Real Estate
Estate
Real
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
Retail
Sector
4,500,000
1,600
4,000,000
1,400
3,500,000
3,000,000
1,000
2,500,000
800
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)
Rent in Php/sqm/month
Area in Square Meters
1,200
Market Overview
Residential
Condominium Sector
35,000
600
Rents peaked in 2008, now
softening due to additional supply
30,000
500
No. of Units
400
Lowest vacancy rate of 1%
20,000
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
Rent in Php/sqm/month
25,000
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, Pacific
Plaza Towers, 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
500,000 square meters
1,000
900
6,000,000
Lowest vacancy rate of 4%,
or 193,000 square meters
Highest vacancy of 1.5 million
square meters
800
Area in Square Meters
700
600
4,000,000
500
Rent in Php/sqm/month
5,000,000
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
2010
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
Leased / Pre-Committed
375,000
350,000
Supply Reduction
Total of 1,707,244 sqm supply from 2008 - 2014
Reduced by 341,867 sqm or 17%
325,000
300,000
Supply
Oversupply Period
275,000
250,000
225,000
Dramatic drop in supply may result
in rapid rise in rents.
200,000
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
2008
2008
2009
2009
2010
2010
2011
2011
593,086
593,086 sqm.
sqm.
575,009
575,009 sqm.
sqm.
176,770
176,770 sqm.
sqm.
213,380
213,380 sqm.
sqm.
4Q
2012
2014
Average Demand
Market Overview
Office - Supply vs Leased / Pre-Committed Space (2008 - 2009)
Total
TotalSupply:
Supply:593,086
593,086sqm
sqm
Leased:
77.97%
Leased: 77.97%
2008
2009
00
00
1 5 0 ,0
Others
1 2 5 ,0
Others
00
Bay City
1 0 0 ,0
Bay City
0
Northgate Cyberzone
7 5 ,0 0
Northgate Cyberzone
0
Pioneer Complex
5 0 ,0 0
Pioneer Complex
0
Eastwood City
0
Eastwood City
0
McKinley Hill
150,0
0
McKinley Hill
0
Quezon City
125,0
0
Quezon City
0
Ortigas
100,0
0
Ortigas
75,00
0
Fort Bonifacio
50,00
0
Fort Bonifacio
25,00
0
Makati
0
Makati
2 5 ,0 0
Total
TotalSupply:
Supply:575,009
575,009sqm
sqm
Leased/Pre-Committed:
41.09%
Leased/Pre-Committed: 41.09%
Market Overview
Office - Supply vs Pre-Committed Space (2010 – 2011)
Others
Others
2010
00
Bay City
150, 0
Bay City
00
Northgate Cyberzone
125, 0
Northgate Cyberzone
00
Pioneer Complex
100, 0
Pioneer Complex
0
Eastwood
75, 00
Eastwood
0
McKinley Hill
50, 00
McKinley Hill
0
Quezon City
150,0
00
Quezon City
125,0
00
Ortigas
100,0
00
Ortigas
75,00
0
Fort Bonifacio
50,00
0
Fort Bonifacio
25,00
0
Makati
0
Makati
0
Total
TotalSupply:
Supply:213,380
213,380sqm
sqm
Pre-Committed:
0%
Pre-Committed: 0%
25, 00
Total
TotalSupply:
Supply:176,770
176,770sqm
sqm
Pre-Committed:
13.69%
Pre-Committed: 13.69%
2011
BPO Industry Overview
Number of Seats
LUZON
209,060 Seats
VISAYAS
29,284 Seats
Total Number of BPO Seats: 240,714
Metro Manila – 188,425
(78%)
% of Total No. of BPO 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
Total Number of Seats in
Metro Manila: 188,425
Las Piñas
Marikina
Bay City
Alabang
Northgate Cyberzone
McKinley
Fort Bonifacio
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
Total Number of Seats Outside
Metro Manila: 52,287
Cagayan De Oro
Leyte
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
Interest Rates
Rapid climb in interest rates plus
appreciation of the US Dollar forced loan
defaults, bankruptcies and unfinished
buildings
Falling rates forcing mobilization of capital
into real estate investments; credit still freeflowing
Supply
2.3 million square meters of Prime, Grade
