> Market Beat

Philippines

April 8 - 14 | 2014

ECONOMY

Is there a real estate bubble on the horizon?

Business World, 04.08.14

When the prices of homes shoot up (characterized by a period of irrational ex-

uberance accompanied by a buying frenzy from misinformed buyers), this fur-
ther drives the valuations of real property until they reach unsustainable levels,
then they decline. Many economists agree that this is one of the telltale signs of
a real estate bubble. However, what they dont agree on is whether real estate
bubbles can be identified and prevented and if they have broader economic
repercussions are answered differently by schools of economic thought. But
one thing is for sure unlike a real bubble, a real estate bubble can end not with
a pop but with a crash, similar with the one the United States experienced in
2007, which triggered the global financial crisis. Recognizing when a bubble
may occur becomes easier if economists and policy-makers can spot the red
flags in the areas of lending, spending, and employment.

PH tallies $1B in foreign investments

Philippine Daily Inquirer, 04.10.14

Long-Term investments in the Philippines by foreigners rose to over $1 bil-

lion in January, indicating sustained confidence in the countrys economic Polar Center
prospects. The Bangko Sentral ng Pilipinas (BSP) on Thursday reported that
foreign direct investments (FDI) rose by 5.3 percent in January, a turnaround
from the 7.9-percent contraction in the same month last year. This was due
to the continued lending of parent companies abroad to their local affiliates to
fund existing operations and the expansion of their businesses in the country,
an indication of sustained confidence in the countrys strong macroeconomic
fundamentals, the BSP said in a statement. Foreign firms loans to their local
affiliates reached $687 million in the month, up 7.3 percent year-on-year. This
accounted for 67 percent of the total, the BSP said.

FOR LEASE
6,000 square meter total of BPO space
Supported by 24/7 retail establishments and malls
surrounding the project SM Megamall, Shangri-La
Plaza and Starmall)
Located along Epifanio Delos Santos Avenue (EDSA)
Very accessible via various transport systems. MRT and
bus station just meters away from the building
With available spaces for recruitment for major tenants
RFO 3Q2014
INVESTMENT Robinsons Cyberscape
Sta Lucia to buy lots in four provinces Beta
The Philippine Star, 04.10.14

Real estate developer Sta. Lucia Land Inc. (SLLI) of the Robles family is ac-
quiring almost P90 million worth of lots in four provinces as part of its efforts
to take advantage of the property boom. Specifically, it will expand current
projects by purchasing 24,578 square meters (sqm.) of lot worth P7.37 billion
in Sun City Davao; 51,500 sqm. lot worth P51.5 million in Golden Meadows
Sta. Rosa, Laguna; 32,213 sqm. property worth P22.61 million in Greenwoods
South Batangas; and 9,421 sqm. lot worth P5.62 million in Lipa Royale Batan-
gas. Under the proposed joint venture, PRCI would contribute several parcels
of land that will be developed by SLLI into a residential subdivision. The land
with an area of 537,011 sqm. is located in Cebu. SLLI said it has also approved
plans to enter into joint ventures, including the development of phase 2 of the
Rizal Techno Park, Taytay; new projects in Puerto Princesa, Palawan, Davao
and Cebu.

ALI to build P2.5-B Seda Hotel in QC FOR LEASE

The Philippine Star, 04.10.14 Typical Floor - 1,480.66 sqm
Expected completion: March 2014
Property giant Ayala Land Inc. (ALI) is boosting its hotel portfolio in Metro Ma- Various transport systems available 24/7
nila with a P2.5-billion Seda Hotel, its largest thus far. The new development
will cater to the underserved market in Quezon City while contributing to ALIs Recruitment space and food options at the
goal of hitting 4,000 hotel rooms by 2016, an official said. Were planning a ground and mezzanine floors
Seda Hotel in Quezon City. We think that is an unserved market, said Jose Access from two streets (along Topaz and
Emmanuel H. Jalandoni, Vice-President and Group Head of Ayala Hotels and
Resorts. Its a large format with around 438 rooms, Jalandoni said, adding
Ruby Roads)
that the hotel will also feature a ballroom, a Chinese restaurant and all-day din-
ing options. With 438 standard rooms and suites, Seda Vertis North will be the
largest Seda Hotel when it opens in 2016. Its target market includes discerning
business and leisure travellers.
One Felicity Center
Megaworld profit up 22% in 2013

