NEDA sa Property Redevelopment Project

12 July 2021

The SGV Purpose Nurture leaders and enable businesses for a better Philippines. #SGVforABetterPhilippines Market sounding webinar program

1. Opening ceremonies 2. Opening remarks from NEDA 3. Opening message from PPP Center 4. Overview of PPP 5. Development concept 6. Market profile 7. Project structure 8. Financial highlights 9. Recap of key investment highlights of the NsM Property Redevelopment Project 10. Q&A 11. Closing remarks from NEDA

Page 2 14 July 2021 NEDA sa Makati Property Redevelopment Project #SGVforABetterPhilippines Opening ceremonies

The SGV Purpose Nurture leaders and enable businesses for a better Philippines. #SGVforABetterPhilippines National Anthem

#SGVforABetterPhilippines Key reminders

Participants are enjoined to speak out their thoughts and opinions at the designated Question and Answer (Q&A) segment of the program.

There will be video recording of the whole session. The recording will be solely used for documentation purposes.

This is an information/feedback-gathering activity only. Participation in this activity does not translate to a company’s formal expression of interest to participate in the project. Attendees of this activity are not given due advantage on the projects. Information disclosed are also open to all interested parties to ensure a level playing field come the bidding process.

Insights gathered will be solely used for the development of the studies for the NEDA sa Makati Property Redevelopment Project.

Page 5 #SGVforABetterPhilippines Speakers for today’s session

Mr. Jose Miguel R. De La Rosa Ms. Ma. Monica P. Pagunsan Undersecretary, Corporate Affairs Group OIC, Asst. Secretary, Corporate Affairs Group National Economic and Development Authority National Economic and Development Authority

Mr. Ferdinand A. Pecson Atty. Mia Mary G. Sebastian Undersecretary and Executive Director Deputy Executive Director Public-Private Partnership Center Public-Private Partnership Center

Page 6 14 July 2021 NEDA sa Makati Property Redevelopment Project #SGVforABetterPhilippines Speakers for today’s session

Ms. Veronica A. Santos Atty. Jaime Renato B. Gatmaytan Project Finance Specialist / Team Leader Legal Specialist Partner, SGV & Co. Partner, C&G Law

Ms. Marie Stephanie C. Tan-Hamed Mr. Danilo A. Silvestre Ms. Theresa Ianna Teodoro Business Development Team Architect Property Development Specialist Partner, SGV & Co. Consultant, PRIMEX Director, Colliers International Philippines

Page 7 14 July 2021 NEDA sa Makati Property Redevelopment Project #SGVforABetterPhilippines Opening remarks from NEDA

The SGV Purpose Nurture leaders and enable businesses for a better Philippines. #SGVforABetterPhilippines Opening message from PPP Center

The SGV Purpose Nurture leaders and enable businesses for a better Philippines. #SGVforABetterPhilippines Overview of PPP

The SGV Purpose Nurture leaders and enable businesses for a better Philippines. #SGVforABetterPhilippines Overview of Public-Private Partnerships NEDA sa Makati Property Redevelopment Project Market Sounding Webinar 12 July 2021

Mia Mary Sebastian Deputy Executive Director PPP Center of the Philippines Infrastructure development for economic recovery and resiliency

Infrastructure development, implemented via sound fiscal policies and governance frameworks, shall propel economic recovery and resiliency Government financing General appropriations, corporate funds

Financing and implementation Government borrowings Domestic & foreign debt, Investments in Stimulus to investment, official development Incorporation of transportation, food job creation, resiliency measures assistance (ODA) security, and social technological (climate change, disaster infrastructure (e.g. innovations, and delivery risk and reduction, and health, water and economic development emergency situations) in mechanisms sanitation, digital (particularly in the infrastructure projects connectivity, etc.) regions) Private sector financing Public-private Resilient and sustainable infrastructure partnership (PPP) PPP Center of the Philippines

The PPP Center facilitates the implementation of the country’s PPP Program. It serves as a central coordinating and monitoring agency for all PPP projects.

