REAL ESTATE MARKET INSIGHTS August 2017 the PHILIPPINES the Philippines

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REAL ESTATE MARKET INSIGHTS August 2017 the PHILIPPINES the Philippines REAL ESTATE MARKET INSIGHTS August 2017 THE PHILIPPINES The Philippines LITERACY RATE 97.5% 6.8% GROWTH 103 LABOR FORCE GDP 68.1 Mn million 2.6% 24 years old INFLATION RATE POPULATION Average age of Filipinos D E B T CREDIT PHILIPPINE RATING GDP EXTERNAL $292.45B S & P BBB $76.62B (SEPT 2016) MOODY’S Baa2 FOREIGN PUBLIC RESERVES FITCH BBB- 47.4% of GDP $81B (1H2016) Source: Trading Economics, BSP 3 Foreign Investment in the Philippines LEASE TERM 25 years Renewable for another 25 years 40% In some cases, FOREIGN EQUITY LIMIT 50 years Renewable for another 25 years PERSONAL INCOME TAX If annual net taxable 30% income is at least P500,000 annual income (USD10,000) CORPORATE 32% INCOME TAX Source: Trading Economics, BSP 4 Philippine Foreign Direct Investments (FDI) In USD Billions 7.00 6.00 6.30 5.84 5.74 5.84 5.00 4.00 3.00 3.22 2.92 2.71 2.00 2.06 2.01 1.66 1.00 1.34 1.07 0.00 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016F Source: World Bank 5 Government’s Socioeconomic Agenda PRES. DUTERTE’S 10-POINT SOCIOECONOMIC AGENDA Infrastructure Spending 1 2. Current macroeconomic policies DUTERTENOMICS: 3. Ease of Doing Business “Build, build, build program” 4. Social protection programs “Golden Age of Infrastructure” in the Philippines 5. Rural and value chain development -Budget Secretary Benjamin Diokno 6. Security and land tenure • Manila Subway (P227 billion) • Mindanao Railway (P31.5 billion) 7. Human Capital Development • NLEX-SLEX Connector Road (P23.30 billion) • BGC to Ortigas Road Link Project (P4 billion) 8. Science, technology, and creative arts • Philippine National Railways North 1 (P105.3 billion) • Philippine National Railways North 2 (P150 billion) 9. Tax Reform • Philippine National Railways South Commuter (P134 billion) • PNR South Long Haul (P151 billion) • Subic-Clark Cargo Railway Project (P32.5 billion) 10. Responsible Parenthood & • Unified common station (P2.8 billion) Reproductive Health Source: DOH 6 Demand Drivers Urban BPO Employee’s Overseas Filipino Population Growth Housing Need Remittances Need to live 10 million 48.6% Growing number near OF’s can invest in Real Estate of Filipinos of BPO workers their live in Urban Areas* workplace. More than 50% Housing backlog needs of remittances are to be addressed and real estate related It is projected to rise to 56.3% demand for dormitories by 2030 and 66% by 2050. will rise. Source: Keynote speech of Sec. Arsenio M. Balisacan Director General of NEDA “The Philippine Economic Growth and the Growth in the Property Sector” 2015 7 * 2010 Philippine Market Penetration Money Market Philippine money market has a good 4% life insurance market potential which the population is not penetration. taking advantage of. 53% of Filipino families own a car. “...together with the multitude of auto loans with their 0.7% of Filipinos easier payment terms and low interest rates, makes buying cars more affordable today than ever before.” invest in the stock market. Home Ownership Rate -<60% “Compared to other Asian countries like Singapore or Taiwan, the Philippines still Per Capita GNI - PhP 94,504 has low home ownership rates.” as of 2016 5% of Filipinos own a credit card. Underemployment Rate - 16.3% “The biggest reason card penetration is as of January 2017 very low in the country is the lack of information about the prospective “NEDA said that this was the lowest rate debtor.” recorded since 2006.” 