Philippine Daily Inquirer, 04.10.14

Property developer Megaworld Corp. grew its net profit last year by 22 percent
to P9.03 billion on strong earnings from its residential development and leasing
portfolio. The 2013 profit figure included an estimated P760 million in nonre-
curring gains from the consolidation of a company acquired by Megaworld at
a cost below the units book value. The subsidiary is a holding company for a
tract of land on C5 where Megaworld will put up another township. The coun-
trys strong and stable economy, as well as the continuous growth of the BPO FOR LEASE
(business process outsourcing) sector, have propelled our growth in 2013. Last 21,000 square meter total leasable space
year was another banner year for Megaworld, said Andrew Tan, Megaworld 14 floors of office space
chair and Chief Executive Officer. Total revenues of Megaworld, together with With food options and retail establishments at ground
subsidiaries Empire East Land Holdings and Suntrust Properties, amounted to and second floor
P36.24 billion in 2013 up by 18 percent from that of the previous year. Town- Along Commonwealth Avenue, proximate to malls,
ships Newport City, Uptown Bonifacio, McKinley Hill and Eastwood City were universities and transportation hubs
the key revenue drivers in 2013.

P. 2 | COLLIERS INTERNATIONAL
Century Properties forms tourism unit

The Philippine Star, 04.13.14

Century Properties Group Inc. has created a new unit to jumpstart its foray into the hotel and tourism sector. In a regulatory filing, the listed
property firm of the Antonio family said its board of directors approved the incorporation of Century Properties Hotel and Leisure Inc. Century
Properties co-chief operating officer Jose Marco Antonio said the real estate firm would collaborate with foreign brands as it introduces hotels
and serviced apartments. It will launch one hotel project this year. An eight-hectare property in Pampanga will be developed into a mixed-use
project with a residential segment for the middle income market, a hotel, some office buildings and a lifestyle retail concept to the tune of P20
billion. The government is projecting that 7,000 new hotel rooms are needed this year given the record-breaking 37.5 million domestic trips
in 2012. The Department of Tourism earlier estimated that more than 20,000 new rooms must be built by 2016 to serve the growing tourism
market.

RESIDENTIAL

New Community Rises in Pampanga

Manila Bulletin, 04.08.14

Amaia, Ayala Lands economic housing arm, opens a new address in Pampanga. Launched last February, Amaia Scapes Pampanga is the new-
est residential development of the developer. It occupies 19.3 hectares of land area and built to suit the familys needs of a balanced lifestyle.
Amaia Scapes Pampanga has 1,400 house and lot units. Makati Development Corporation Build Plus (MDC) and Ayala Property Management
Corporation (APMC) maintain the community. Located along Angeles-Magalang Road, Brgy. Sapang Maisac, Mexico, Pampanga, it is near
commercial establishments like Marquee Mall and Robinsons Angeles, educational institutions such as Angeles University Foundation and Holy
Angel University and government offices like the Angeles City Hall and Mexico Municipal Hall.

Cebuanos welcome Rockwell

Philippine Daily Inquirer, 04.09.14

Now that Rockwell has unveiled its high-end residential property in Cebu, it should be interesting to see if the affluent but very cost-conscious
Cebuano is finally ready to embrace condo living stylish but condo space nonetheless. One of the impressive things about Cebu and there are
so many are the lovely, spacious homes high up on the mountain slopes of the gated communities such as Maria Luisa and Beverley Hills.
Not only are the gardens vast and lovely, they also give a breathtaking view of the cityscape. Indeed, the hardworking elite of Cebu is used to
big space and high-up-there gardens. And yet theres been a condo-building frenzy the past six years, and apparently the market has been
receptive. 32 Sanson is a low-density development consisting of five clusters of five-story buildings. About 70 percent of the 3.2-ha space
will be landscaped garden, so the community will not be congested, in keeping with the signature Rockwell style of development. There will
be over 300 unitsconsisting of one (64-56 sq m), two (93-94 sq m) and three (144 sq m) bedrooms, going for more than P100,000 per
square meter.

Roxaco Land upbeat on Anya project

The Philippine Star, 04.14.14

Roxaco Land Corp. (Roxaco Land) has expressed optimism for its Anya Resort and Residences (Anya) project amidst robust real estate in-
dustry forecast. Anya is Roxaco Lands upscale high-yielding real estate investment project in Tagaytay City that combines a luxury residential
condominium with a boutique hotel experience and a health and wellness resort element. Santiago R. Elizalde, Roxaco Land Senior Vice
President, said, We are energized by the strong forecast and global interest on the Philippine real estate industry. It validates the direction
we have taken with our ventures, particularly with Anya that is envisioned to drive the luxury and leisure real estate investments sector.
Roxaco Land, the property development arm of Roxas and Company Inc., has been firming up plans for Anyas launch in the second quarter of
2014. Market trends are also very reassuring for the luxury residential condominium sector, where Anya is poised to be a major player. Anyas
uniqueness as an investment allows for high-yield earning and high-end living for its investors. And this is what makes Anya the investment
of choice, all things considered, Elizalde said.

