfast growth of the ultra-wealthy

In the latest edition of the Wealth South Korea, and boasted Report - released by global property higher percentages compared to the consultancy firm, Knight Frank, the world average of 22% number of ultra-high net worth individuals (UHNWI) in the The projected growth of millionaires SNAPSHOTS was forecasted to rise by in the Philippines was likewise 38% in the next 5 years. A UHNWI remarkable at 34%, following ’s Economic Indicators was defined as a person with a net 35%. From 24,162 in 2018, the worth of over US$30 million. The number of Filipino millionaires is Philippines has consistently been reported as one of the countries with forecasted to reach more than the fastest UHNWI growth 32,000 in 2023. projections in the past versions of 5.6% the report. Moreover, the Philippines One of the leading factors driving GDP was expected to record 296 UHNWI UHNWI growth is investments in Q1 2019 by 2023. The projected growth of non-financial assets such as real UHNWI in the Philippines was estate. The UHNWI are diversifying second to India’s 39%. asset portfolio and investing in various areas worldwide. Appetite Backed by a strong overall for real estate investments 3.3% economic performance, 8 out of the continues to increase globally due Inflation Rate top 10 countries with the fastest to the relatively higher yield. Thirty- March 2019 projected UHNWI population growth four percent (34%) of the surveyed were from . India, Philippines, private bankers and wealth advisers , , , revealed an increase in client’s Vietnam, allocation to property in 2018. FIGURE 1 3.0% Private Capital Investment In addition, Knight Frank’s Prime OFW Remittances International Residential Index (PIRI February 2019 100) tracks the movement in the price of luxury homes in key cities. 8%2% Manila registered the highest growth in luxury home prices for the year 2018. The 11% rise in prices 11% 35% signified an already robust market. 6.68% Nevertheless, the growing number Avg. Bank Lending of UHNWI presents opportunities for February 2019 15% further growth of the Manila prime residential sector.

The continuously expanding 29% commercial real estate sector is 5.58% another area of interest to the 91-Day T-Bill growing Filipino UHNWI. Local Q1 2019 Apartment Office property developers and large Retail Industrial & Logistics companies are intensifying their business development activities with Hotel Senior Housing & Care the continuous acquisition of land and commercial spaces. Source: Knight Frank The Wealth Report 52.41 Avg. PhP-USD March 2019

2 OFFICE MARKET OUTLOOK REMAINS UPBEAT WITH A FIERY START IN 2019 OFFICE | Rents, occupancy rates and upcoming stock signify a strong office market

MAKATI TABLE 1 Nex Tower Q1 2019 Office Data continued to command the Source: Nova Group highest headline rents in Metro Weighted Avg Vacancy Manila. The Makati Central Area Lease Rates Rate Business (CBD) remained (PhP/sq.m./mo.) the most preferred location for office operations and business Makati 1429.11 3.24% activities. Office rents in Makati’s Fort prime and grade A buildings Bonifacio 1262.23 5.97% averaged PhP 1,429.11 per square meter per month in the first 772.63 3.10% quarter of 2019. Situated along the business City 879.62 9.35% district’s main avenue, Nex Tower, with an office GLA of Ortigas 713.29 5.25% 31,173.00 square meters, was Bay Area 918.92 0.00% unveiled and started operations within the first quarter. In addition, METRO Makati is anticipating another MANILA ₱1,078.81 4.99% 160,065.34 square meters of new office GLA within 2019. recorded the highest quarter-on- Source: Santos Knight Frank Research quarter (q-o-q) rental growth at 9.71% in the first quarter of the The office sector year. Makati’s rents grew less than momentum extended to the first Fort Bonifacio displayed a robust three months of 2019 as 1%. PhP 1,262.23 per square demonstrated by sound office market with a growing meter per month was the weighted performance indicators. A demand. Although second only to average asking rent of office generous supply of leasable area Makati in terms of weighted spaces in Fort Bonifacio for the increased the documented end of average lease rate, Fort Bonifacio period. year office stock. In the first quarter of 2019, more than 200,000 square FIGURE 2 meters of Gross Leasable Area Upcoming Office Space (in sq.m.) (GLA) was added to the 2018 total supply. Nevertheless, the overall occupancy rate remained within healthy levels of above 95%. The first quarter net absorption of 600,000 191,871.02 square meters almost 500,000 equaled the new stock introduced in the quarter. Moreover, the year- 400,000 on-year growth rate of the 300,000 weighted average asking rent was 200,000 noted at a record high of 10.35%. The average asking lease rate was 100,000 pegged at PhP 1,078.81 per - square meter per month. Makati Ortigas Bay Area Alabang Quezon An estimated 1.4 million square City meters of new GLA is forecasted to enter the market in 2019. Majority 2019 2020 2021 or around 74% of the upcoming Source: Santos Knight Frank Research supply will be in Fort Bonifacio, Ortigas, and .