A and B stock, 60% of which is in Makati,
and 40% in Ortigas
1.4 million square meters of largely Grade
B stock, spread across Metro Manila
Severe contraction as companies closed
BPO industry growing in the Philippines as
a result of cost-cutting measures of
multinational companies
Long "U" shape recovery after 5 years
"V" shape recovery after 18 months to 2
years
Demand
Rents
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
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 7,000 sqm
46,000
Relocation / Expansion
TOTAL
195,000
BPO
• 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
Source: BPAP, DOT
Call Center Seats
2000
2001
2002
2003
2004
2005
2006
2007
2008
3,500,000
3,000,000
2,500,000
2,000,000
1,500,000
Tourist Arrivals
1,000,000
500,000
0
16
Country Risk, Visitor Arrival and Call Center Seat Growth
160,000
140,000
120,000
100,000
80,000
60,000
40,000
20,000
0
Call Center Seats
Tourist Arrivals
1997 Asian Financial Crisis
2000
Tech Bubble / US Stock Market Crash
ERAP Impeachment
Glorietta Mall Bombing
SM Megamall Cinema Restroom Bombing
Synchronized Bombing in Metro Manila
2001
Philippine General Elections
Dos Palmas Kidnapping
911
EDSA Dos
EDSA 3
Gracia and Martin Burnham Kidnapping
2002
Zamboanga Bombing
Captured Jemaah Islamiyah
Sentenced Jemaah Islamiyah
2003
SARS Outbreak
Davao Airport Bombing
Jemaah Islamiyah escape
Jose Pidal Plunder Case
Oakwood Mutiny
"In The Presence of my Enemies"
2004
Philippine General Elections
Infanta Mud Slide
SuperFerry Bombing
General Santos Christmas Bombing
2005
Davao Bus Terminal
General Santos City Mall Bombing
Hello "Garci" Scandal
"To Fly Again"
Valentine's Day Bombing
V-Day Bombing Masterminds Death Sentence
2006
State of Emergency Declaration
Milenyo
Southern Leyte Mud Slide
2007
Cotabato Bus Station Bombing
ERAP Conviction
ZTE Scandal
Glorietta 2 Bombing
Congress Bombing
Manila Peninsula Incident
2008
Cotabato City Bombing
ZTE-NBN Irregularities
US Financial Crisis
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
Call Center Seats
NASDAQ
Dow Jones
NASDAQ, Dow Jones and Call Center Seat Growth
160,000
140,000
120,000
100,000
80,000
60,000
40,000
20,000
0
Source: BPAP, Google Finance
1997 Asian Financial Crisis
2000
Tech Bubble / US Stock Market Crash
ERAP Impeachment
Glorietta Mall Bombing
SM Megamall Cinema Restroom Bombing
Synchronized Bombing in Metro Manila
2001
Philippine General Elections
Dos Palmas Kidnapping
911
EDSA Dos
EDSA 3
Gracia and Martin Burnham Kidnapping
2002
Zamboanga Bombing
Captured Jemaah Islamiyah
Sentenced Jemaah Islamiyah
2003
SARS Outbreak
Davao Airport Bombing
Jemaah Islamiyah escape
Jose Pidal Plunder Case
Oakwood Mutiny
"In The Presence of my Enemies"
2004
Philippine General Elections
Infanta Mud Slide
SuperFerry Bombing
General Santos Christmas Bombing
2005
Davao Bus Terminal
General Santos City Mall Bombing
Hello "Garci" Scandal
"To Fly Again"
Valentine's Day Bombing
V-Day Bombing Masterminds Death Sentence
2006
State of Emergency Declaration
Milenyo
Southern Leyte Mud Slide
2007
Cotabato Bus Station Bombing
ERAP Conviction
ZTE Scandal
Glorietta 2 Bombing
Congress Bombing
Manila Peninsula Incident
2008
Cotabato City Bombing
ZTE-NBN Irregularities
US Financial Crisis
Call Center Seats
17
Tourism
Tourism 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% of 1% (USD 5 billion in tourist receipts), or
32% of 1% (3.2 million tourist arrivals in 2008)
• 80% of international travel takes place within the same region
• Top international tourism spenders
Country
1.