P. 3 | COLLIERS INTERNATIONAL
IT/BPO

Accent matters: Philippines acquiring 70% of India call centers

The Philippine Star, 04.07.14

Most voice and call center businesses in India are transferring to the Philippines due to Filipino workers more neutral English accent, among
other reasons, an Indian business group said. The Associated Chambers of Commerce and Industry of India (Assocham) said that India is
losing 70 percent of all incremental domestic business process outsourcing (BPO) businesses, particularly call centers, estimated to be worth
$30 billion in foreign exchange earnings. Citing Assochams study, D.S. Rawat said that the Philippines has an advantage over India due to its
large pool of well-educated, English-speaking, talented and employable graduates. Rawat said that only 10 percent of graduates in India are
qualified to work in call centers and training could take a considerable amount of time. About 30 percent of graduates in the Philippines, on
the other hand, are employable. Cultural proximity to the US together with availability of talented manpower are key reasons as to why BPO
companies prefer expanding their operations in Philippines, he added.

No signs of slowing down for IT-BPO sector -- DTSI Group

The Philippine Star, 04.14.14

Locally-bred business enabler Diversified Technology Solutions, International Inc. (DTSI Group) sees no signs of slowing down for the Philip-
pine business process outsourcing (BPO) sector as global companies continue to express interest in considering the country as their out-
sourcing hub. Miguel Antonio C. Garcia, president and CEO of the DTSI Group, said this optimism is based on his meetings with top officials
of several companies and industry organizations at the 2014 International Outsourcing World Summit (OWS) held in Florida, USA from Feb.
17 to 19. Organized annually by the International Association of Outsourcing Professionals (IAOP), the Summit attracts about 1,000 attendees
from over 40 countries. Im happy to report that the outlook is very positive given the responses I received from those that I had discussions
with. More and more multinationals and other enterprises in the US have been seriously considering the Philippines as their outsourcing
hub, Garcia said.

Ayala goes into education with UK partner

The Philippine Star, 04.14.14

Conglomerate Ayala Corp. (AC), in partnership with the worlds leading learning company, is putting up 12 low-cost private schools nation-
wide. The $4-million investment for new schools jumpstarts ACs bid to become the largest educator catering to the service sector, an Execu-
tive said. Our emphasis this year is starting to apply lessons learned from the business process outsourcing (BPO) sector to the education
sector, said Fred I. Ayala, CEO of Liveit Investments Ltd. Our goal is to become one of largest educators in the country specifically catering
to the service sector like information technology-BPO, Ayala said. The local IT-BPO sector employed 900,000 workers last year, posting a
20-percent growth from a year ago. It is expected to employ 1.3 million Filipinos this year. Ayala said that amid the big demand for Filipino
talent for the IT-BPO sector, Affordable Private Education Centres (APEC) will improve the students employability through low-cost but qual-
ity education.

INDUSTRIAL

Foreign firms seen relocating to Phl

The Philippine Star, 04.13.14

Several foreign manufacturing companies operating in China and in Southeast Asian countries are eyeing to relocate to the Philippines cit-
ing the available high-quality labor here, the Foreign Buyers Association of the Philippines (FOBAP) said. In a statement from the Philippine
Exporters Confederation Inc., FOBAP president Robert Young said two French investors are coming to Manila by the end of the month, while a
number of Canadian, Chinese and American companies are visiting the country in mid-May to scout for investment opportunities. Young said
these are mid-sized manufacturers of garments, apparel, shoes, toys and housewares looking to invest around $500 million and employ 1,000
to 3,000 workers. These people are financially capable, they are ready, they mean business, they are serious. We are lucky if we get at least
10 initially from all parts of China and other ASEAN (Association of Southeast Asian Nations) countries, he said.

P. 4 | COLLIERS INTERNATIONAL
HOTEL AND LEISURE

500,000 visitors from Japan expected

Manila Bulletin, 04.02.14

Inflow of Japanese tourists into the Philippines could reach 500,000 this year from over 400,000 in 2013 even as more Filipino workers are
finding their way into Japans labor market changing Philippines presence from the entertainer-type of labor to the more skilled engineers, IT
workers and English teachers. Philippine Tourism Attache to Japan Valentino L. Cabansag said that the resumption of PALs Manila-Haneda
flights last March 30 is going to beef up more exchanges between the two countries. There were a total of 209,000 Filipinos in Japan as of
2012 mostly permanent residents by virtue of their marriage to Japanese nationals. But the mix has been changing from the entertainer era
to the more skilled Filipinos.