3 Fort Bonifacio’s vacancy rate was Quezon City that boasts several measured at 5.97%. Newly turned- mixed-use developments in over Asian Century Center added various locations within the city. 26,000 square meters of GLA to The Araneta Group is presently revamping the Araneta Center in the business district’s total supply. the well-located Cubao area, ALABANG adding more office buildings to the existing masterplan. Araneta The Alabang business district Cyberpark 2 recently started continued to show signs of high operations, increasing Quezon return potentials. The area is at a City’s total office stock by prime location in the southern 74,849 square meters of GLA. portion of Metro Manila, away from the highly-congested areas of At the end of the first quarter of Makati and Fort Bonifacio. The 2019, Quezon City’s occupancy weighted average rent in Alabang rate remained above 90%. The has been growing at a rate of 5% One Griffinstone Alabang asking rents in the area averaged annually in the past 5 years, Source: Business World PhP 879.62 per square meter per reaching PhP 772.63 per square month. meter per month in the first quarter the fringes of the business district. of 2019. The vacancy rate was at Ortigas Technopoint Two and CBC 3.10%, despite the opening of One (Charles Builders Company) Griffinstone, which added 22,903 Business Hub started operations in square meters of office GLA to the first quarter of 2019, adding Alabang’s total supply. about 25,000 square meters of new office space options. BAY AREA Ortigas vacancy rate was almost The Bay Area existing office supply reduced in half from 11.30% in has been fully absorbed as of the 2018 to 5.25% in 2019. A first quarter of 2019. strengthening demand was Cyberzone A and D added a evidenced by the 2.46% q-o-q combined total of 28,220 square rental growth rate in the area. The meters to the Bay Area GLA. The weighted average office lease rate buildings were immediately taken was PhP 713.29 as of the first up. The dwindling supply and rising quarter of 2018. demand pushed rents up 20% from PhP 767.12 in 2018 to PhP QUEZON CITY 918.92 in 2019. The absence of available office space in Bay Area forced Araneta Cyberpark 2 Several developments are Source: Araneta Group presently in the pipeline to occupiers to consider options in the supply shortage. More than areas such 410,000 square meters of GLA is FIGURE 3 expected within the next 3 years. Weighted Average Lease Rate (in PhP) and Year-on-Year Some of the upcoming office Growth Rate (in %) projects include ’s One Fintech building 2000.00 25.00% in Westside City, which is set to be completed by Q4 2020, and DM 1500.00 20.00% Wenceslao and Associates Inc.’s 15.00% 1000.00 Aseana 4 for turnover in 2021. 10.00% ORTIGAS 500.00 5.00% 0.00 0.00% Numerous construction activities Makati Fort Alabang Quezon Ortigas Bay City were observed in the Ortigas area. Bonifacio City Approximately 375,000 square meters of new office stock are for Lease Rates Y-o-Y Growth turnover in 2019. Office development was likewise noted in Source: Santos Knight Frank Research

4 THE RESIDENTIAL MARKET BOOM EXTENDS TO THE INITIAL QUARTER OF 2019 RESIDENTIAL | End-users and Investors crave for new inventories as supply further dwindles

