RealReal EstateEstate Market Overview

30 September 2009 Outline

• Market Overview: Retail, Residential, Office • Philippine Economic Overview • Market Overview: BPO • Tourism and Hotel Overview • Jones Lang LaSalle Leechiu: Who We Are, What We Do

2 Market Overview

Retail4,500,000 Sector 1,600

4,000,000 1,400

3,500,000 1,200 Rent in Php/sqm/month in Rent 3,000,000 1,000

2,500,000

800

Area in Square Meters 2,000,000

600 1,500,000

400 1,000,000

200 500,000

0 0 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Prime Rental Rates Average Rental Rates Supply of Real Estate Demand (Take Up) Market Overview Residential Condominium Sector 35,000 600 Rents peaked in 2008, now softening due to additional supply

30,000 500

25,000 Php/sqm/month in Rent 400 Lowest vacancy rate of 1% 20,000

No. of Units 300

15,000

200 10,000

100 5,000

0 0 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Supply of Real Estate Demand (Take Up) Average Rental Rates Market Overview Residential Sector

• Luxury and prime sector holding well • Enclosed villages up 10 – 15% in the last 12 months • Recommended buys in luxury condominium projects – i.e., West Block Rockwell, , Essensa, One McKinley Place, Regent Parkway • Selling below replacement cost • Growth of OFW remittances will determine future direction of middle-end market • Banks are still lending at favorable rates, providing easy access to financing – both for buyers and developers Market Overview Office Sector 7,000,000 TODAY: Vacancy of 14%, or 1,000 500,000 square meters 900 6,000,000 Highest vacancy of 1.5 million Lowest vacancy rate of 4%, square meters or 193,000 square meters 800

5,000,000 Php/sqm/month in Rent 700

600 4,000,000

500 Area in Square Meters 3,000,000 400

300 2,000,000

200

1,000,000 100

0 0 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 201 0 Makati Prime Rental Rates Makati Average Rental Rates Supply of Real Estate Demand (Take Up) Market Overview Office - Quarterly Supply vs Leased / Pre-Committed Space

375,000 Leased / Pre-Committed Supply Supply Reduction 350,000 325,000 Total of 1,707,244 sqm supply from 2008 - 2014 300,000 Oversupply Period Reduced by 341,867 sqm or 17% 275,000 250,000 225,000 Dramatic drop in supply may result 200,000 in rapid rise in rents. 175,000 150,000 125,000 100,000 75,000 50,000 25,000 0 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 2012 2014 20082008 20092009 20102010 20112011 593,086593,086 sqm.sqm. 575,009575,009 sqm.sqm. 176,770176,770 sqm.sqm. 213,380213,380 sqm.sqm.

Average Demand

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sqm

41.09%

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575,009

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0 0 2009 , 0 5

- 2009)

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Total 575,009 Supply: sqm 0 Total Supply: Leased/Pre-Committed: 41.09% Leased/Pre-Committed: Leased/Pre-Committed: Leased/Pre-Committed: Makati Others Ortigas BayCity Quezon City Quezon McKinley Hill McKinley Fort Eastwood City Eastwood PioneerComplex

Northgate Cyberzone Northgate

0

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0 5 1

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sqm 0

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593,086 77.97%

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2008

0 0

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Leased: 77.97% Leased: 5 2

Leased: Leased: 0 Total 593,086 Supply: sqm Total Supply: Makati Others Ortigas Bay City Quezon City Quezon McKinley Hill McKinley Fort Bonifacio Eastwood City Eastwood Pioneer Complex Northgate Cyberzone Northgate Market OverviewMarket Office - vs Supply (2008 Space / Pre-Committed Leased Market Overview Office - Supply vs Pre-Committed Space (2010 – 2011)

TotalTotal Supply: Supply: 176,770 176,770sqm sqm TotalTotal Supply: Supply: 213,380 213,380sqm sqm Pre-Committed:Pre-Committed: 13.69% 13.69% Pre-Committed:Pre-Committed: 0% 0%