Advocate for POLICY reforms to enhance Provide technical enabling environment assistance in PROJECTS (development to implementation) Conduct CAPACITY BUILDING activities to improve skills of agencies PPP projects

as of 31 May 2021 184 64 AWARDED PROJECTS PROJECTS IN THE PIPELINE PHP 1,315 Billion PHP 7,255 Billion (USD 27.2 Billion) (USD 149.3 Billion)*

No. PhP (bn) No. PhP (bn) National 89 1,195 National 44 7,203 Local 95 120 Local 20 52

*Total cost does not include projects undergoing studies and with costs that are yet to be finalized Pipeline of PPP projects

National PPPs (44) Local PPPs (20)

5 Water supply and 3 Solid waste Transportation sanitation management 31 (airport, road, rail, port, and terminal) Vertical infrastructure / 5 government property development Health (e.g. university properties, public 6 (hospital facilities market, and slaughterhouse) and services) Emerging sectors in local PPPs Vertical infrastructure / Transportation 5 government property 2 (e.g. port, road, bus rapid 3 Tourism development transport [BRT], and terminal)

IT system Health 2 IT system 2 (hospital facilities and services)

Renewable energy PPP options for vertical infrastructure projects

A. Integrated approach B. Unbundled approach Integrated Private sector partner (PSP) to develop and Specific stand- PSP to develop selected project component or approach maintain the project alone projects deliver specific service of a project

Design, build, operate & maintain (DBOM) Design & build (DB) Operate & Design, build & Engineering, maintain (O&M) maintain (DBM) procurement and construction (EPC)

Source: San Miguel Corporation Source: PPP Center website Source: Integrated Design Source: Ramiltibayan Associates Ltd (Wikimedia Commons) PPP concept

Integrated approach (design + build + operate +

GOVERNMENT PRIVATE SECTOR maintain) can reduce whole-of-life project cost

More efficient delivery of public services by tapping private sector’s capacity • A long-term contractual agreement and technology between government and a private firm • Targeted towards financing, designing, implementing and operating Optimal risk allocation (where risk is allocated infrastructure facilities and services that to party who can best manage it) can also were traditionally provided by the public reduce project cost sector PPP legal framework

Modes of RA 7718 NEDA Joint Implementing Local PPP Code or (Amended BOT Venture (JV) procurement: agency JV Ordinances Law) Guidelines ▪ Solicited ▪ Unsolicited National government agencies ✓   Further reference GOCC, GCE, GICP, GFI, Visit the PPP Center website SUC (including WDs) ✓ ✓  for other pertinent laws and issuances.

Access link: Local government https://ppp.gov.ph/other- units ✓  ✓ pertinent-laws/ Mactan-Cebu International Airport (operational)

PARTNERSHIPS

Bislig Bulk Water Supply and Septage UP Philippine General Hospital (PGH): (under development) PGH Cancer Care in Manila PGH Diliman (under evaluation and approval) For further information, please visit: www.ppp.gov.ph For inquiries, kindly e-mail: Ruby Jean S. Niduaza Office of Deputy Executive Director [email protected]

PPPCenter.Philippines

@PPP_Ph

Public-private-partnership- Center-of-the-Philippines

PPPPinas Public sector parties involved

National Economic Development Authority (“NEDA”) and Public-Private Partnership Center (PPPC), with the technical assistance of SyCip Gorres Velayo & Co. (SGV) through the Project Development and Monitoring Facility, is redeveloping the NEDA sa Makati Property.

Page 21 #SGVforABetterPhilippines Market sounding activity objectives

What would we like to know? The government intends to sound off the initial project scope and potential private sector role for the proposed NEDA sa Makati Property Redevelopment Project. Project viability The government intends to foster a broadly competitive procurement. The activity may reduce time spent for securing partnerships by engaging with the private sector at an early stage. Capacity Gather private sector insights on the proposed scope and potential participation/role in the project such as: • Interest as a developer/contractor, supplier, operator, tenant, financing Private sector institution, capability • Experience on similar projects • Possible points for improvement in the structuring of these projects (i.e., technical and financial aspects) Maturity of the • Other points/components that should be considered in the study concept • Identify potential challenges and risks

Page 22 14 July 2021 NEDA sa Makati Property Redevelopment Project #SGVforABetterPhilippines Project Overview

The SGV Purpose Nurture leaders and enable businesses for a better Philippines. #SGVforABetterPhilippines Development concept

#SGVforABetterPhilippines Existing situation Building background Current status

• The existing building is located in the Makati Central Business District, fronting and its rear accessible on Adelantado Street

• 7-storey building with basement parking, roof deck and gross floor area (“GFA”) of 7,220 sq.m. with an approximate footprint of 1,000+ sq.m. or over 50% of the 1,800 sq.m. site.