The Metro Manila residential launch date. The notable new TABLE 2 market continued to exhibit strong project launches included Novo’s Q1 2019 Residential growth in the first quarter of 2019. Citrine Residences in Makati and Condominium Sales Market Selling prices rose, absorption Federal Land’s Mi Casa – Hawaii Statistics rates approached 100 percent and Tower in the Bay Area. Half of the fresh inventories were quickly inventories from these projects Avg. Units taken-up. Given the limited were reportedly sold in less than a Area Monthly Sold (%) residential supply in prime month. The launching of high-end Take-up locations within city centers, and luxury developments such as property buyers rushed to Alveo’s The Ametrine at Portico in Makati 96.14% 23.48 purchase newly launched units in Ortigas and Megaworld Infinite’s these areas. The Albany – Yorkshire in Fort Taguig 97.03% 12.26 Bonifacio were likewise met with Although a number of existing high demand from residential Quezon City 93.44% 14.92 projects remained in the market, investors. A robust residential new projects in Makati, Bay Area, market was evidenced by the Ortigas 95.66% 31.46 Ortigas and Fort Bonifacio already impressive market acceptance of sold most of the tallied floated the new projects, despite the Alabang 97.25% 17.94 inventory within months from higher price premium if compared to projects in the far fringes. Bay Area 97.20% 36.15 Citrine Residences Source: Novo METRO 95.55% 20.87 ABSORPTION AND TAKE-UP MANILA

Metro Manila’s residential market Source: Santos Knight Frank Research absorption rate soared to 95.55% in the first quarter of 2019. Foreign investors are recognizing the Capital appreciation is expected growing real estate investment once lined-up infrastructures, such prospects in the country while the as the Makati , are in- local sector continues to create place. wealth for investment in their The announced price increase of country of residence. Filigree’s residential projects in Backed by further purchases Alabang prompted investors to pouring in from the PAGCOR- purchase residential units. This enabled companies, the Bay Area boosted the area’s monthly take-up led the other business in rate to around 17 units per month, terms of residential take-up. a 70% y-o-y growth. Approximately 36 units per month In addition, monthly take-up of were absorbed during the first Quezon City and Fort Bonifacio three months of the year. projects were estimated at 14 units The base of large local and per month and 12 units per month, multinational companies, Ortigas respectively. and Makati displayed take-up rates Furthermore, the influx of foreign of about 31 units and 23 units, workers and the migration of respectively. Makati registered a people from nearby 48% year-on-year (y-o-y) increase resulted to a in take-up, which is attributed to the rising demand from buyers.

5 faster take-up of affordable projects. The first quarter take-up was noted at 16 units per month, corresponding to a 35% increase in speed of sale.

The Albany - Yorkshire SELLING PRICES Source: Megaworld Infinite Due to the large demand for residential units in the area, Bay Area was the forerunner among all business districts in terms of average residential unit prices across the various price segments. Bay Area posted a 50.4% y-o-y Mi Casa growth in selling prices, reaching The Ametrine at an average price of PhP 286,277 PorticoSource: ProperBee.com Source: Federal Land per square meter in the first quarter of 2019. FIGURE 4 Following Bay Area, Alabang Indicative Average Selling Prices per Area (PhP/sq.m.) exhibited a y-o-y growth of 34.6%, coming from a low base of PhP 119,821 per square meter in the 450,000 400,000 383,885 initial quarter of 2018. Alabang’s 356,077 average price per square meter 350,000 334,821 was PhP 161,310 in the same 300,000 263,512 240,861

period of this year. 250,000 216,341 PhP 200,000 Makati’s average selling prices In 224,071 tailed Alabang in terms of y-o-y 150,000 growth at 27.9%. Makati recorded 100,000 132,909 137,172 130,828 the second highest average price 50,000 84,797 79,879 per square meter across segments 0 at PhP 232,474 per square meter. Makati City Taguig City Quezon City Ortigas Alabang Bay Area

