RESEARCH

METRO MANILA 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 Thailand 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 38% in the in the Philippines was likewise next 5 years. A UHNWI was defined remarkable at 34%, following India’s Economic Indicators as a person with a net worth of over 35%. From 24,162 in 2018, the US$30 million. The Philippines has number of Filipino millionaires is consistently been reported as one of the countries with the fastest UHNWI forecasted to reach more than growth projections in the past 32,000 in 2023. versions of the report. Moreover, the 5.6% Philippines was expected to record One of the leading factors driving GDP 296 UHNWI by 2023. The projected UHNWI growth is investments in Q1 2019 growth of UHNWI in the Philippines non-financial assets such as real was second to India’s 39%. estate. The UHNWI are diversifying asset portfolio and investing in Backed by a strong overall economic various areas worldwide. Appetite for performance, 8 out of the top 10 real estate investments continues to 3.3% countries with the fastest projected increase globally due to the relatively Inflation Rate UHNWI population growth were from higher yield. Thirty-four percent March 2019 Asia. India, Philippines, China, (34%) of the surveyed private Indonesia, Malaysia, Vietnam, bankers and wealth advisers revealed an increase in client’s 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 signified 11% 35% an already robust market. 6.68% Nevertheless, the growing number of Avg. Bank Lending 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 Apartment Q1 2019 Office property developers and large Retail companies are intensifying their Industrial & Logistics business development activities with Hotel 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 District (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 quarter Alabang 772.63 3.10% of 2019. Quezon 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 FORT BONIFACIO 9.71% in the first quarter of the The Metro Manila office sector year. Makati’s rents grew less than momentum extended to the first Fort Bonifacio displayed a robust 1%. PhP 1,262.23 per square three months of 2019 as office market with a growing meter per month was the weighted demonstrated by sound demand. Although second only to average asking rent of office spaces performance indicators. A generous Makati in terms of weighted in Fort Bonifacio for the period. supply of leasable area increased average lease rate, Fort Bonifacio the documented end of year office stock. In the first quarter of 2019, FIGURE 2 more than 200,000 square meters Upcoming Office Space (in sq.m.) of Gross Leasable Area (GLA) was added to the 2018 total supply. Nevertheless, the overall occupancy rate remained within healthy levels 600,000 of above 95%. The first quarter net 500,000 absorption of 191,871.02 square meters almost equaled the new 400,000 stock introduced in the quarter. 300,000 Moreover, the year-on-year growth 200,000 rate of the weighted average asking rent was noted at a record high of 100,000 10.35%. The average asking lease - rate was pegged at PhP 1,078.81 Makati Taguig Ortigas Bay Area Alabang Quezon per square meter per month. City

An estimated 1.4 million square 2019 2020 2021 meters of new GLA is forecasted to Source: Santos Knight Frank Research enter the market in 2019. Majority or around 74% of the upcoming supply will be in Fort Bonifacio, Ortigas, and Quezon City.

3 Fort Bonifacio’s vacancy rate was Quezon City that boasts several measured at 5.97%. Newly turned- mixed-use developments in various over Asian Century Center added locations within the city. The 26,000 square meters of GLA to the Araneta Group is presently business district’s total supply. revamping the Araneta Center in 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. Filinvest 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 occupiers Araneta Cyberpark 2 Several developments are presently Source: Araneta Group in the pipeline to address the supply to consider options in areas such shortage. More than 410,000 square meters of GLA is expected FIGURE 3 within the next 3 years. Some of the Weighted Average Lease Rate (in PhP) and Year-on-Year Growth upcoming office projects include Rate (in %) Megaworld Corporation’s One Fintech building in Westside City, 2000.00 25.00% which is set to be completed by Q4 2020, and DM Wenceslao and 1500.00 20.00% Associates Inc.’s Aseana 4 for 15.00% 1000.00 turnover in 2021. 10.00% 500.00 ORTIGAS 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 market launch date. The notable new TABLE 2 continued to exhibit strong growth project launches included Novo’s Q1 2019 Residential in the first quarter of 2019. Selling Citrine Residences in Makati and Condominium Sales Market prices rose, absorption rates Federal Land’s Mi Casa – Hawaii Statistics approached 100 percent and fresh Tower in the Bay Area. Half of the inventories were quickly taken-up. inventories from these projects Avg. Units Given the limited residential supply were reportedly sold in less than a Area Monthly Sold (%) in prime locations within city month. The launching of high-end Take-up centers, property buyers rushed to and luxury developments such as purchase newly launched units in Alveo’s The Ametrine at Portico in Makati 96.14% 23.48 these areas. Ortigas and Megaworld Infinite’s The Albany – Yorkshire in Fort Taguig 97.03% 12.26 Although a number of existing Bonifacio were likewise met with projects remained in the market, high demand from residential Quezon City 93.44% 14.92 new projects in Makati, Bay Area, investors. A robust residential Ortigas and Fort Bonifacio already market was evidenced by the Ortigas 95.66% 31.46 sold most of the tallied floated impressive market acceptance of inventory within months from the new projects, despite the higher Alabang 97.25% 17.94 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 subway, are in-place. local sector continues to create wealth for investment in their The announced price increase of country of residence. Filigree’s residential projects in Alabang prompted investors to Backed by further purchases purchase residential units. This pouring in from the PAGCOR- boosted the area’s monthly take-up enabled companies, the Bay Area led the other business districts 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 three Quezon City and Fort Bonifacio 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 of about 31 units and 23 units, Furthermore, the influx of foreign respectively. Makati registered a workers and the migration of people 48% year-on-year (y-o-y) increase from nearby provinces resulted to a in take-up, which is attributed to the rising demand from buyers.