Makati Makati

Fort Bonifacio Fort Bonifacio

Ortigas Ortigas

Quezon City Quezon City

McKinley Hill McKinley Hill

Eastwood Eastwood

Pioneer Complex Pioneer Complex

Northgate Cyberzone Northgate Cyberzone

Bay City Bay City

Others Others

0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 , , , , , , , , , , , , 5 0 5 0 5 0 5 0 5 0 5 0 2 5 7 0 2 5 2 5 7 0 2 5 1 1 1 1 1 1 2010 2011 BPO Industry Overview Number of Seats Total Number of BPO Seats: 240,714

LUZON 209,060 Seats – 188,425 (78%) % of Total No. of BPO Seats

VISAYAS 29,284 Seats Cebu – 22,569 (9%) % of Total No. of BPO Seats

MINDANAO 2,370 Seats

10 BPO Industry Overview Metro Manila Seat Distribution

Parañaque

Manila

Las Piñas Total Number of Seats in Metro Manila: 188,425 Marikina

Bay City

Alabang Northgate Cyberzone

Fort Bonifacio McKinley

Mandaluyong Pioneer

Ortigas

Makati

Quezon City Eastwood UP-Ayala No. of Seats 0 5,000 10,000 15,000 20,000 25,000 30,000 35,000 40,000 45, 000 50,000

11 BPO Industry Overview Provincial Seat Distribution General Santos

Tarlac

Camarines Sur

Cagayan De Oro Total Number of Seats Outside

Leyte Metro Manila: 52,287

Dumaguete

Cavite

Davao

Rizal

Batangas

Baguio

Bacolod / Iloilo Iloilo

Laguna

Pampanga

Cebu No. of Seats

0 5,000 10,000 15,000 20,000 25,000

12 Philippine Economic Overview 1997 vs. 2008 Crisis vis-à-vis Property Market

1997 Asian Financial Crisis 2008 Global Financial Crisis Rapid climb in interest rates plus Falling rates forcing mobilization of capital appreciation of the US Dollar forced loan into real estate investments; credit still free- Interest Rates defaults, bankruptcies and unfinished flowing buildings 2.3 million square meters of Prime, Grade 1.4 million square meters of largely Grade Supply A and B stock, 60% of which is in Makati, B stock, spread across Metro Manila and 40% in Ortigas Severe contraction as companies closed BPO industry growing in the Philippines as Demand a result of cost-cutting measures of multinational companies Long "U" shape recovery after 5 years "V" shape recovery after 18 months to 2 Rents years Market Overview Demand By Big Movers

Big Movers (By Industry) Required Size (sqm) Reasons Banking / Financial Services 6,000 Expansion 3,000 Disaster Recovery Site BPO 26,000 Expansion 21,000 Expansion 14,000 Expansion 14,000 Expansion 12,000 Expansion 10,000 First Facility in the Philippines IT 40,000 Relocation Consumer Goods 3,000 Relocation Various transactions ranging from 1,000 - 46,000 Relocation / Expansion 7,000 sqm TOTAL 195,000

• Demand coming mostly from the BPO industry • Timing to commit – 4Q 2009 to 1H 2010 • If these are successfully transacted, it will set a floor price on rentals

14 Market Overview BPO / Call Center Industry 16,000 7,000

14,000 6,000

12,000 5,000

10,000

4,000

8,000

3,000

6,000

2,000 4,000

1,000 2,000

0 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 BPO Industry Revenues Call Center Industry Revenues Number of Call Center Seats 160,000Country Risk, Visitor Arrival and Call Center Seat Growth3,500,000

140,000 3,000,000

120,000 2,500,000 Tourist Arrivals Tourist 100,000 2,000,000 80,000 1,500,000 Call CenterCall Seats 60,000