Presently, Makati’s luxury market Source: Santos Knight Frank Research inventory is 100% sold, with a few units available for re-sale. However, the ground breaking of a Bonifacio remained as one of the and mixed-use projects. In the first new luxury project, Estate Makati, priciest areas in Metro Manila quarter of 2019, the residential was held in the late part of January having an average selling price of units in Quezon City were valued 2019. The official start of selling PhP 231,360 per square meter. at PhP 127,514 per square meter has not been announced. Upon at an average. A 13.6% y-o-y launching, the prime residential The average prices in Ortigas rose increase in prices was justified by supply in Makati will increase by 22% y-o-y. Almost at the same the infrastructure projects in the another 180 units. The limited supply level as Alabang, the average price pipeline such as the MRT-7. to be introduced and the large in Ortigas during the first quarter of underserved demand are foreseen to 2019 was pegged at PhP 163,303 At present, all residential projects further escalate selling prices in the per square meter. in ’s are area. completely sold out while Alveo Quezon City offers a variety of plans to launch Orean Place Tower The inventory of Horizon Homes of residential projects, from affordable 2 in the second quarter to address Shang Properties, regarded as the condominiums in Fairview to high- the huge unserved demand. most expensive vertical residential end developments in Vertis North, development of the recent periods, as well as residential components was fully depleted in the first quarter of numerous pocket developments of 2019. Nevertheless, Fort

6 METRO MANILA HOSPITALITY MARKET HEATS UP EARLY IN 2019 HOSPITALITY | Impressive performance of the hospitality sector is evidenced by key indicators

TOURIST INFLUX & SPENDING Furthermore, the Civil Aeronautics Get-togethers and reunions are Board (CAB) forecasted an popular especially after the Nearly 2 million tourists from around the world were reported to increase of 10% in international Christmas season, when have visited the Philippines in the and domestic air-traffic this year. provincial-based or foreign-based first two months of 2019. The Philippine , Pacific relatives and friends extend their Department of Tourism (DoT) and other local companies stays to fully maximize the visit to reported a y-o-y increase of 6% in have been increasing and Manila. Business travels are the country’s foreign tourist expanding operations to secondary likewise very common in the first arrivals, creating optimism in the airports outside Metro Manila to quarter of the year, when country’s tourism market this year. decongest the Ninoy Aquino refreshers, sales rallies and year- As of February 2019, South Korea International Airport (NAIA), as well starter events are held. remained the top source of foreign as offering direct flight routes to visitor arrivals and tourist spending various tourist destinations in the Moreover, Manila remained to be in the Philippines. An estimate of country. the primary MICE destination in the 360,800 arrivals and PhP 26.4 country due to its proximity to the billion were generated from South international airport, the availability FIGURE 5 Korea in the first two months of the of MICE-capable facilities and year. China continued to occupy Top 5 Tourist Spenders in the presence of integrated resorts and the second spot with a y-o-y Philippines (Jan & Feb 2019) casinos for more activities. The growth in visitor arrivals of 20%. DoT and the Tourism Promotions Chinese visitor arrivals during the Board (TPB) urged Local period was recorded at 305,300 arrivals while tourists spending Government Units (LGUs) to coin from China was documented at initiatives that will strengthen the PhP 16.67 billion. The third place local MICE industry in the was taken by USA after recording Philippines and advance the 203,800 visitor arrivals and recognition of the country as a spending PhP 13.68 billion in the preferred MICE destination in the country. world.

In addition, the DoT pointed out

₱5,060,000,000.00 ₱5,060,000,000.00

, ,

₱3,290,000,000.00 ₱3,290,000,000.00 ₱26,410,000,000.00 ₱26,410,000,000.00 that tourist spending from Europe ,

substantially increased over the ,

JAPAN ₱16,670,000,000.00 ₱16,670,000,000.00

periods of January to February. , ,

European tourist spending in the ₱13,680,000,000.00

SOUTHKOREA CHINA Philippines have surged by at least US, 60% during the said period. Source: Department of Tourism (DoT) Tourists from reportedly spent PhP 1.45 billion, while MM HOSPITALITY DEMAND tourists from consumed PhP 1.47 billion. The Metro Manila hospitality Q1 2019 demand mainly originated The latest Inbound Tourism from staycations, get-togethers, Expenditure report of the Philippine Statistics Authority revealed that business travels and Meetings, foreign tourists mostly spent on Incentives, Conventions, and food and beverage, which Exhibitions (MICE). Staycations is accounted for 26% of the overall a notable growing trend in the foreign tourist spending in the country. It enables spending quality Philippines. Moreover, the time with family and friends. accommodation services likewise Various packages and discount MICE-Capable Facilities: World Trade covered a large portion of the total promos are offered to encourage Center Manila & SMX Convention tourist spending at 23%, booking hotel stays even without a Center contributing to the solid growth of Sources: World Trade Center the hospitality sector. particular occasion to celebrate. SMX Convention Center