2.
3.
4.
Germany
United States
United Kingdom
France
5. China
Source: WTO
6. Italy
Expenditure
(USD billion)
91.0
79.7
68.5
43.1
36.2
Country
7.
Japan
8.
9.
10.
Canada
Russian Federation
Netherlands
11. South Korea
Expenditure
(USD billion)
27.9
26.9
24.9
21.7
20.9
30.8
19
Philippine Tourism Overview
Asia and the Pacific - Philippines
• Total international tourist
arrivals: 922 million
• Of the 922 million arrivals, 184.1
million were in Asia and the
Pacific
Source: WTO, HKTC
2008 Tourist Arrivals
(in '000)
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
China
Hong Kong
Malaysia
Thailand
Macau
Japan
Singapore
Korea
Indonesia
Australia
India
Vietnam
Taiwan
Philippines
New Zealand
Cambodia
Laos
Guam
Pakistan
Maldives
Fiji
Nepal
Sri Lanka
53,049
29,506
22,052
14,584
10,605
8,351
7,778
6,891
6,234
5,586
5,367
4,236
3,845
3,139
2,459
2,001
1,295
1,142
823
683
585
500
438
20
Philippine Tourism Overview
Top 15 Tourist Destinations in the Philippines
Camarines Sur
Cebu
Boracay
Baguio
Davao
Puerto Galera
Bohol
Bacolod
Dumaguete
Ilocos Norte
Masbate
Camarines Norte
Puerto Princesa
Legaspi
Catanduanes
Source: DOT
2009 Rank
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
2008 Rank
6
1
3
2
5
7
8
4
9
10
11
15
14
13
16
Philippine Tourism Overview
Tourist
Arrivals and Tourist Receipts
3,500,000
6,000
3,000,000
5,000
Tourist Arrivals
4,000
2,000,000
3,000
1,500,000
2,000
1,000,000
1,000
500,000
0
0
1999
Source: WTO
2000
2001
2002
2003
Arrivals to Phils.
2004
2005
Receipts (in $M)
2006
2007
2008
Tourist Receipts (in USD millions)
2,500,000
1999
2000
2001
2002
2003
Philippine Tourism Overview
3,500,000
3,000,000
2,500,000
2,000,000
1,500,000
1,000,000
500,000
0
2004
2005
Receipts (in $M)
2006
2007
2008
6,000
5,000
4,000
3,000
2,000
1,000
0
Tourist Receipts (in USD millions)
Arrivals to Phils.