1,000,000 40,000

20,000 500,000

0 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 911 2000 2001 2002 2003 2004 2005 2006 2008 2007 Milenyo EDSA 3 EDSA EDSA Dos EDSA ZTE Scandal ZTE "ToAgain" Fly SARS Outbreak SARS OakwoodMutiny ERAP Conviction ERAP Infanta Mud Slide Mud Infanta US Financial US Crisis CongressBombing Glorietta 2 Bombing 2 Glorietta ERAP Impeachment ERAP DavaoTerminal Bus SuperFerryBombing Zamboanga Bombing Zamboanga "Garci" Hello Scandal Glorietta Mall Bombing Glorietta ZTE-NBN Irregularities ZTE-NBN Cotabato City Bombing City Cotabato Davao Airport Bombing Davao Airport Dos Palmas Kidnapping Palmas Dos Jose PidalJoseCase Plunder Valentine's Day Bombing Day Valentine's Manila Peninsula Incident Peninsula Manila Southern Leyte Mud Slide Leyte Mud Southern JemaahIslamiyah escape 1997 AsianFinancial Crisis 1997 Captured JemaahCaptured Islamiyah PhilippineGeneralElections PhilippineGeneralElections Sentenced JemaahIslamiyah Sentenced Cotabato Bus Station Bombing Station Bus Cotabato State of Emergency Declaration Emergency of State "In The Presence of my Enemies" my Presenceof The "In General Santos Bombing GeneralSantos MallCity

General Santos GeneralSantos ChristmasBombing Call Center Seats Tech Bubble / US Stock Market Crash StockMarket US / TechBubble SynchronizedManila inMetro Bombing Gracia and Martin Burnham Kidnapping and Gracia MartinBurnham Tourist Arrivals SM Megamall Cinema Cinema Restroom Bombing Megamall SM

Source: BPAP, DOT Masterminds V-DayBombing Death Sentence

16 NASDAQ, Dow Jones and Call Center Seat Growth

160,000

140,000

120,000

100,000

80,000 Call CenterCall Seats 60,000

40,000

20,000

0 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 911 2000 2001 2002 2003 2004 2005 2006 2008 2007 Milenyo EDSA 3 EDSA EDSA Dos EDSA ZTE Scandal ZTE "ToAgain" Fly SARS Outbreak SARS OakwoodMutiny ERAP Conviction ERAP Infanta Mud Slide Mud Infanta US Financial US Crisis CongressBombing Glorietta 2 Bombing 2 Glorietta ERAP Impeachment ERAP DavaoTerminal Bus SuperFerryBombing Zamboanga Bombing Zamboanga "Garci" Hello Scandal Glorietta Mall Bombing Glorietta ZTE-NBN Irregularities ZTE-NBN Cotabato City Bombing City Cotabato Davao Airport Bombing Davao Airport Dos Palmas Kidnapping Palmas Dos Jose PidalJoseCase Plunder Valentine's Day Bombing Day Valentine's Manila Peninsula Incident Peninsula Manila Southern Leyte Mud Slide Leyte Mud Southern JemaahIslamiyah escape 1997 AsianFinancial Crisis 1997 Captured JemaahCaptured Islamiyah PhilippineGeneralElections PhilippineGeneralElections Sentenced JemaahIslamiyah Sentenced Cotabato Bus Station Bombing Station Bus Cotabato State of Emergency Declaration Emergency of State "In The Presence of my Enemies" my Presenceof The "In General Santos Bombing GeneralSantos MallCity

General Santos GeneralSantos ChristmasBombing Call Center Seats Tech Bubble / US Stock Market Crash StockMarket US / TechBubble SynchronizedManila inMetro Bombing Gracia and Martin Burnham Kidnapping and Gracia MartinBurnham NASDAQ SM Megamall Cinema Cinema Restroom Bombing Megamall SM Dow Jones

Source: BPAP, Google Finance Masterminds V-DayBombing Death Sentence

17 TourismTourism The Next Big Thing Global Tourism Overview 2008

• Total international tourist arrivals: 922 million • Total tourism receipts of USD 944 billion, of which the Philippines got:

50%50% of 1% (USD 5 billion in tourist receipts), or

32%32% of 1% (3.2 million tourist arrivals in 2008) • 80% of international travel takes place within the same region • Top international tourism spenders Expenditure Expenditure Country Country (USD billion) (USD billion) 1.Germany 91.0 7. Japan 27.9 2.United States 79.7 8. Canada 26.9 3. United Kingdom 68.5 9. Russian Federation 24.9 4.France 43.1 10. Netherlands 21.7 5. China 36.2 11. South Korea 20.9 6. Italy 30.8 Source: WTO