14% of Filipinos have bank accounts. Unemployment Rate - 6.6% “The members that are banked are mostly as of January 2017 employees, either by private companies or by the “The government must focus interventions to diversify the government.” sources of income of our workers in the agriculture sector, increase labor participation of women, and address youth Source: BSP, Manila Bulletin, MarketMonitor,PhilStar,Nielsen, Topgear, Rappler unemployment and underutilization.” OFFICE MARKET Metro Manila Outlook Key Insights There is a very strong pipeline of office space coming in 2017. Quezon City Demand drivers are also very strong primarily fueled by IT-BPM industry and recently, the online gaming industry. Manila San Juan Ortigas/ Mandaluyong Pasig Market has seen an unprecedented level of pre-commitments at 500,000 sqm Makati Bay/ Pasay BGC / Taguig In 2017, we will see an equilibrium of supply and demand. Parañaque Bonifacio Global City remains to be the biggest Las Pinas producer of office space and is still the preferred location over other districts. Alabang 10 Provincial Outlook Key Insights LAOAG CAGAYAN BAGUIO Companies will continue to look for new TARLAC and untapped labor markets. BULACAN PAMPANGA QUEZON National Government promotes new CAVITE / developments in the provinces. BATANGAS / LAGUNA CAPIZ Preferred areas for expansion are PALAWAN ILOILO Luzon and Visayas. BACOLOD DUMAGUETE BPOs in the provinces will continue to offer relocation incentives to interested applicants. ZAMBOANGA DAVAO 11 Provincial Outlook IT-BPAP Roadmap 2022 Whilst 70% of the total projected IT-BPM workforce will still remain in Metro Manila, National Government’s all inclusive-plan will positively impact expansion in the provinces. IT-BPM labor workforce in the provinces is estimated to grow by 60% in 2022. Provincial full time employees will grow from 1.2 million to 1.8 million in the next 5 years, which translates to 3 million of office requirement Source: IT-BPAP Roadmap 2022 12 Metro Manila Cityscapes • Most of these districts will be fully developed by 2018. • There will be little land left for development. • The most important districts moving forward will be Bonifacio Global City, Bay Area, Filinvest City, Evia and Arca South. Quezon City 3 MAJOR CBDs MAKATI MAKATI CBD. CENTURY CITY. ROCKWELL CENTER. CIRCUIT MAKATI. Manila San Juan ORTIGAS ORTIGAS CBD. ROCKWELL BUSINESS CENTER. ARCOVIA CITY. Manda- Ortigas/ SILVER CITY. CAPITOL COMMONS. luyong Pasig BGC BONIFACIO GLOBAL CITY. MCKINLEY WEST. MCKINLEY HILL. Makati UPTOWN. VERITOWN. Bay/ Pasay BGC / Taguig 46 BUSINESS PARKS Parañaque QUEZON CITY. UP TECHNOHUB. EASTWOOD CITY. ETON CENTRIS. ARANETA, CYBERARK. ROBINSONS BRIDGETOWNE IT PARK. VERTIS NORTH. UP TOWN CENTER. FAIRVIEW TERRACES. ALI CLOVERLIEF BALINTAWAK. NUVO. MANDALUYONG. GREENFIELD DISTRICT. ROBINSONS CYBERGATE. ROCKWELL SHERIDAN. SAN JUAN. Las Pinas SANTOLAN TOWN PLAZA. MUNTINLUPA. FILINVEST CORPORATE CITY. LA FUERZA. NORTHGATE CYBERZONE. MADRIGAL BUSINESS PARK. ALABANG WEST. TAGUIG. ARCA SOUTH. LAS PINAS. PORTOFINO. EVIA. PASAY. NEWPORT CITY. SM MALL OF ASIA COMPLEX. METROPOLITAN BUSINESS PARK. DOUBLE DRAGON CYBERCAMPUS. FILINVEST Alabang CYBERZONE PASAY. PARANAQUE. ASIAWORLD CITY. ASEANA BUSINESS PARK. AYALA ASEANA. MANILA. CITYPLACE. SAN LAZARO. 