Real Estate Market Report 1st qtr 2011
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Transcript of Real Estate Market Report 1st qtr 2011
![Page 1: Real Estate Market Report 1st qtr 2011](https://reader038.fdocuments.in/reader038/viewer/2022110306/554e06c3b4c90518298b4dd4/html5/thumbnails/1.jpg)
pHILIppINE REAL ESTATEMARKET REpORT
Colliers international | the knowledge
www.colliers.com
Executive Summary eConoMY: VUlneraBle to gloBal Conditions Despite the recent tragedy in Japan and the political unrest in the Middle East, the philippine government is still optimistic in achieving a GDp growth of 7% - 8% for 2011. Inflation has also started to accelerate, with March at 4.3%, a nine-month high. The ADB recently upgraded its forecast for the philippines to reach 5% at the end of the year.
Land values are still inching up, albeit at a slower pace than the last quarter of 2010. With the current planned developments in the traditional business districts, land values are expected to grow at an average of 3% - 5% for 2011.
For the full year of 2010, the HLURB issued more than 324,000 licenses, lower than in 2009 by more than 100,000 licenses issued. Leading the pack, high-rise residential licenses continued to rise, accounting for 17% of all licenses issued. The low cost segment, where the majority of the backlog for housing is coming from, increased by only 6%.
oFFiCe: BPos shiFting to non-CBds; loCation still transit-orientedBonifacio Global City increased its office stock by 30,000 sq m, with three office buildings completed in the First Quarter. Other areas with new supply are Alabang, Eastwood City, pasay City and Quezon City.
Rents in the Makati CBD continued to climb by 1.2% for premium buildings, to p820 per sq m, and 2.4% for Grade A buildings, averaging p680 per sq m.
With a high take-up of about 40,000 sq m, the vacancy rates in the Makati CBD decreased further, to 3.8% from the previous quarter’s 5.4%. The Outsourcing & Off-shoring industry is still the major driver in occupying space across all submarkets tracked by Colliers, although Makati is still the preferred address of traditional offices.
residential: sUrge oF sMaller Units driVes oCCUPanCies low For the First Quarter, Bonifacio Global City has about 500 units recently completed and about 2,500 more in the pipeline, more than 30% of the total inventory expected for 2011. For the Luxury segment, the market is awaiting the anticipated Raffles Residences in Makati, which is set to be complete by year-end.
Vacancies in the Makati CBD and Bonifacio Global City continually widens at the 9% level for the First Quarter, compared to 6% in the previous Quarter. In the other major CBDs, vacancies remain stable at the 3% to 4% level.
In Makati, Ortigas, and Rockwell considered as prime locations, and with an availability of Luxury Three Bedroom units, average rents continue to rise and, although there will be no new supply coming in the medium term, long-term prices are still expected to rise, due to the limited supply for expatriate requirements.
Market indiCators
oFFiCe
residential
retail —
Q1 2011 | QUARTERlY UPDATE
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retail: geograPhiC eXPansion to taP ProVinCial Markets Retail continues to grow, with new expansion plans of mall developers gearing towards the provinces. The current trend in Metro Manila are the redevelopment or small-scale expansion of existing malls, there are also new community malls that are seen as a support component for the BpO offices and the residential community.
Vacancies across the super-regional and regional malls continue to be at an all-time low, with occupancy rates at the 99% level, thus pushing rental rates to p1,180 per sq m in the Makati CBD.