7 HOTEL SUPPLY FIGURE 6 NEW & UPCOMING HOTELS Metro Room Bay Area, accounted for the A number of hotels commenced largest supply of hotel rooms in Supply Distribution Metro Manila, offering operations in Metro Manila during approximately 9,300 hotel rooms the first quarter of 2019. Around across 23 hotels. Most of the ALABANG 900 hotel rooms were added to the 6% integrated resorts and casinos are QC Metro Manila hotel supply, bringing BGC 10% located in the Bay Area. Majority of 6% the total supply to approximately the hotels in the area feature 4-star 30,000 hotel rooms. and 5-star accommodations that cater to the exceptional taste and BAY AREA & Close to 740 hotel rooms were MAKATI PASAY preference of international guests 31% launched in Newport City in Pasay. (OTHERS) 32% Mariott International’s Sheraton The existing hotel supply in Makati is comprised of 9,000 rooms, Manila Hotel introduced 390 guest ORTIGAS rooms while Hilton Manila Hotel second largest in Metro Manila, 15% coming from 55 hotels. The hotels added 350 hotel rooms to the in Makati are mostly situated within growing Newport City hospitality the central business district and sector. the area. 5-star hotel Source: Santos Knight Frank Research accommodations are located in the Metro Manila is set to witness city center, within walking distance 7,000 additional hotel rooms in the from the regional offices of FIGURE 7 next 5 years. Developers such as multinational firms. Inns and 3 to 4- Metro Manila Average Daily Megaworld Corporation, Ayala star hotel accommodations are Rate (ADR) Land Inc. (ALI), Filinvest Land Inc. typical in the Poblacion area and (FLI), and Double Dragon target backpackers and travelers Properties are looking to increase on a budget. their hospitality footprint by setting Fort Bonifacio, Ortigas, Alabang up strategic developments all over and Quezon City have a combined Metro Manila. total of 10,800 rooms under different star-ratings. Managed by Prestige Hotels and Resorts, Megaworld Corporation’s AVERAGE DAILY RATE Grand Westside Hotel and Hotels in the Bay Area Kingsford Hotel located in

commanded the highest Average Bayshore City will add 1,200 hotel

₱12,342.13 ₱12,342.13

₱8,674.05 ₱8,674.05 ₱5,366.23 ₱4,659.16 ₱4,107.23 Daily Rate (ADR) rates among the ₱4,287.86 rooms to the busting Bay Area in Metro Manila business districts. Pasay. Moreover, ALI announced ADR in the area ranged from PhP Alabang BGC Makati Ortigas Bay Area QC future expansions of the Seda & Pasay 1,915 per night to PhP 47,203 per Hotel brand within the developer’s night. The high demand for (others) and Bay Area accommodations in integrated Source: Santos Knight Frank Research hotels, resorts, and casinos was projects. Furthermore, FLI’s 220- the main driver in the continuous FIGURE 8 room Canvas Hotel that will rise escalation of ADR in the Bay Area. Metro Manila 5-Star Average within the Activa Flex development Daily Rate (ADR) and targets the millennial market, Makati offers a wide selection of is expected to light-up the Quezon hotel accommodation that matches City skyline in 2022. the budget and desires of the market. 20 budget hotels were Araneta Group’s Ibis Styles Hotel noted in the fringes of Makati with is a 300-room lifestyle and ADR of PhP 1,406 to PhP 4,380. hospitality complex that will rise in On the other end, the ADR of 5- star hotels start from a low of PhP Araneta Center. Ibis Styles Hotel is 5,080 to a high of PhP 17,030. part of the Araneta Group’s facelift masterplan of the Araneta Center, Still within the peak season which seeking to reinvent the business normally starts during the pre- district. The hotel will be situated holiday season in November and alongside the upcoming Gateway ends during the late summer Mall 2 and will have seamless season in May. ADR in Fort

access to other Araneta Group

₱16,611.73 ₱16,611.73

₱8,637.39 ₱8,637.39 ₱7,232.92 ₱5,688.17 Bonifacio, Ortigas, Alabang and ₱4,274.39 Quezon City averaged PhP 8,670, developments in the area. PhP 4,660, PhP 4,300, and PhP Alabang BGC Makati Ortigas Bay Area Source: Santos Knight Frank Research & Pasay 4,100, respectively. (others)