13 Regional Cityscapes LAOAG. CAMELLA. VALDEZ CENTER. CAGAYAN. CAGAYAN Unprecedented countryside SPECIAL ECONOMIC ZONE AND FREEPORT. PROJECT PRIMO. development. BAGUIO. BAGUIO AYALA LAND TECHNOHUB. SM BAGUIO CYBERZONE BUILDING. PCH IT CENTER. ABANAO SQUARE. LAOAG CAGAYAN TARLAC. LUISITA BUSINESS PARK. TARLAC PROVINCIAL IT 2 Approximately PARK. BULACAN. PDC TECHNOPARK. ALTARAZA. FIRST 132,028 hectares BAGUIO 2 BULACAN IT PARK. CIUDAD DE VICTORIA. ABS-CBN of master-planned or CAMPUS. URDANETA. CB MALL. 4 TARLAC mixed-use developments 2 9 BULACAN PAMPANGA CAVITE. BATANGAS. LAGUNA. VERMOSA. Over 83 I.T. parks and 5 PONTEFINO. SUNTECH IT PARK. HAMILO COAST. PANGASINAN 1 1 QUEZON SMDM IT CENTER. SOUTHFORBES IT PARK. business districts CAVITE / BATANGAS 11 SOUTHWOODS. NUVALI. ETON CITY. / LAGUNA GREENFIELD CITY. PUERTO AZUL. Countryside development going through CEBU. CEBU IT PARK. CEBU SRP. unprecedented construction boom driven by CEBU BUSINESS PARK. MACTAN NEWTOWN. AKLAN 1 1 CAPIZ ABOITIZLAND CEBU. WATERFRONT TOWNSHIP. CITTA DE MARE. SMC. OAKRIDGE BUSINESS PARK BPO and tourism. PALAWAN ILOILO 5 DAVAO. MATINA IT PARK. ABREEZA. DAVAO PARK 2 9 CEBU DISTRICT. LANANG IT PARK. DAMOSA IT PARK. BACOLOD 7 PAMPANGA. CLARK SPECIAL ECONOMIC ZONE. NORTHPOINT. CAMELLA. CIUDADES. LUBI ISLAND PHILEXCEL BUSINESS PARK. BERTAPHIL BUSINESS PLANTATION. PARK. SM CITY CLARK. CLARK GREEN CITY. GGLC. DUMAGUETE 4 NEPO CENTER. ALVIERRA. CAPILION. AKLAN. PALAWAN. LIO RESORT TOWN. SAN BORACAY NEW COAST. CAPIZ. PUEBLO DE PANAY 4 VICENTE. QUEZON. BALESIN ISLAND TECHNOPARK. ILOILO. ILOILO TECHNOHUB. ATRIA CAGAYAN DE ORO CLUB PARK DISTRICT. GAISANO CAPITAL. AYALA SICOGON. ZAMBOANGA 4 ZAMBOANGA. MEGALAND MALL. ILOILO BUSINESS PARK. BACOLOD. LOPUE’S 9 CITYMALL ZAMBOANGA. EAST IT CENTER. ONE AND TWO SANPARQ. THE DAVAO ZAMBOECOZONE AND FREEPORT NEW BLOCK IT PARK. ROBINSONS CYBERGATE CENTER. TOWNSHIP. ZAMBOECOZONE HIGHLANDS. CAGAYAN DE ORO. LOPUE’S SOUTHSQUARE IT PARK. BACOLOD IT LIMKETKAI CENTER. SM CITY BPO 2. PARK. CAPITOL CENTRAL. DUMAGUETE. CENTRIO. ONE PROVIDENCE. DUMAGUETE BUSINESS PARK. LINKSYS IT PARK. LP Legend: IT PARK. YY STAR DAS. Number of townships 14 Growth Sectors Persistent growth despite prevailing political, Prepare for a boom in infrastructure, security TOURISM AND problems and natural disasters INFRASTRUCTURE for the past 15 years. Source: UNWTO, iBPAP, World Bank 15 PH Growth Amidst Historical Events ZTE Scandal Makati Bus Explosion EDSA II Conviction of ERAP GDP expanded by 7% Tropical Storm Juaning EDSA III Glorietta 2 Bombing National and Local Elections Typhoon Sendong 9-11 Manila Peninsula Mutiny Rodrigo Duterte proclaimed as new Pres. Phil. General Elections 2011 Arrest of former Pres. Gloria Arroyo Pres. Duterte enjoys a record high trust 2001 Cotabato Bus Station Bombing 2007 rating of 92% Dos Palmas Kidnapping Congress Bombing Corona
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