Source: National Statistical Coordination Board
ECONOMIC INDICATORS2005 2006 2007 2008 2009 1Q 2009 1Q 2010 2Q 2010 3Q 2010 4Q 2010
Gross National product 5.06% 6.10% 7.80% 6.20% 3.00% 4.00% 9.50% 7.90% 7.50% 6.70%
Gross Domestic product 5.00% 5.40% 7.30% 3.80% 0.90% 1.10% 7.30% 7.90% 6.50% 7.10%
personal Consumption Expenditure 4.90% 5.50% 6.00% 4.70% 3.80% 4.10% 5.90% 4.90% 4.20% 7.60%
Government Expenditure 4.00% 6.10% 10.00% 3.20% 8.50% 10.90% 18.50% 5.60% -6.10% -7.60%
Investments -6.00% 2.70% 9.30% 1.70% -9.90% -5.70% 24.30% 11.00% 15.60% 22.80%
Exports 4.20% 11.20% 3.10% -1.90% -14.20% -13.40% 17.90% 27.40% 28.00% 21.10%
Imports 2.40% 1.90% -5.40% 2.40% -5.80% -1.90% 20.30% 23.90% 16.00% 21.80%
Agriculture 1.80% 3.80% 5.10% 3.20% 0.10% 0.00% -2.50% -3.00% -2.50% 7.10%
Industry 4.90% 4.50% 6.60% 5.00% -2.00% -0.90% 15.70% 15.80% 9.20% 11.40%
Services 6.40% 6.70% 8.70% 3.30% 3.20% 2.80% 6.10% 6.40% 7.70% 9.70%
Inflation (full-year) 7.66% 6.20% 2.80% 9.30% 3.20% 6.40% 4.40% 3.90% 3.80% 3.80%
Budget Deficit (Billion pesos) p146.8 p62.2 p12.4% p68.1 p270 p112 p132 p62 p63 p54
p: US$ (Average) p55.0 p51.3 p46.1 p44.7 p47.6 p48.4 p45.2 p45.3 p45.9 p43.7
Average 91-Day T-Bill Rates 6.40% 5.30% 3.40% 5.20% 4.00% 4.41% 4.30% 3.90% 4.00% 2.60%
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OFW Remittances
Source: Bangko Sentral ng Pilipinas* As of February 2011
eConoMYAmidst the political unrest in the Middle East and the recent economic curb in Japan, the philippine government remains optimistic in achieving a 7%-8% growth in the economy. The external global crisis displacing thousands of OFW’s suggested remittances would slow down; however, they increased by 6.8% in February to $2.98B, brought about by the strong demand of Filipino workers abroad. BSp is now reviewing its projection that it may result in lower growth this year.
Inflation continued to accelerate faster, as the demand for oil strengthened and supply remained disrupted. Common prices of oil increased from p38.00/litre (diesel) and p48.50/litre (gasoline) as of the end of last year, to p47.10/litre (diesel), and p54.60/litre (gasoline) in the first quarter. In March, price movements continued to behave well with a 4.3% inflation rate, despite the surging prices of fuel and food.
The export sector is going to experience an impact from the tragedy in the country’s second-largest bilateral partner, Japan, still on the road to recovery. Total exports to Japan amounted to $565.81 million last January. philippine merchandise exports manifested a 12% increase in January by 11.8% to $4B. The Export Development Council plans a re-channeled distribution of products from Japan to China in expectation of reduction in orders.
The philippine government sees the negative impacts of these global crises as temporary and that the target for the economic growth is still achievable, yet there may still be a possible revision of the year-end target.
P. 2 | Colliers international
PHIlIPPINES | 1Q 2011 | THE KNOWLEDGE
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land ValUesImplied land values in Makati CBD barely increased, to an average of p268,202 per sq m (an AV of p16,763 per developable area) during the start of this year. In Ortigas Center, average land values appreciated a bit higher than Makati to p122,714 per sq m. Modest growth at an average of 3%-5% is expected for land values in these traditional business districts over the next twelve months due to moderate developments planned to complete this year.
Makati CBD and Ortigas Average Land Values
Source: Colliers International Philippines Research
COMpARATIVE LAND VALUES
pESO / SQUARE METER 1Q11 4Q10 % Change (QoQ) 1Q12F % Change (YoY)
MAKATI CBD 256,989-279,414 255,000-279,324 0.39% 267,337-283,538 2.70%
ORTIGAS CENTER 92,828-155,055 91,909-153,520 1.00% 97,469-162,808 5.00%
Source: Colliers International Philippines Research
liCenses to sellThe number of HLURB licenses-to-sell continued to decline but at 24% YoY less. Issued licenses in December were at 44,489 - the highest recorded on a monthly basis last year. However, 4Q10 licenses fell by 7% compared to the previous quarter. In the year to December 2010, total issued licenses reached 324,207, more than a hundred thousand short of those issued in the same period of 2009.