19 Philippine Tourism Overview Asia and the Pacific - Philippines 2008 Tourist Arrivals (in '000) 1 China 53,049 2 Hong Kong 29,506 3 Malaysia 22,052 4 Thailand 14,584 5 Macau 10,605 • Total international tourist 6 Japan 8,351 arrivals: 922 million 7 Singapore 7,778 8 Korea 6,891 • Of the 922 million arrivals, 184.1 9 Indonesia 6,234 million were in Asia and the 10 Australia 5,586 11 India 5,367 Pacific 12 Vietnam 4,236 13 Taiwan 3,845 14 Philippines 3,139 15 New Zealand 2,459 16 Cambodia 2,001 17 Laos 1,295 18 Guam 1,142 19 Pakistan 823 20 Maldives 683 21 Fiji 585 22 Nepal 500 Source: WTO, HKTC 23 Sri Lanka 438

20 Philippine Tourism Overview Top 15 Tourist Destinations in the Philippines

2009 Rank 2008 Rank Camarines Sur 1 6 Cebu 2 1 Boracay 3 3 Baguio 4 2 Davao 5 5 Puerto Galera 6 7 Bohol 7 8 Bacolod 8 4 Dumaguete 9 9 Ilocos Norte 10 10 Masbate 11 11 Camarines Norte 12 15 Puerto Princesa 13 14 Legaspi 14 13 Catanduanes 15 16

Source: DOT Philippine Tourism Overview Tourist Arrivals and Tourist Receipts 3,500,000 6,000

3,000,000 5,000

2,500,000 (inReceipts Tourist millions)USD 4,000

2,000,000

3,000

Tourist Arrivals 1,500,000

2,000 1,000,000

1,000 500,000

0 0 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 Source: WTO Arrivals to Phils. Receipts (in $M) Philippine Tourism Overview Tourist Arrivals and Tourist Receipts 3,500,000 6,000

3,000,000 5,000 Tourist Receipts (inReceipts Tourist millions)USD

2,500,000 4,000

2,000,000 3,000 1,500,000 Tourist Arrivals 2,000 1,000,000

1,000 500,000

0 0 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 Arrivals to Phils. Receipts (in $M) 911 2000 2001 2002 2003 2004 2005 2006 2008 2007 Milenyo EDSA 3 EDSA Sentence EDSA Dos EDSA ZTE Scandal ZTE "ToAgain" Fly SARS Outbreak SARS OakwoodMutiny ERAP Conviction ERAP Infanta Mud Slide Mud Infanta US Financial US Crisis CongressBombing Glorietta 2 Bombing 2 Glorietta ERAP Impeachment ERAP DavaoTerminal Bus SuperFerryBombing Zamboanga Bombing Zamboanga "Garci" Hello Scandal Glorietta Mall Bombing Glorietta ZTE-NBN Irregularities ZTE-NBN Cotabato City Bombing City Cotabato Davao Airport Bombing Davao Airport Dos Palmas Kidnapping Palmas Dos Jose PidalJoseCase Plunder Valentine's Day Bombing Day Valentine's Manila Peninsula Incident Peninsula Manila Southern Leyte Mud Slide Leyte Mud Southern JemaahIslamiyah escape 1997 AsianFinancial Crisis 1997 Captured JemaahCaptured Islamiyah PhilippineGeneralElections PhilippineGeneralElections Sentenced JemaahIslamiyah Sentenced Cotabato Bus Station Bombing Station Bus Cotabato State of Emergency Declaration Emergency of State "In The Presence of my Enemies" my Presenceof The "In General Santos Bombing GeneralSantos MallCity General Santos GeneralSantos ChristmasBombing Masterminds V-DayBombing Death Tech Bubble / US Stock Market Crash StockMarket US / TechBubble SynchronizedManila inMetro Bombing Gracia and Martin Burnham Kidnapping and Gracia MartinBurnham

Source: WTO Cinema Restroom Bombing Megamall SM Tourism Arrivals in the Philippines By Country of Residence 700,000 South Korea United States Japan China Australia Taiwan