• Previously used as storage areas of NEDA and PIDS

Source: Google images

NEDA sa Makati Building, Amorsolo Street

Page 25 14 July 2021 NEDA sa Makati Property Redevelopment Project #SGVforABetterPhilippines Existing situation Building location (within central business district)

Buendia Ave. Ayala Triangle

Project Site

Greenbelt

Taken from google maps

Page 26 14 July 2021 NEDA sa Makati Property Redevelopment Project #SGVforABetterPhilippines Existing situation Building location (within central business district)

Buendia Ave.

Salcedo Village Ayala Triangle Project Site

Ayala Project Site Triangle Urdaneta Village

Greenbelt

Greenbelt

Taken from google maps

Page 27 14 July 2021 NEDA sa Makati Property Redevelopment Project #SGVforABetterPhilippines Development concept Redevelopment plans Redevelopment plans

• Envisioned to be a mixed commercial- and office-use building

• Incorporation of green design in the redevelopment and compliance with green building protocols and standards

• Potential maximum FAR stipulated for the Makati CBD is 8.0 for commercial land use which yields to allowable GFA of 14,400 sq.m.

• NEDA and Philippine Institute of Development Studies (PIDS) are to be the main tenants

Source: Google images

Conceptual rendered Perspective/Massing Study*

The conceptual design is not intended to be prescriptive or definitive. The potential private sector partners are encouraged to review the project requirements, improve on the design and submit a more marketable scheme for the property.

Page 28 14 July 2021 NEDA sa Makati Property Redevelopment Project #SGVforABetterPhilippines Development concept Current base scheme

Seven (7) floors of office space and one (1) floor of function rooms/auditorium 8-15 1,704.5 sq.m./floor, approximately 13,636 sq.m.

Parking floors with 31 parking slots also approximately 1,800 sq.m./floor 2-7 (For a total parking capacity of 186, approximately 10,800 sq.m.)

1 Commercial GFA of approximately 1,205 sq.m.

Office GFA and parking Commercial GFA and parking Total GFA and parking requirement requirement requirement

Floor Floor Floor GFA combined 14,841 sq.m. GFA 13,636 sq.m GFA 1,205 sq.m. FAR 8.25 Parking slots (1/100 Parking slots GFA parking 10,800 sq.m. 137 slots 15 slots sq.m. GFA) (1.25/100 sq.m. GFA) Excluded from computation of FAR per Makati Zoning Ordinance 186 slots Parking slots (surplus of 34) Preliminary concept only. Subject to change. Page 29 14 July 2021 NEDA sa Makati Property Redevelopment Project #SGVforABetterPhilippines Preliminary schematic plans Ground floor

Preliminary concept only. Subject to change. Page 30 14 July 2021 NEDA sa Makati Property Redevelopment Project #SGVforABetterPhilippines Preliminary schematic plans Parking floors

Preliminary concept only. Subject to change. Page 31 14 July 2021 NEDA sa Makati Property Redevelopment Project #SGVforABetterPhilippines Preliminary schematic plans Office floors

Preliminary concept only. Subject to change. Page 32 14 July 2021 NEDA sa Makati Property Redevelopment Project #SGVforABetterPhilippines Green concept board Parking floors

Naturally ventilated parking floors with combination green walls and plant boxes as screen

Source: PRIMEX

Page 33 14 July 2021 NEDA sa Makati Property Redevelopment Project #SGVforABetterPhilippines Green concept board Office floors

Extensive glass facades on office floors with vertical louver systems (operable and automated)

Source: PRIMEX Page 34 14 July 2021 NEDA sa Makati Property Redevelopment Project #SGVforABetterPhilippines Green concept board Open areas

Pocket breeze ways, landscaped open areas

Source: PRIMEX

Page 35 14 July 2021 NEDA sa Makati Property Redevelopment Project #SGVforABetterPhilippines Green concept board Roof area

Tree boxes on green roof with PV/solar panels

Source: PRIMEX

Page 36 14 July 2021 NEDA sa Makati Property Redevelopment Project #SGVforABetterPhilippines Market profile