Continuing its upward trend, the number of granted licenses for high-rise residential projects climbed by 17%, to 38,936. The same applies to the low-cost housing segment, which increased by 6%. Some of the approved high-rise projects last December are palm Tree 2 at New port City (Megaworld), La Verti Residences and Accolade place (DMCI Homes), The Grove by Rockwell Towers C & D (Rockwell Land), The Meranti at Two Serendra (Serendra Inc.), and Azure Urban Resort Residences St Trop (Century Limitless).
The most significant decrease in the number of issued licenses is highly notable in the mid-income housing segment, which dropped by 30%, to 32,541 units followed by socialized housing which fell by 11.4%. The average total number of issued licenses across the residential sector went down by 6%, twice the dip recorded in November 2010.
HLURB LICENSE TO SELL
UNITS Jan-Dec 2010
Jan-Dec 2009
% CHANGE YOY
Socialized Housing 52,602 59,345 -11.4%
Low Cost Housing 64,537 61,124 5.6%
Mid Income Housing 32,541 46,478 -30.0%
High Rise Residential 38,936 33,177 17.4%
Commercial Condominium 2,622 2,474 6.0%
Farmlot 225 283 -20.5%Memorial park 116,645 209,543 -44.3%
Industrial Subdivision 35 - -
Commercial Subdivision 374 921 -59.4%
Total (philippines) 308,517 413,345 -25.4%
Source: Housing and Land Use Regulatory Board
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peso
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Makati CBD Ortigas Ctr
P. 3 | Colliers international
PHIlIPPINES | 1Q 2011 | THE KNOWLEDGE
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units
units
Quarterly Approvals Moving 12-Month Average (RHS)
HLURB Licenses
Source: Housing and Land Use Regulatory Board
oFFiCe seCtorSupply
With more than twice the supply in 2010, office stock across major business districts in Metro Manila is expected to grow this year by 385,000 sq m in NUA. Bonifacio Global City remained the most active business district, generating almost 50% of the growth.
Contrary to BGC, the Makati CBD office stock remains unchanged, but is expected to reach 2.75 million with the completion of the Zuellig Building (57,000 sq m) beginning in 2012. In the first quarter, total office stock reached at around 92,500 sq m. Completed projects in BGC include W Office (7,060 sq m), Active Fun Bldg. (15,800 sq m), and Jeco prime (15,800 sq m). Other developments which were granted occupancy permits are Vector 1 (13,850 sq m) in Alabang, and MDC 100 (39,800 sq m), in Eastwood City which will soon be fitted out by its tenants.
With a significant number of intended BpO offices shaping up in major CBDs, notably in BGC, other locations should not be discounted, as the completion of Two-Ecom Centre (59,700 sq m) in pasay, and Eton Centris 2 (15,300 sq m) in Quezon City suggests growth in office stock even across non-major business areas.
Demand
The high net take-up of around 40,000 sq m pressed vacancy rates in Makati to fall to 3.8%. An additional stock of around 50,000 sq m by the start of 2012 may lower occupancy rates by an inch, but vacancy rates may rebound at the 3% level, as Makati should still receive high take-up rates in the long term.
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Metro Manila Stock Makati CBD YoY Change (RHS)
Makati CBD vs. Metro Manila Office Stock
Source: Colliers International Philippines Research
The apparent demand for office space pushed vacancies for Grade A buildings to drop by almost 3% lower while premium and Grade B buildings experienced less than 1.5% decline to 6.09% and 3.15%, respectively.
Vacated spaces across all grades were easily occupied, due to heavy demand for BpO spaces used for either contact centers, or back-office functions. Apart from this, Makati remains highly occupied by the mix of traditional offices.