San Vicente beaches hidden but not for long

Philippine Daily Inquirer, 04.03.14

Imagine trekking along 14 kilometers of unspoiled powdery white sand with nothing but the vast expanse of the West Philippine Sea and end-
less rows of lush forests and old coconut trees on both sides. 2-km-runway airport nearby is due for completion this year and promises to
dramatically boost tourist traffic. The cementing of the access road from the capital of Puerto Princesa City, or what used to be a decrepit
logging road through old growth forest is just about finished and will effortlessly link the place to the urban hub. There is no doubt that Long
Beach is destined to become a world-class tourist destination. With its 14.7-km-long pristine stretch of beach, it is one of the longest, if not
the longest, white-sand beach in the Philippines, San Vicente Mayor Pie Alvarez told the Philippine Daily Inquirer.

ALI breaks ground on El Nido resort township

Manila Bulletin, 04.05.14

Ayala Land Inc. (ALI), through subsidiary the Ten Knots Group, has broken ground for its 100 hectare resort community project Lio, its latest
tourism development in El Nido, Palawan. Lio is master-planned as an ecologically-sustainable tourism destination and will be home to ho-
tels and resorts, tourism and commercial establishments and residential communities with world-class amenities that blend with the natural
landscape. This ceremony marks another milestone for Ayala Land as we expand our investment and development in tourism. Lio is Ayala
Lands first venture into tourism estate development and is the first master-planned eco-tourism estate in the Philippines, said ALI President
Antonino T. Aquino. He noted that unlike other tourism destinations in the country, the entire property is planned, constructed and managed
by one developer with sustainability in mind. Aquino said the first phase of the Lio resort town development consists of 25 hectares, which
shall include a unique township experience comprised of bed and breakfasts, resorts, shops and dining establishments amidst civic spaces.

INFRASTRUCTURE

Phl gets Category 1 aviation safety upgrade

The Philippine Star, 04.11.14

Six years after being barred from expanding services in the United States due to safety concerns, Philippine carriers are now allowed more
flights to US destinations after the Federal Aviation Administration (FAA) restored the Category 1 status of the local commercial aviation
industry. Ambassador Philip Goldberg made the announcement yesterday on his Twitter account @AMBGoldberg. Good News! Philippines
compliance with international #aviation safety oversight standards earn Category 1 Safety Rating, Goldberg tweeted. We congratulate the
CAAP for a job well done in ensuring the lifting of the ICAOs significant safety concerns, the lifting of the European ban on local airlines, and
now, the FAA upgrade to Category 1, the DOTC chief said. There are no more restrictions, Andrews said in a television interview. We are
now world-class as far as the aviation industry is concerned.

P. 5 | COLLIERS INTERNATIONAL
GENERAL PROPERTY

More Davao land now in commercial use: study

Business World, 04.08.14

A study under the citys Comprehensive Land Use Plan shows that land used for commercial purposes has increased three times over a 16-
year period, or from 520.03 hectares in 1994 to 1,583.32 hectares in 2010. However, the same land use plan, which was approved only in
February this year by the Housing and Land Use Regulatory Board, shows that Davao is still pretty much an agricultural area, with 46%, or
111,387.49 hectares, of the citys 244,000-hectare total land area classified as such. Lawrence D. Bantiding, Business Bureau Chief said that,
as of 2013, there were 21,457 business establishments in the city, with a capitalization of P187 billion and providing employment to 142,000
people. He said the bulk of these businesses or 21,000 are small and medium enterprises, providing employment to 96,000 people.

BCDA unveils P1.3B Poro Point plan

Philippine Daily Inquirer, 04.10.14

The Bases Conversion Development Authority (BCDA) has unveiled a P1.3-billion comprehensive development plan to make Poro Point in La
Union a tourist magnet. BCDA chair Rolando Gosiengfiao said in a statement the state agency had engaged Palafox Associates to execute
the design. We anchored the (plan) on young Filipinos, local tourism, and trading and light industry, Gosiengfiao said. In line with that, the
developmental blueprint plots Poro Point into (separate) dedicated districts for business, commercial, and residential. The intention is to build
restaurants, commercial centers, business centers, schools and multi-use areas that are connected by a strategically located transit hub. One
phase of the plan is focused on the development of the 14-hectare area of the Poro Point Lighthouse while another phase covers the existing
70-hectare industrial area of the former military base.

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