#SGVforABetterPhilippines Market situation – supply and demand

Overall MM Supply and Demand for Office

1,400,000 14.0% 13.213.2% 12.512.5% 1,200,000 12.312.3% 12.0%

1,000,000 10.0% 9.1% 8.6% 800,000 8.0%

600,000 6.0% 5.6% 5.3% 4.7% 4.4% 4.3% Squaremetres 400,000 4.1% 4.0% 3.5% 3.4% 3.1% 2.9% 2.4% 200,000 2.0%

- 0.0%

-200,000 -2.0% 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021F 2022F 2023F

Supply Net Take Up Vacancy Rate (RHS)

Source: Colliers Philippines Data as of Mar 2021 Vacancy Forecast for 2021 Q2 2021 Vacancy Net Take-up as of Q1 2021 (from 9.1% in 2020) Rate 12.5% 11.0% -53K sq.m.

Page 38 14 July 2021 NEDA sa Makati Property Redevelopment Project #SGVforABetterPhilippines Metro Manila supply situation Office stock as of end-Q1 2021

Quezon City (12%) 1.52Mn

Ortigas Center (16%) 2.0Mn

Ortigas Fringe (5%) 0.57Mn

Total Office Stock in Metro Manila Makati CBD (27%) 3.44Mn

12.5 million sq.m. Makati Fringe (4%) 0.48Mn

Fort Bonifacio (19%) 2.32M

Bay Area (8%) 1.04Mn

Alabang (6%) 0.75Mn

Source: Colliers Philippines Data as of Mar 2021 Others (3%) 0.43Mn

Location, % share to total stock End Q1 2021 stock

Page 39 14 July 2021 NEDA sa Makati Property Redevelopment Project #SGVforABetterPhilippines Metro Manila supply situation Supply forecast, 2021-2025

Metro Manila supply forecast

% Change Location End-2020 2021F 2022F 2023F 2024F 2025F End-2025 (2025 vs. end- 2020)

Makati CBD 3,355,400 127,700 74,400 - 25,000 - 3,852,500 7%

Makati Fringe 439,200 42,700 97,600 64,100 58,300 - 694,400 60%

Fort Bonifacio 2,307,100 117,500 133,000 123,900 53,700 17,300 2,752,400 19%

Ortigas Center 1,995,600 165,900 130,000 113,600 - 42,000 2,447,100 23%

Ortigas Fringe 565,300 61,600 - - 94,700 - 721,600 28%

Bay Area 975,900 302,400 35,000 - 137,100 26,200 1,476,500 51%

Alabang 746,300 47,200 38,900 38,900 - 55,600 926,900 24%

Quezon City 1,520,000 13,200 115,800 165,100 108,000 165,800 2,087,900 37%

Others 395,400 - 59,000 143,300 42,500 176,700 817,000 107%

Total 12,300,200 878,200 683,700 648,800 519,300 483,600 15,506,200 26%

Source: Colliers Philippines Data as of Mar 2021

Page 40 14 July 2021 NEDA sa Makati Property Redevelopment Project #SGVforABetterPhilippines Metro Manila demand situation Net take-up down 142% YoY

-182K sq.m. Net Take-up for 2020

250,000 15.0%

200,000 11.0% Net Take-up for Q1 2021 10.0% 9.1% 150,000 126K 7.1% 4.9% 5.0% 100,000 4.1% -53K sq.m.

50,000 0.0% Net Take-up for Q1 2020

- -5.0% Square metres Square -50,000 126K sq.m. -46K -53K -10.0% -71K -100,000 % decline in Net Take-up YoY -15.0% -150,000

-200,000 -191K -20.0% -142% Q1 Q2 Q3 Q4 Q1 2020 2021 Supply Net Take Up Vacancy Rate (RHS) Source: Colliers Philippines Data as of Mar 2021

Page 41 14 July 2021 NEDA sa Makati Property Redevelopment Project #SGVforABetterPhilippines Metro Manila demand situation Transactions vs. vacated spaces

300,000

241K 250,000 224K 202K 200,000 173K 157K

150,000

Square meters Square 96K 100,000 53K 62K 50,000 33K

- Q1 Q2 Q3 Q4 Q1 2020 2021 Transactions Vacated Spaces

Source: Colliers Philippines Data as of Mar 2021

Page 42 14 July 2021 NEDA sa Makati Property Redevelopment Project #SGVforABetterPhilippines Metro Manila demand situation Transactions breakdown

2020 QoQ Transactions 180,000

160,000

140,000

120,000

100,000

80,000 Square meters Square 60,000

40,000

20,000

- Q1 Q2 Q3 Q4 Q1 2020 2021

POGO KPO Voice Traditional Data Center

Source: Colliers Philippines Data as of Mar 2021

Page 43 14 July 2021 NEDA sa Makati Property Redevelopment Project #SGVforABetterPhilippines Metro Manila demand situation Notable transactions in Q1 2021

Ortigas Fringe Quezon City

18,600 sq.m. 4,700 sq.m.