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New Supply During Year Take-Up During Year Vacancy at Year End (RHS)
Makati CBD Office Supply and Demand
P. 4 | Colliers international
PHIlIPPINES | 1Q 2011 | THE KNOWLEDGE | OFFICE
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MAKATI CBD COMpARATIVE OFFICE VACANCY RATES
1Q11 4Q10 1Q12F
pREMIUM 6.09% 7.52%
GRADE A 4.87% 7.79%
GRADE B & BELOW 3.15% 4.41%
ALL GRADES 3.80% 5.47% 3.00%
FORECAST OFFICE NEW SUppLY
LOCATION End-2010 2011 2012 2013
MAKATI CBD 2,699,696 - 57,353 76,681
ORTIGAS 141,018 12,480 27,786 -
FORT BONIFACIO 485,693 188,175 90,603 99,397
EASTWOOD 252,979 75,605 - -
ALABANG 234,305 27,701 - -
OTHER LOCATIONS* 685,362 81,007 - 23,000
TOTAL 4,499,053 384,968 175,742 199,078
Source: Colliers International Philippines Research
Source: Colliers International Philippines Research*Manila, Pasay, Mandaluyong, and Quezon City
Rents
YoY, the Makati CBD premium rates increased by 4%, to an average of p820 per sq m monthly (per net useable area.) Grade A offices stood at p680 per sq m monthly, growing by 2% over the first quarter. Similarly, Grade B office rental rates increased by an average of 3% to p450 per sq m monthly.
As comparative rental rates continue to tighten, demand for office space in Makati tends to be inelastic, considering that the stock is limited. Expectations are for both Grade A and B office rental rates to climb by 9%-11% over the next twelve months. While premium rental rates may rise to more than p900 per sq m monthly by the start of 2012.
NOTABLE LEASING DEALS
Building Area Size (sq m)
Hanston Square Ortigas 9,102.00
Alphaland Southgate Tower Makati 8,500.00
Robinsons Cybergate 3 Mandaluyong 6,235.93
Source: Colliers International Philippines Research
COMpARATIVE OFFICE RENTAL RATES
MAKATI CBD (BASED ON NET USEABLE AREA)
pESO/SQ M/MONTH 1Q11 4Q10 %CHANGE (QOQ) 1Q12F %CHANGE (YOY)
pREMIUM 752-889 740-880 1.2% 791-916 4.0%
GRADE A 472-889 450-880 2.4% 530-955 9.1%
GRADE B 422-480 402-471 3.3% 461-529 9.7%
Source: Colliers International Philippines Research
P. 5 | Colliers international
PHIlIPPINES | 1Q 2011 | OFFICE
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Capital Values
Average office capital values across all building types in Makati appreciated minimally by 1.3%, at a rate similar to the previous quarter. Capital values among premium Grade Buildings is now at p103,000 per sq m, which continues to escalate since it breached the one hundred thousand level during late-2010. Grade A & B offices likewise rose by 2.07%, to p78,500 and 0.09% to p53,000, respectively.
Capital values are capped to appreciate by 7% by the same period next year. By the end of this year, valuation for premium grade buildings should peak at p110,000 per sq m, while Grades A & B should rise to p82,000 and p55,000, respectively. Apart from Makati, growth in other major locations is estimated to be at 4% YoY.
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Premium Grade A Grade B/B-
Makati CBD Office Capital Values
Source: Colliers International Philippines Research
COMpARATIVE OFFICE CApITAL VALUESMAKATI CBD (BASED ON NET USEABLE AREA)
pESO/SQ M 3Q10 2Q10 %CHANGE (QOQ) 3Q11F %CHANGE (YOY)pREMIUM 94,484-111,540 92,000-110,000 2.0% 103,557-122,495 9.7%GRADE A 67,210-89,979 65,000-89,000 2.1% 71,333-97,439 7.4%GRADE B 45,000-61,050 45,000-61,000 0.1% 47,060-62230 3.0%
Source: Colliers International Philippines ResearchRESIDENTIAL SECTOR
Supply
Across the five sub-markets tracked by Colliers, some 518 units under Bonifacio Global City were added to the supply stock this quarter. These projects include Crescent park Residences (198 units), Stamford Executive Residences 2 (320 units) Overall unit inventory for this year is expected to reach 8,958 units, 60% of which is lined up for completion in the fourth quarter.