6 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 an The Ametrine at Portico average price of PhP 286,277 per Source: ProperBee.com Source: Federal Land 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 was 350,000 334,821 PhP 161,310 in the same period of 300,000 263,512 240,861

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

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

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

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. CANADA , ,

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 France reportedly spent PhP 1.45 billion, while tourists MM HOSPITALITY DEMAND from Germany 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 a accounted for 26% of the overall notable growing trend in the foreign tourist spending in the country. It enables spending quality Philippines. Moreover, the time with family and friends. Various accommodation services likewise packages and discount promos are MICE-Capable Facilities: World Trade covered a large portion of the total offered to encourage booking hotel Center Manila & SMX Convention Center tourist spending at 23%, stays even without a particular Sources: World Trade Center contributing to the solid growth of SMX Convention Center the hospitality sector. occasion to celebrate. 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 integrated resorts and casinos are 6% Metro Manila hotel supply, bringing QC BGC located in the Bay Area. Majority of 10% 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 Close to 740 hotel rooms were BAY AREA & MAKATI preference of international guests PASAY (OTHERS) 31% launched in Newport City in Pasay. 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 the sector. Poblacion area. 5-star hotel Source: Santos Knight Frank Research accommodations are located in the Metro Manila is set to witness 7,000 city center, within walking distance additional hotel rooms in the next 5 from the regional offices of FIGURE 7 years. Developers such as multinational firms. Inns and 3 to 4- Metro Manila Average Daily Rate Megaworld Corporation, Ayala Land star hotel accommodations are (ADR) Inc. (ALI), Filinvest Land Inc. (FLI), typical in the Poblacion area and and Double Dragon Properties are target backpackers and travelers on looking to increase their hospitality a budget. footprint by setting up strategic Fort Bonifacio, Ortigas, Alabang developments all over Metro Manila. and Quezon City have a combined total of 10,800 rooms under Managed by Prestige Hotels and different star-ratings. Resorts, Megaworld Corporation’s Grand Westside Hotel and AVERAGE DAILY RATE Kingsford Hotel located in Bayshore Hotels in the Bay Area commanded City will add 1,200 hotel rooms to

the highest Average Daily Rate the busting Bay Area in Pasay.

₱12,342.13 ₱12,342.13

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

developments in the area.

₱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, PhP 4,660, PhP 4,300, and PhP Alabang BGC Makati Ortigas Bay Area Source: Santos Knight Frank Research & Pasay 4,100, respectively. (others) In addition, budget-friendly hotels, International brands and major hotel such as Red Planet Hotels and players likewise continue to bolster Hotel 101, already penetrated the their hospitality portfolio in Metro hotel market of Fort Bonifacio. The Manila with the planned addition of entry of Red Planet and Hotel 101 Ascott Meridian Park in the Double in the growing Fort Bonifacio Dragon complex in Bay Area, and increases the number of available Hotel Okura in Megaworld accommodation options within the Corporation’s Westside City and business district. 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 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 “park” evidenced by the continuous and “kalye” (street), will add around 68,000 square meters of leasable development and opening of new 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 is Manila. The demand was mainly scheduled to be completed by the driven by favorable market 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 were of inflation in the first quarter of the Gateway Mall 2 conceptualized taking into account Source: Araneta Group year. consumer lifestyles and changing preferences, mall renovations are NEW AND UPCOMING MALLS continuously being performed to AND EXPANSIONS further promote retail as an experience. in SM City Fairview recently Makati is currently undergoing completed and soft-opened renovation in order to provide a Parkway, the ’s better dining and shopping 32,000-square meter expansion. experience to its numerous mall- Despite the noticeable vacant goers. Renovations of the Food spaces in this particular wing, a Choices and Activity Center started commenced stall operations in number of shops were already open in the first quarter of 2019 and are Eastwood Mall and TriNoma. and selling. Majority of the locators for completion within the year. Another store is set to open in SM City North EDSA by April 2019. were Food & Beverages (F&B) NEW STORES AND BRANDS brands and services such as salon In addition, Xing Fu Tang, another and spa. Several brands have set up shops in various shopping malls and retail Taiwanese milk tea brand opened The Araneta Group is expanding its establishments in order to cater to its first branch in the country at The retail portfolio through the the various demands of foodies and Podium Mall. Two additional stores construction of Gateway Mall 2 in mall-goers. are much awaited in Promenade Araneta Center. The new phase is Mall in Greenhills and Venice Grand Botejyu, best known for its Canal Mall in Taguig. The milk tea slated to be completed by the okonomiyaki and okosoba, recently chain is famous for its brown sugar second half of 2020. It will feature a unveiled its flagship restaurant in 700-square meter activity area, One . In bubble milk tea. upscale interiors, organic vegetable addition to existing branches in Dessert shops have also been Luzon, the Japanese restaurant is garden, European marketplace- consistently present in the retail inspired gourmet food hall, and a set to open branches in other areas within Metro Manila, such as scene. Hongkong-based dessert 500-seater chapel on the top floor. , Ayala North Exchange, brand Hui Lau Shan entered the There will be more food options that Greenhills, and SM City Fairview. Philippine market with the launch of will cater to the growing demand for its first branch in SM Megamall on F&B brands. A total of 126,000 An increasing presence of milk tea March 2019. It has upcoming brands was noted as more and square meters of floor area will be branches in Eastwood Mall, UP available upon completion. more foreign names are introduced to the market. After opening its first Town Center, SM City Fairview, SM D.M. Wenceslao & Associates is set branch in One Bonifacio High Street City North EDSA, SM Mall of Asia, and Promenade Mall. Hui Lau Shan to break ground next quarter its last year, Taiwan-based milk tea brand Tiger Sugar recently uses Philippine carabao mangoes along with other ingredients to create unique desserts. FIGURE 10 Upcoming Retail Supply Per UPCOMING STORE AND BRANDS Retail Category In the first quarter of the year, 299 upcoming brands were noted across Metro Manila.