2,600 sq.m. Makati CBD

900 sq.m. Ortigas CBD

16,400 sq.m. Bay Area 4,200 sq.m. 24,800 sq.m.

1,500 sq.m. 15,000 sq.m.

3,700 sq.m. Fort Bonifacio

Alabang 1,600 sq.m.

300 sq.m. 800 sq.m.

Source: Colliers Philippines Data as of Mar 2021

Page 44 14 July 2021 NEDA sa Makati Property Redevelopment Project #SGVforABetterPhilippines Metro Manila demand situation Overall average rental rates

Q1 2020 Q1 2021 Q1 2020 Q1 2021

650 – 1,100 600 - 900 1,400 – 1,950 1,400 – 1,950 Quezon City Makati CBD (P) 600 – 1,000 410 - 800 1,300 – 1,850 1,300 – 1,600

1,000 – 1,500 1,000 – 1,300 Makati CBD (A) 950 – 1,200 700 – 1,100 800 – 1,100 800 – 1,100 Ortigas Center 750 – 950 650 - 750

BGC/ 1,000 – 1,800 1,000 – 1,600 700 – 1,000 700 - 1000 North Bonifacio 900 – 1,500 850 - 1,300 Mandaluyong 660 – 950 550 - 800

1,000 – 1,300 850 – 1,200 McKinley 950 – 1,200 775 – 900

800 – 1,600 800 - 1500 Makati Fringe 600 – 1,400 600 – 1,300

600 - 975 600 - 900 Alabang 550 – 950 550 - 720

1,000 – 1,500 1000 - 1500 Bay Area 950 – 1,400 800 - 900

Headline Source: Colliers Philippines Transacted Data as of Mar 2021

Page 45 14 July 2021 NEDA sa Makati Property Redevelopment Project #SGVforABetterPhilippines Market situation – supply and demand Office leasing opportunities amid COVID-19 surge

E-commerce, outsourcing and data centers drove demand in Q1 2021. Net absorption remained negative because of lease Demand cancellations and/or non-renewals. We see net take-up recovering by the end of 2021, especially with the successful roll out of COVID-19 vaccination program.

From 2021 to 2025, we project the annual completion of about 641,200 sq metres (6.9 million sq feet) of new office Supply space. Fort Bonifacio, Quezon City and the Bay Area are projected to account for about 47% of the new supply during the period.

Existing tenants continue to rationalize office space by not renewing unused spaces and exercising pre-termination option. Rents Rents continued to decline in line with the Colliers projection of 15% reduction in 2021. We expect rents to recover starting 2022.

Vacancy to reach 12.5% due to lease non-renewals, cancellations, pre-terminations and substantial new supply coming Vacancy online. We see demand coming from e-commerce, outsourcing, data centers and even POGOs moving forward which should temper vacancy rise in 2022.

Source: Colliers Philippines Data as of Mar 2021

Page 46 14 July 2021 NEDA sa Makati Property Redevelopment Project #SGVforABetterPhilippines Market situation – supply and demand Makati CBD supply and demand

► With the increased vacancy rates by end- 150,000 2014 2015 2016 2017 2018 2019 2020 2021F 2022F 2023F 2024F 2025F 9.0% 2020, and upcoming supply in Makati CBD for 2021, Colliers project vacancies to further 8.0% increase to around 7.1% by year-end. 100,000 7.0% ► While we expect transactions to be in the positive for this year, the amount of space 50,000 6.0% coming online plus the overhang from the

5.0% previous year to be the driver for increased - vacancy rates 4.0% ► After the influx of supply in 2021-2022, we

(50,000) 3.0% expect vacancies to decrease as activity begin to re-stabilize and take-up the overhang from 2.0% previous years. (100,000) 1.0%