8 In addition, budget-friendly hotels, International brands and major such as and hotel players likewise continue to Hotel 101, already penetrated the bolster their hospitality portfolio in hotel market of Fort Bonifacio. The Metro Manila with the planned entry of Red Planet and Hotel 101 addition of Ascott Meridian Park in in the growing Fort Bonifacio the Double Dragon complex in Bay increases the number of available Area, and Hotel Okura in accommodation options within the Megaworld Corporation’s Westside business district. City and Newport City developments in Pasay.

FIGURE 9 Upcoming Hotel Rooms in Metro Manila

2019 2020 2021-2023

Source: Santos Knight Frank Research 1214

1010 854 713 720 613 567 591 433 275 280

Upcoming Hotel 101: The Fort 0 0 0 0 Source: Double Dragon Properties

Makati Ortigas Bay Area & Pasay QC Taguig (others)

Upcoming Ibis Styles Hotel QC Source: Araneta Group

Newly opened Sheraton Manila Hotel located in Newport City Source: Marriott Hotels

9 A BUSTLING RETAIL SECTOR RESULTED FROM IMPROVED CONSUMER CONFIDENCE RETAIL | Mall expansions, international brands, and digital payments advanced the retail scene

Coming off the holiday season, the newest mixed-use development in retail industry welcomed 2019 with . Parqal, derived from strong market demand, further the combination of the words evidenced by the continuous “park” and “kalye” (street), will add around 68,000 square meters of development and opening of new leasable office and retail area. The malls together with the expansion development boasts of nature-like and renovation of existing retail landscapes and leisure attractions establishments across Metro for a unique retail experience and Manila. The demand was mainly is scheduled to be completed by driven by favorable market the end of 2021. Newly-opened Parkway in SM City Fairview Source: Santos Knight Frank conditions, such as increased In addition to the new and disposable income and the easing upcoming shopping malls that of inflation in the first quarter of the Gateway Mall 2 were conceptualized taking into Source: Araneta Group year. account consumer lifestyles and changing preferences, mall NEW AND UPCOMING MALLS renovations are continuously being AND EXPANSIONS performed to further promote retail as an experience. SM City Fairview recently in Makati is currently completed and soft-opened undergoing renovation in order to Parkway, the ’s provide a better dining and 32,000-square meter expansion. shopping experience to its Despite the noticeable vacant numerous mall-goers. Renovations spaces in this particular wing, a of the Food Choices and Activity commenced stall operations in number of shops were already Center started in the first quarter of Eastwood Mall and TriNoma. open and selling. Majority of the 2019 and are for completion within Another store is set to open in SM the year. locators were Food & Beverages City North EDSA by April 2019. (F&B) brands and services such as NEW STORES AND BRANDS In addition, Xing Fu Tang, another salon and spa. Several brands have set up shops Taiwanese milk tea brand opened The Araneta Group is expanding in various shopping malls and retail its first branch in the country at The its retail portfolio through the establishments in order to cater to Podium Mall. Two additional stores construction of Gateway Mall 2 in the various demands of foodies are much awaited in Promenade Araneta Center. The new phase is and mall-goers. Mall in Greenhills and Venice Grand Canal Mall in Taguig. The slated to be completed by the Botejyu, best known for its milk tea chain is famous for its second half of 2020. It will feature okonomiyaki and okosoba, recently a 700-square meter activity area, unveiled its restaurant in brown sugar bubble milk tea. upscale interiors, organic One . In Dessert shops have also been addition to existing branches in vegetable garden, European consistently present in the retail marketplace-inspired gourmet food , the Japanese restaurant is set to open branches in other scene. Hongkong-based dessert hall, and a 500-seater chapel on areas within Metro Manila, such as brand Hui Lau Shan entered the the top floor. There will be more , Ayala North Exchange, Philippine market with the launch food options that will cater to the Greenhills, and SM City Fairview. of its first branch in SM Megamall growing demand for F&B brands. A on March 2019. It has upcoming An increasing presence of milk tea total of 126,000 square meters of branches in Eastwood Mall, UP brands was noted as more and floor area will be available upon Town Center, SM City Fairview, completion. more foreign names are introduced to the market. After opening its first SM City North EDSA, SM Mall of Asia, and Promenade Mall. Hui D.M. Wenceslao & Associates is branch in One Bonifacio High Lau Shan uses Philippine carabao set to break ground next quarter its Street last year, -based milk tea brand Tiger Sugar recently mangoes