Tourist Arrivals and Tourist Receipts
Source: WTO
1997 Asian Financial Crisis
2000
Tech Bubble / US Stock Market Crash
ERAP Impeachment
Glorietta Mall Bombing
SM Megamall Cinema Restroom Bombing
Synchronized Bombing in Metro Manila
2001
Philippine General Elections
Dos Palmas Kidnapping
911
EDSA Dos
EDSA 3
Gracia and Martin Burnham Kidnapping
2002
Zamboanga Bombing
Captured Jemaah Islamiyah
Sentenced Jemaah Islamiyah
2003
SARS Outbreak
Davao Airport Bombing
Jemaah Islamiyah escape
Jose Pidal Plunder Case
Oakwood Mutiny
"In The Presence of my Enemies"
2004
Philippine General Elections
Infanta Mud Slide
SuperFerry Bombing
General Santos Christmas Bombing
2005
Davao Bus Terminal
General Santos City Mall Bombing
Hello "Garci" Scandal
"To Fly Again"
Valentine's Day Bombing
V-Day Bombing Masterminds Death
Sentence
2006
State of Emergency Declaration
Milenyo
Southern Leyte Mud Slide
2007
Cotabato Bus Station Bombing
ERAP Conviction
ZTE Scandal
Glorietta 2 Bombing
Congress Bombing
Manila Peninsula Incident
2008
Cotabato City Bombing
ZTE-NBN Irregularities
US Financial Crisis
Tourist Arrivals
Tourism Arrivals in the Philippines
By Country of Residence
700,000
South Korea
United States
Japan
China
Australia
Taiwan
600,000
Tourist Arrivals
500,000
400,000
300,000
200,000
100,000
Source: DOT
0
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
24
Philippine Tourism Overview
Thailand and Philippines
Population
Tourist Arrivals
Tourism Receipts
% of GDP
Top 5 Tourists
Thailand
Philippines
67 million
14.54 million
USD 16 billion
6.50%
Malaysia
Japan
Korea
China
United Kingdom
90 million
3.4 million
USD 5 billion
6.20%
Korea
USA
Japan
China
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
Increased DOT
marketing efforts—
14-day special Visa
for Chinese tourists
(171.5% increase in
Chinese tourists)
Tourist Arrivals
200,000
150,000
100,000
50,000
0
1990
Source: DOT
1991
1992
1993
1994
1995
1996
1997
1998
China
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
Taiwan
26
China’s Top Tourist Destinations
18,000,000
16,000,000
14,000,000
Tourist Arrivals
12,000,000
10,000,000
8,000,000
6,000,000
In 2007, 157,601 tourists from
China came to the Philippines
4,000,000
2,000,000
0
2001
Source: WTO
2002
2003
Hong Kong
2004
Macau
Thailand
2005
Vietnam
2006
2007
Singapore
27
Total Hotel Supply and Occupancy in Metro Manila
16,000
80
40% increase in hotel room supply in the last
15 years, or 2.6% per annum on average
14,000
10,000
Expansion
of Makati
Shangri-La
and Westin
Philippine Bellevue
Plaza
Manila
Pan Pacific
Manila
Some major
hotels
closed down
Manila
Diamond
Hotel and
Makati
Shangri-La
70
60
50
8,000
40
6,000
30
4,000
20
2,000
10
0
Source: DOT
Occupancy Rate
No. of Hotel Rooms
12,000
Crowne
Plaza
Manila
0
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
Future Hotel Supply in Metro Manila:
2,674 hotel rooms across 8 hotels
1,200
No. of Hotel Rooms
1,000
Shangri-La
(Fort
Bonifacio)
800
600
400
200
Maxims
Hotel
(Newport
City)
Picasso
Serviced
Residences
(Makati)
Manila
Ocean Park
(Manila)
Marriott
Hotel
(Newport
City)
The Eastwood
Park Hotel
(Eastwood)
Raffles
Residences
and
Fairmont
Hotel
(Makati)
Grand Hyatt
(Fort
Bonifacio)
0
Source: DOT
2009
2010
2011
2013
29
Hotel Supply in Provincial Areas By Year-End 2009
1,000
900
Future Hotel Supply in Provincial Areas:
1,539 hotel rooms across 9 hotels
Grand
Water
800
Seven
Stones
No. of Hotel Rooms
700
600
Boracay
Regency
Lagoon
500
Phoenex
Hotel
400
300
Crowne
Regency
Expansion
Radisson
Hotel
200
100
Summer
Ridge
Discovery
Bay Misibis
Microtel
Albay
Puerto Prinsesa
0
Source: DOT
Boracay
Cebu
Tagaytay
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
industry
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
Admired Companies (2009)
Best Overall Global Advisor
and Consultant (2009)
The Global Outsourcing
100 List (2009)
CRO’s “100 Best
Corporate Citizens (2009)
World’s Most Ethical
Companies (2008, 2009)
Sustainable Cities Awards
(2008)
P&G’s External Business
Partner of the Year
Forbes 400 List of Best
Big Companies (2008)
Asia MS 100 List
(2008)
Thank you!
Copyright © Jones Lang LaSalle IP, Inc. 2008