D.M. Wenceslao & Associates, Incorporated
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D.M. Wenceslao & Associates, Incorporated FY 2018 Analyst Briefing 18 February 2019 Disclaimer The information in this document has been prepared by D.M. Wenceslao & Associates, Incorporated (“DMW”) and does not constitute a recommendation regarding the securities of DMW. The statements contained in this document speak only as at the date as of which they are made, and DMW expressly disclaims any obligation or undertaking to supplement, amend or disseminate any updates or revisions to any statements contained herein to reflect any change in events, conditions or circumstances on which any such statements are based. This presentation may not be all-inclusive and may not contain all the information that you may consider material. 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This presentation must not be distributed to the press or any media organization. 1 Aseana City, our development project with total land area of 107.5 hectares located along the coastal waters of Manila Bay bordering the City of Pasay and the City of Parañaque 6 Points of Focus 11 Development Pipeline 16 Operating and Financial Highlights 23 Summary 2 Summary of Land Holdings in Aseana City Positioned as the next major mixed-use CBD in Metro Manila anchored by tourism, recreational developments and retail malls Remaining Land Reserves (313,415 sq.m.) Land Used/Allocated Land Allocated for for Development Future Sales (262,862 sq.m.) (10,000 sq.m.) Completed Land Allocated for Properties Future Leases (36,659 sq.m.) (20,103 sq.m.) Land Leased Land Holdings (155,418 sq.m.) (576,276 sq.m.) Unallocated Land (283,312 sq.m.) Land Allocated for Pipeline Projects (56,769 sq.m.) Roads & Right of Way (14,016 sq.m.) 3 Value of Properties Rises 21% YoY to P161B Owned Land Holdings Completed Properties(1) Pipeline Properties Land area (sq.m.) Total leasable floor area (sq.m.) Leasable/saleable floor area (sq.m.) Parkside Roads and Aseana Town Place 2 right of way Aseana Center MidPark Land currently 29,925 14,016 Powerstation 12,849 Aseana One Towers leased 8912 Asean Ave. 155,418 Building 20,189 46,818 4,710 68,980 Pixel Aseana Residences Completed Square 13,106 Remaining properties 2,137 Parqal land 67,439 36,659 Aseana Two Aseana Six reserves 14,289 62,316 313,415 Pipeline Aseana Three Aseana Aseana Five properties 30,914 Mainstreet 2 58,680 56,769 36,856 Total: 576,276 sq.m. Total: 85,087 sq.m. Total: 384,000 sq.m. Valuation (PHP mm) Valuation (PHP mm) Valuation (PHP mm)(3) Parkside Completed properties (1) MidPark Place 2 14,991 Aseana One 8912 Asean Towers 1,254 (2) 9% Aseana Town 1,903 Ave. 1,973 Land currently leased 2,123 Center 42,722 Aseana Two 27% Pipeline properties 4,388 17,705 1,497 Pixel 11% Residences 996 Aseana Three Aseana Six Parqal 5,573 Remaining 2,197 2,258 land reserves (2) Aseana Powerstation 85,516 Aseana Aseana 53% Building Square Aseana Five 2,848 Mainstreet 2 1,963 2,159 1,565 Total: PHP160,934 mm Total: PHP14,991 mm Total: PHP17,705 mm Notes: Inspection date is at November 23, 2018 1. Excluding S&R Building 2. DMW holds a 60% shareholding interest in Bay Area Holdings, Inc. or BAHI through Fabricom, Inc. as of December 31, 2018. 3. As is, where is basis 4 Rapidly Appreciating Land Holdings Secured at Low Cost Valuation per sq.m. (PHP’000) 985 805 782 655 561 500 CAGR = 21% 390 300 319 255 273 234 31.5 2006 2018 2018* 2019F 2017 2018 2019F 2017 2018 2019F 2017 2018 2019F Aseana City Ortigas CBD Fort Bonifacio Makati CBD Source: Colliers 4Q2018 Property Market Overview *Aseana City (2018 Actual) is based on transacted price of P318,888/ sq.m. VAT exclusive for a 5,626.88 sq.m. parcel of land sold in March 2018 www.afprsbs.com/uploads/3/7/5/2/37521453/3__aseana_6b-d_.jpg www.afprsbs.com/uploads/3/7/5/2/37521453/tor_aseana_6e_new.pdf 5 Stable Economic Growth Fuels Office Demand Competitive Grade A Office Capital Values and Rent (1) Key Factors 100,000 Capital Value Rent 1 Firm Macro Environment 2,000 80,000 USD/ 1,600 ▪ Steady development of the . 60,000 sq.m Philippine economy with a 1,200 healthy start to 2019 buoyed sq.m ./year by sustained economic growth, 40,000 Manila (Makati) 800 USD/ slowing inflation, improving $2,854 $247 job market and manageable 20,000 400 cost of capital - - 2 Bright Prospects for Manila Seoul (CBD) Seoul Perth (CBD) Perth ▪ Manila ranks 12th most rapidly (CBD) Hanoi Beijing (CBD) Beijing Sydney (CBD) Sydney Taipei (Xinyi) Taipei Osaka (2 Kus) (2 Osaka Tokyo (5 Kus) (5 Tokyo Jakarta (CBD) Jakarta Chennai (SBD) Chennai Bangkok (CBA) Bangkok growing city in the world based (CBD) Brisbane Adelaide (CBD) Adelaide Shanghai (CBD) Shanghai Manila (Makati) Manila Auckland (CBD) Auckland Canberra (CBD) Canberra NCR Delhi (SBD) Delhi NCR Bengaluru (SBD) Bengaluru Singapore (CBD) Singapore Melbourne (CBD) Melbourne on socio-economic and real (CBD) Wellington Guangzhou (ZJNT) Guangzhou Mumbai (SBD BKC) (SBD Mumbai (1) (CC) Lumpur Kuala estate momentum indicators (Central) Kong Hong Ho Chi Minh City (CBD) City Minh Chi Ho ▪ Manila (Makati) office has 5th lowest capital value and 9th Sustained Demand to Absorb New Office Deliveries (4) Rising Average Office Rental Rates (4) cheapest rental rates across 27 cities in Asia Pacific (1) 1,200,000 8% 1,400 30% ▪ College graduates grew 5% ₱1,200 1,000,000 1,200 Percentage Growth annually from 2010 to 2018 Percentage Growth 20% indicating adequate supply for 6% ₱942 5.0% 1,000 future employment demands (2) 800,000 . 800 10% 600,000 4% 3 & Multiple Growth Engines sq.m 8.0% 600 0% 400,000 ▪ IT-BPM labor workforce in 400 2% PHP/sq.m./month Metro Manila is expected to 200,000 -10% reach 1.3 million FTEs by 2022 200 which translates to about 3 0 0% - -20% (3) million sq.m. of office space 2017 2018 2019F 2020F 2021F 2002 2005 2008 2011 2014 2017 2021F ▪ Offshore gaming and flexible Metro Manila New Supply (LHS) Take-up (LHS) Metro Manila Office Rental Rate y-o-y growth workspaces have ramped up Vacancy at Year End (RHS) Manila Bay (PHP/sq.m.) over the last two years and are Indicative: P1,000 – P1,100 Vacancy: 1% poised for continued growth Transacted: P900 – P1,000 Source: (1) Jones Lang LaSalle, (2) Commission on Higher Education, (3) IT-BPM, (4) Colliers 6 Differentiation To Keep Brisk Residential Sales Key Trends Average Residential Condominium Prices (PHP ‘000/sq.m.) Vertical developments such as condominiums have become a popular 241 214 choice among local and foreign homeowners and investors.