(150,000) 0.0% 2014 2015 2016 2017 2018 2019 2020 2021F 2022F 2023F 2024F 2025F

NewNew supplySupply Take-upNet-take up VacancyVacancy atat year-end during the year end Source: Colliers Philippines Data as of Mar 2021

Page 47 14 July 2021 NEDA sa Makati Property Redevelopment Project #SGVforABetterPhilippines Makati City office supply situation Recently completed buildings

Alphaland Corp. T3 ► Because of limited available space in Makati M1 Tower CBD and its immediate vicinity, total Ayala North Exchange Frabelle Corp. Center completions in the area amounted to only 315,471 sq.m. worth of office space Liberty Bldg 100 West ► Of which, 172,749 sq.m. were completed in NEX Tower 2019, the most in the past 3 years for the said One Oculus location NsM Bldg ► In contrast, 2020 saw the smallest number of completions, only adding 21,546 sq.m. of office space in the City 223 Salcedo Luz Building

Autometics Center

KDC Plaza

2018 Completions 2019 Completions 2020 Completions

Page 48 14 July 2021 NEDA sa Makati Property Redevelopment Project #SGVforABetterPhilippines Makati City office demand situation Transactions profile

FY 2019 VS FY 2020 Traditional locators remain as the biggest driver of demand in Makati City, both pre- Outer circle – 2020 and during the pandemic. Inner circle - 2019

1% 2020 QoQ Transactions

35,000 5% 2% 30,000

43% 25,000

54% 20,000

15,000

93% squaremeters 10,000 2%

5,000

- Q1 Q2 Q3 Q4 Q1 2020 2021 POGO KPO Voice Traditional POGO KPO Voice Traditional Data Center

Source: Colliers Philippines Data as of Mar 2021

Page 49 14 July 2021 NEDA sa Makati Property Redevelopment Project #SGVforABetterPhilippines Makati City office demand situation Lease and vacancy rates

Lease Rates (LHS) vs Vacancy Rates (RHS) ► As vacancy rates increased by end-2020, Colliers saw an adjustment in lease rates in 1,800 9.0% all office grades, with average rates 1,600 8.0% decreasing by around 17% year on year ► This is expected to still drop by another 13% 1,400 7.0% in 2021 as a lot of buildings will come online,

1,200 6.0% and existing buildings still have some significant vacant spaces. 1,000 5.0% ► Recovery in rental rates is projected to start in 2022, as economies open, and businesses 800 4.0% stabilize.

600 3.0% ► A successful roll out of the vaccine drive is imperative for this to happen, and 400 2.0% businesses should be able to vaccinate its

200 1.0% employees for activities to really restart.

- 0.0% 2014 2015 2016 2017 2018 2019 2020 2021F 2022F 2023F 2024F 2025F

Grade B Grade A Premium Vacancy

Source: Colliers Philippines Data as of Mar 2021

Page 50 14 July 2021 NEDA sa Makati Property Redevelopment Project #SGVforABetterPhilippines Makati City situation – supply and demand Office leasing opportunities amid COVID-19 surge

Traditional locators will continue to be the biggest demand driver in the premium and Grade A offices in Makati City. As KPOs also start to get back on their feet, we see more of this transactions also happening. Demand While net take-up is expected to be on the positive in 2021, it will take time to return to pre-pandemic levels.

From 2021 to 2025, almost 490,000 sq.m. of office space is expected to come online in Makati City, with the Supply highest number of completions of around 175,000 sq.m. is slated within 2021.

Rents are projected to still have some adjustment by end-2021 as activity still does not match the amount of Rents space coming online, and vacancies continuously increase. Stabilization of net take-up will be key in the recovery of rental rates that is expected to happen starting 2022.

Vacancy levels is still expected to increase to 7.1% by year-end, as overhang from 2020 and additional office spaces expected to come online this year continue to drive vacancy rates upwards. It is expected to stabilize Vacancy at this level in the next few years as Makati City churns out office spaces continuously but will eventually decrease as activity picks up in the City.