In Makati, projects with around 1,800 units are in the pipeline and are slated for completion come end-2011. These projects include the highly anticipated branded luxury-residential, Raffles Residences, quoted to have a 74% sales take-up.
Strong market signals seem to hint growth across premium grade condominiums, however the market is continually fed by low- to mid-cost projects reducing supply of bigger unit sizes. In Metro Manila, condominium projects offer 70% of studio and one-bedroom units, with average sizes of 25 sq m to 35 sq m. The trend is most likely to continue in the medium term in accord with the emergence of the BpO sector, one of the drivers of growth for this segment.
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Source: Colliers International Philippines Research
Makati CBD Residential Stock
P. 6 | Colliers international
PHIlIPPINES | 1Q 2011 | OFFICE | RESIDENTIAL
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FORECASTRESIDENTIAL NEW SUppLY
LOCATION End-2010 2011 2012 2013 TOTALMAKATI CBD 13,076 2,181 1,961 1,895 19,439 ROCKWELL 2,382 1,336 - - 3,718 FORT BONIFACIO 10,709 3,052 2,417 2,397 18,575ORTIGAS 7,481 2,389 934 1,579 12,383EASTWOOD 5,735 - 558 977 7,270TOTAL 39,383 8,958 5,870 6,848 61,385
Source: Colliers International Philippines Research
Demand
Wider inventories in Makati CBD pushed vacancy rates higher at the 9% level this quarter and may reach to as high as 11% by the end of the year. In other sub-markets such as Eastwood and Rockwell, vacancies remained stable by 3% and 4% respectively considering that the stock remains stable.
Rental market demand for the luxury residential was high with an occupancy rate of 90% in Makati CBD. However, the continuous inflow of smaller-size units, which are easily absorbed by the investors market, may escalate vacancy rates further as more of these spaces will still be left for lease.
2%
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1Q96
4Q96
3Q97
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Makati CBD Residential Vacancy
Source: Colliers International Philippines Research
MAKATI CBD
COMpARATIVE RESIDENTIAL VACANCY RATES
1Q11 4Q10 1Q12F
LUXURY 9.9% 6.3%
OTHERS 15.0% 10.0%
ALL GRADES 9.4% 8.8% 11.6%
Source: Colliers International Philippines Research
Rents
Rents for the luxury 3BR residential rates in Makati CBD adjusted slightly, to p560 per sq m monthly, which translates to 162,400 sq m monthly for a 290-sq m unit. QoQ change was minimal by less than one percent, which yields an average increase of 4% over the next 12 months. Taking into account the limited availability of these unit types, prices tends to move elastically, with a continued uptrend in demand.
P. 7 | Colliers international
PHIlIPPINES | 1Q 2011 | RESIDENTIAL
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Rockwell Center still offers the highest rental rates averaging at p736 per sq m since it increased by 3% quarterly during the end of 2010. A gradual increase in rate, however inevitable, may only ease temporarily, as the inventory in this location widens over the next 3 years.
By an increase of 1.5%, rental rates in BGC rose to p636 per sq m monthly, translating to p159,000 per month for a 250-sq m unit. The completion of Fort Victoria B and C, with an inventory of mostly 3BR units, will temper rental rates, considering that the availability of these unit types will increase.