600,000

500,000

400,000 Tourist Arrivals

300,000

200,000

100,000

0 Source: DOT 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008

24 Philippine Tourism Overview Thailand and Philippines

Thailand Philippines Population 67 million 90 million Tourist Arrivals 14.54 million 3.4 million Tourism Receipts USD 16 billion USD 5 billion % of GDP 6.50% 6.20% Malaysia Korea Japan USA Top 5 Tourists Korea Japan China China United Kingdom Australia

Source: Thailand Tourism, DOT

25 China and Taiwan Tourists To The Philippines 300,000

The Taiwanese preferred Hong Kong and Japan as tourist destinations 250,000

200,000 Increased DOT marketing efforts— 14-day special Visa for Chinese tourists (171.5% increase in 150,000 Chinese tourists) Tourist Arrivals

100,000

50,000

0 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008

Source: DOT China Taiwan

26 China’s Top Tourist Destinations 18,000,000

16,000,000

14,000,000

12,000,000

10,000,000

8,000,000 Tourist Arrivals

6,000,000 In 2007, 157,601 tourists from China came to the Philippines 4,000,000

2,000,000

0 2001 2002 2003 2004 2005 2006 2007

Source: WTO Hong Kong Macau Thailand Vietnam Singapore

27 Total Hotel Supply and Occupancy in Metro Manila 16,000 80 40% increase in hotel room supply in the last Crowne 15 years, or 2.6% per annum on average Expansion Plaza of Makati Manila 14,000 Shangri-La 70 Pan Pacific and Westin Manila Philippine Some major Bellevue Plaza hotels Manila Manila 12,000 closed down 60 Diamond Hotel and Makati Shangri-La

10,000 50 OccupancyRate

8,000 40 No. of Hotel Rooms

6,000 30

4,000 20

2,000 10

0 0 Source: DOT 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008

28 Future Hotel Supply in Metro Manila (2009 – 2013) 1,400

1,200 Future Hotel Supply in Metro Manila: 2,674 hotel rooms across 8 hotels

1,000

Shangri-La (Fort 800 Bonifacio)

No. of Hotel Rooms 600 Maxims Hotel (Newport City) 400 Grand Hyatt Picasso (Fort Serviced Raffles Bonifacio) Residences Residences (Makati) Marriott and Manila Hotel 200 Fairmont Ocean Park (Newport Hotel (Manila) City) The Eastwood (Makati) Park Hotel (Eastwood) 0 Source: DOT 2009 2010 2011 2013

29 Hotel Supply in Provincial Areas By Year-End 2009 1,000

900 Grand Water Future Hotel Supply in Provincial Areas: 800 1,539 hotel rooms across 9 hotels Seven Stones 700 Boracay Regency 600 Lagoon

Phoenex 500 Hotel No. of Hotel Rooms 400

Crowne 300 Regency Expansion Radisson Hotel 200

100 Summer Discovery Ridge Bay Misibis Microtel 0 Source: DOT Boracay Cebu Tagaytay Albay Puerto Prinsesa

30 Who We Are, What We Do

• JLLL is the most prominent real estate services firm in the country - Sales and Leasing - Facilities & Property Management - Project Management - Research, Consultancy and Valuation • JLLL is at the forefront of the BPO industry —serviced 10 of the top 12 BPOs in the Philippines, handled more than 45 contact center clients, and acquired a total of 102 sites for these clients. • Serviced around 50% of all office space occupied by the outsourcing industry. • Negotiated about 110,000 sqm of build-to-suit buildings, and about 90% of BPO office lease transactions outside Metro Manila. A Track Record of Achievement

Fortune’s World’s Most Best Overall Global Advisor The Global Outsourcing Admired Companies (2009) and Consultant (2009) 100 List (2009)

CRO’s “100 Best World’s Most Ethical Sustainable Cities Awards Corporate Citizens (2009) Companies (2008, 2009) (2008)

P&G’s External Business Forbes 400 List of Best Asia MS 100 List Partner of the Year Big Companies (2008) (2008) Thank you!

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