Source: Colliers Philippines

Page 51 14 July 2021 NEDA sa Makati Property Redevelopment Project #SGVforABetterPhilippines Land value Market approach Market comparables Asking Price Land Location FAR PHP PHP / SQ.M. / Area PHP/SQ.M. Billion FAR 1. Planters Building 1,608 Esteban Street, Legaspi Village, Makati, (with old 16 1.600 995,025 62,189 Metro Manila building) 2. Concorde Building 2,331 Benavidez Street, Legaspi Village, Makati, (with old 16 2.331 1,000,000 62,500 Metro Manila building) 3. Smart Tower 2,400 6.140 , Salcedo Village, Makati, Metro (with office 16 (Transacted in 2,558,333 159,986 Manila building) 2020 4Q) 4. Ayala Avenue, Legazpi Village, Makati, Metro 2,400 16 4.800 2,000,000 125,000 Manila 770 5. Legazpi Village, 0.577 (Transacted (with old 16 750,000 46,875 Makati, Metro Manila in 2020 2Q) building) 975 6. Legazpi Village, (with old 16 1.500 1,538,462 96,154 Makati, Metro Manila building) Market value of land

Market value FAR 16 FAR 8 Market Value (per FAR) PHP 47,000 per sq.m. per FAR PHP 51,000 per sq.m. per FAR The freehold market value of the land is estimated at PhP752,000 per sq.m. considering an FAR of 16 but if the Market Value (per sq.m.) PHP 752,000 per sq.m. PHP 408,000 per sq.m. land is limited to an FAR of 8, the freehold market value is Market Value (total) PHP 1,353,600,000 PHP 734,400,000 estimated at PhP408,000 per sq.m.

Page 52 14 July 2021 NEDA sa Makati Property Redevelopment Project #SGVforABetterPhilippines Project structure

#SGVforABetterPhilippines The Project involves the design, financing, development, and operation of the NsM property, which will all be managed by the private sector

Involves design development Explore a range of possible and construction planning, which financing structures, includes planning principles and mechanisms and funding considerations, preparing the sources, based on the NsM building layout, zoning within the property’s cost and revenue area and infrastructure streams assessment and planning Design Financing

Overall building development; Operation & Manage the NsM property development of the NsM Development operations and liaise with its property into a mixed-use, Maintenance tenants, and maintain all of the green-design building NsM property’s facilities or contract with specialized service contractors to do so

Page 54 14 July 2021 NEDA sa Makati Property Redevelopment Project #SGVforABetterPhilippines Build-Operate-Transfer (“BOT”) is the expected project structure, where NEDA will provide property use rights to the Private Co., while the Private Co. will develop and operate the NsM building

NsM Property Redevelopment Project proposed structure – BOT NEDA

NsM property is Amortization transferred at the end Property use rights payments of concession period OR Concession fees (fixed/variable) Interest Principal Private Co. SPV Bank Loan

Develop, finance, operate Office/commercial space Office/commercial space lease Parking space Parking fees

Tenants

Preliminary data only. Subject to change. Page 55 14 July 2021 NEDA sa Makati Property Redevelopment Project #SGVforABetterPhilippines An alternative is the Build-Transfer-Operate (“BTO”) structure, where the Private Co. constructs the building and upon completion, ownership will be transferred to NEDA; the Private Co., however, operates and maintains the NsM property on behalf of NEDA

NsM Property Redevelopment Project proposed structure – BTO NEDA

NsM property is Amortization transferred upon Operations and payments completion of maintenance rights OR construction Concession fees (fixed/variable) Interest Principal Private Co. SPV Bank Loan

Develop, finance, operate Office/commercial space Office/commercial space lease Parking space Parking fees

Tenants

Preliminary data only. Subject to change. Page 56 14 July 2021 NEDA sa Makati Property Redevelopment Project #SGVforABetterPhilippines Financial highlights

#SGVforABetterPhilippines The NEDA sa Makati building is a 15-storey mixed use property with an estimated total project cost of PhP1.6b, expected to be completed in year 2025 Development cost assumptions Currency: PhP millions Development Cost Facility Floors Sqm or units per floor Total Horizontal development cost Commercial 1 350 350 sqm Site development cost/demolition 65.0 Parking 6 31 units 186 units Vertical development cost and land improvements 1 1,447 1,447 sqm Construction cost 1,350.7 Office – NEDA Engineering cost 84.9 Office – PIDS 2 1,447 2,895 sqm Project Management cost 14.2 4 1,447 5,790 sqm Contingency cost 75.7 Office – others Total 1,590.6 Function rooms/Auditorium 1 3 rooms 3 rooms