10 along with other ingredients to create unique desserts. FIGURE 10 Upcoming Retail Supply Per UPCOMING STORE AND Retail Category BRANDS In the first quarter of the year, 299 upcoming brands were noted across Metro Manila. Food & F&B continued to account for the Others Beverages largest share in the pie of 36.45% upcoming brands in Metro Manila 42.14% with a 42% share. Of the 129 F&B brands, 74 or 59% were Clothing & restaurants. Other notable Apparel categories were Milk Tea and 21.40% Desserts with shares of 10% each. AI Robot “SAM” introduced in SM Megamall Clothing and Apparel represented Source: Philippine Star Source: Santos Knight Frank Research 21% of the upcoming stores. The category was distributed as follows: apparel (41%), accessories (28%), footwear (23%) and eyewear (8%). Cashless transactions through digital payments are expected to The remaining 36% of the further pick up in 2019. Quick upcoming brands were under Response (QR) codes are being health & wellness, technology, used by brick and mortar stores as cosmetics, services, and others. a form of offline e-payment. The Merchant accepting payment via GCash QR Popeyes Louisiana Kitchen, under majority of mobile payment Source: Inquirer the Kuya J Group, is a well- applications (GCash, PayMaya, anticipated fast food restaurant. Coins.ph, AliPay, WeChat Pay) are The brand was founded in New QR code-capable. Over 50,000 Orleans in the 1970s and is now merchants accept payments via LEASE RATES AND considered as one of the most QR codes from GCash, while VACANCIES popular fried chicken restaurants in 7,300 merchants allow transactions through PayMaya. In the first quarter of 2019, lease North America. Its menu features rates of Metro Manila malls biscuits with honey, fried shrimp, Moreover, Coins.ph is accepted in select restaurants and cafés. averaged PhP 1,417 per square and spicy chicken. Popeyes is set meter per month. Of all the various to open in 9 locations within Metro Furthermore, GrabPay could soon be used in retail establishments business districts in Metro Manila, Manila (, Bay Area recorded the highest Vertis North, Festival Mall, , under a partnership with SM Investments Corporation. lease rate at PhP 1,750 per square SM City San Lazaro, SM City meter per month. Manila, , Eastwood SM Supermalls recently launched City, and Kroma Tower in Makati). its newest artificial intelligent (AI) With the opening of Parkway in SM City Fairview, Quezon City’s NOTABLE TRENDS humanoid robot, SAM, in SM Megamall. The technology can vacancy rate rose to 2.21%, Despite the evolution of e- provide mall goers with directions, coming from 1.07% in the previous commerce and online shopping, mall schedules, and tips on sales, quarter. Fort Bonifacio vacancy the sensory experience that promos and events. More SAM was lowest of Metro Manila’s physical stores offer to consumers robots will be stationed in other SM business districts at 1.02%, or remains an advantage. To keep up Supermalls nationwide (SM Aura around 3,000 square meters of with the changing preferences of Premier, SM City North EDSA, SM leasable space. Mall rents in the mall-goers and to provide Mall of Asia, and SM Seaside City area averaged PhP 1,542 per convenience and better customer Cebu). square meter per month, which is service, retailers are now the second highest in Metro incorporating digital innovation into Manila. the physical stores.

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