F&B continued to account for the Food & largest share in the pie of upcoming Others Beverages brands in Metro Manila with a 42% 36.45% 42.14% share. Of the 129 F&B brands, 74 or 59% were restaurants. Other notable categories were Milk Tea Clothing & and Desserts with shares of 10% Apparel each. 21.40%

Clothing and Apparel represented AI Robot “SAM” introduced in SM Megamall 21% of the upcoming stores. The Source: Philippine Star Source: Santos Knight Frank Research category was distributed as follows: apparel (41%), accessories (28%), footwear (23%) and eyewear (8%).

The remaining 36% of the Cashless transactions through upcoming brands were under digital payments are expected to health & wellness, technology, further pick up in 2019. Quick cosmetics, services, and others. Response (QR) codes are being Popeyes Louisiana Kitchen, under used by brick and mortar stores as the Kuya J Group, is a well- a form of offline e-payment. The Merchant accepting payment via GCash QR anticipated fast food restaurant. majority of mobile payment Source: Inquirer The brand was founded in New applications (GCash, PayMaya, Orleans in the 1970s and is now Coins.ph, AliPay, WeChat Pay) are considered as one of the most QR code-capable. Over 50,000 popular fried chicken restaurants in merchants accept payments via QR LEASE RATES AND VACANCIES North America. Its menu features codes from GCash, while 7,300 merchants allow transactions In the first quarter of 2019, lease biscuits with honey, fried shrimp, rates of Metro Manila malls and spicy chicken. Popeyes is set through PayMaya. Moreover, Coins.ph is accepted in select averaged PhP 1,417 per square to open in 9 locations within Metro meter per month. Of all the various Manila (, restaurants and cafés. Furthermore, GrabPay could soon be used in business districts in Metro Manila, Vertis North, Festival Mall, , Bay Area recorded the highest SM City San Lazaro, SM City retail establishments under a partnership with SM Investments lease rate at PhP 1,750 per square Manila, Arcovia City, , meter per month. and Kroma Tower in Makati). Corporation. With the opening of Parkway in SM NOTABLE TRENDS SM Supermalls recently launched its newest artificial intelligent (AI) City Fairview, Quezon City’s Despite the evolution of e- humanoid robot, SAM, in SM vacancy rate rose to 2.21%, commerce and online shopping, the Megamall. The technology can coming from 1.07% in the previous sensory experience that physical provide mall goers with directions, quarter. Fort Bonifacio vacancy was stores offer to consumers remains mall schedules, and tips on sales, lowest of Metro Manila’s business an advantage. To keep up with the promos and events. More SAM districts at 1.02%, or around 3,000 changing preferences of mall-goers robots will be stationed in other SM square meters of leasable space. and to provide convenience and Supermalls nationwide (SM Aura Mall rents in the area averaged PhP better customer service, retailers Premier, SM City North EDSA, SM 1,542 per square meter per month, are now incorporating digital Mall of Asia, and SM Seaside City which is the second highest in innovation into the physical stores. Cebu). Metro Manila. Manila Office MANAGEMENT 10th Floor, Ayala Tower One & Exchange Plaza , Makati City, 1226 Rick Santos t: (632) 752-2580 / 848-7388 Chairman and CEO +63 917 528 3687 f: (632) 752-2571 [email protected] w: www.santos.knightfrank.ph OCCUPIER SERVICES AND COMMERCIAL AGENCY

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