Development schedule Total leasable area - office Operating period

2021 10,132 sq.m. 35 years 2022 8% Operations start 2026 until 2060 2023 7% Number of leasable floors - 2024 44% Construction & development office 2025 41%

Y1 Y2 Y3 Y4 7 floors 4 years

Preliminary data only. Subject to change. Page 58 14 July 2021 NEDA sa Makati Property Redevelopment Project #SGVforABetterPhilippines The Project is expected to generate between PhP17.3b – PhP19.5b of revenues, translating to total operating cash flows of PhP10.8b – PhP12.4b over a 35-year operating period

Total revenue, 2026-2060 Project cash flow

900.0

PhP17.3b - PhP19.5b 700.0

Low scenario to high scenario 500.0 Total operating cash flow, 2026-2060 300.0 100.0 Operating period PhP10.8b - PhP12.4b PhPM (100.0) Low scenario to high scenario (300.0)

(500.0) ~71.6% - 74.6% ~53.0% - 55.0% (700.0) Development stage Operating profit margin: Php12.4 – Net profit margin: Php9.2b – PhP10.8b (900.0) 1 Jan 1 Jan 1 Jan 1 Jan 1 Jan 1 Jan 1 Jan 1 Jan 1 Jan 1 Jan 1 Jan 1 Jan 1 Jan 1 Jan 1 Jan 1 Jan 1 Jan 1 Jan 1 Jan 1 Jan 1 Jan 1 Jan 1 Jan 1 Jan 1 Jan 1 Jan 1 Jan 1 Jan 1 Jan 1 Jan 1 Jan 1 Jan 1 Jan 1 Jan 1 Jan 1 Jan 1 Jan 1 Jan 1 Jan 1 Jan PhP14.5b total operating profit total net profit 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 5.0% 10.0% Cash flow from operating activities - Low scenario Cash flow from operating activities - High scenario Investing cashflows 40.0% Office Commercial Monthly lease per sqm (PhP) Low scenario High scenario Utilization rate for function Lease escalation rate rooms/auditorium Commercial 1,200 1,500 95% in 2 years Office 900 1,100 CUSA 150 200 Ave. mature office occupancy rate starting year 3 for office lease • 50% in year 1 of operations Preliminary data only. Subject to change. Page 59 14 July 2021 NEDA sa Makati Property Redevelopment Project #SGVforABetterPhilippines Recap of key investment highlights

#SGVforABetterPhilippines The NsM Property is envisioned to be one of the state-of-the-art structures in the Philippines by developing it into a world-class, gender-responsive and green-designed building

Location

The Project is located in Makati Central Business District, the leading financial and central business Enhance company’s district in the country, thus may attract potential reputation investors and/or clients Financial returns

The Project is expected to be a green- The Project is expected to generate designed building thus may enhance the significant revenues and operating cash company’s reputation as an environmentally flows throughout its operating period and social responsible company

Aligned with the country’s Benefit to local and national priorities government The Project is in line with the objectives of Philippine The Project will result in inherent benefit to the local Development Plan (“PDP”) and Metro Manila and national government, by generating jobs, new Greenprint 2030, Metro Manila for all; green, business and as an additional source of revenue connected, resilient; offering talent and opportunity; processing knowledge and delivering services at home and abroad

Page 61 14 July 2021 NEDA sa Makati Property Redevelopment Project #SGVforABetterPhilippines Project Indicative Timeline

3Q 2021 1Q 2022 Completion and Publication of Invitation Approval of Feasibility to Bid Study

4Q 2021

Project Approval

#SGVforABetterPhilippines Q&A

The SGV Purpose Nurture leaders and enable businesses for a better Philippines. #SGVforABetterPhilippines Closing remarks from NEDA

The SGV Purpose Nurture leaders and enable businesses for a better Philippines. #SGVforABetterPhilippines SGV | Assurance | Tax | Transactions | Advisory

About SGV & Co. SGV is the largest professional services firm in the Philippines. We provide assurance, tax, transaction and advisory services. In everything we do, we nurture leaders and enable businesses for a better Philippines. This Purpose is our aspirational reason for being that ignites positive change and inclusive growth. Our insights and quality services help empower businesses and the economy, while simultaneously nurturing our people and strengthening our communities. All this leads to building a better Philippines, and a better working world. SGV & Co. is a member firm of Ernst & Young Global Limited.

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For more information about our organization, please visit ey.com/ph.

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