Makati CBD, Rockwell, Bonifacio Global Cityprime 3BR Units Residential Rents
Source: Colliers International Philippines Research
METRO MANILA RESIDENTIAL CONDOMINIUMCOMpARATIVE LUXURY 3BR RENTAL RATES
pESO/SQ M 1Q11 4Q10 %CHANGE (QOQ) 1Q12F %CHANGE (YOY)MAKATI CBD 360-759 360-753 0.5% 376-790 4.2%ROCKWELL 642-830 620-810 2.9% 679-878 5.7%BONIFACIO GLOBAL CITY 528-744 520-733 1.5% 553-782 5.0%
Source: Colliers International Philippines Research
COMpARATIVE RESIDENTIAL LEASE RATESTHREE-BEDROOM pREMIUM, SEMI-FURNISHED
MINIMUM AVERAGE MAXIMUM %CHANGE (YTD)Apartment Ridge/Roxas Triangle Rental Range 55,000 104,500 225,000 -0.48% Average Size 230 270 350 Salcedo Village Rental Range 55,000 78,750 120,000 0.23% Average Size 150 190 320 Legaspi Village Rental Range 60,000 146,667 225,000 0.57% Average Size 175 212 274 Rockwell Rental Range 120,000 154,000 190,000 0.00% Average Size 184 224 286 Fort Bonifacio Rental Range 80,000 151,000 215,000 1.34% Average Size 145 240 309
Source: Colliers International Philippines Research
P. 8 | Colliers international
PHIlIPPINES | 1Q 2011 | RESIDENTIAL
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Capital Values
In Makati CBD, a slight movement on the secondary market manifests a minimal increase in capital values to around p103,000 per sq m this quarter. The prevailing price for the new market of a 3BR unit in Makati CBD is at p120,000 per sq m. in average. pre-selling projects remained to be much preferred due to its flexibility in payment terms and better facilities.
In Rockwell Center, where secondary market rates are slightly higher than Makati, an increase of 4% is expected over the next 12 months from the current p107,200 per sq m. Edades, as the only pre-selling project in the area is now selling at an average of 125,000 per sq m for a 3BR unit. Both secondary and new market prices are to appreciate gradually in a much wider gap.
Capital value in Bonifacio Global City is now at p103,000 per sq m and may further increase by 3%-4% after a year. As an emerging business district and with a number of planned residential projects, both secondary and new market prices tend to be very high. price movements may, however, soften as stiff competition across pre-selling projects eventually occurs.
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1Q07
3Q07
1Q08
3Q08
1Q09
3Q09
1Q10
3Q10
1Q11
3Q11
F
1Q12
F
in p
eso
per
sq
.m.
Makati CBD Rockwell Bonifacio Global City
Makati CBD Residential Capital Values
Source: Colliers International Philippines Research
METRO MANILA RESIDENTIAL CONDOMINIUMCOMpARATIVE LUXURY 3BR CApITAL VALUES
pESO/SQ M 1Q11 4Q10 %CHANGE (QOQ) 3Q11F %CHANGE (YOY)MAKATI CBD 71,535-134,954 70,827-133,750 0.9% 73,704-145,768 6.3%ROCKWELL 92,000-122,500 92,000-121,000 0.7% 94,506-128,994 4.2%BONIFACIO GLOBAL CITY 86,287-121,557 85,943-121,073 0.4% 88,728-126,989 3.7%
Source: Colliers International Philippines Research
RETAIL SECTOR
-5%
0%
5%
10%
15%
20%
-
100,000
200,000
300,000
400,000
500,000
600,000
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
F20
11F
in s
q.m
.
New Supply During Year Take-Up During Year Vacancy at Year End (RHS)
Metro Manila Retail Supply and Demand
Source: Colliers International Philippines Research
P. 9 | Colliers international
PHIlIPPINES | 1Q 2011 | RESIDENTIAL | RETAIL
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Supply
By the end of 2011, additional stock of 108,000 sq m is anticipated, as the construction of the Lucky China Town Mall in Binondo, Manila is set to complete. A year after the completion of SM Novaliches, Metro Manila stock remained at 5 million sq m this quarter.
Besides BGC, and the future development of Entertainment City (800 hectare) in Manila, the limited space within the major districts moved major retail developers to expand geographically. New provincial projects include Robinson’s place palawan, SM City Masinag, SM City Olongapo. While Ayala Land, on the other hand, announced its plans of expansion in Cavite, Cebu and Bacolod.
Apart from regional expansions, a trend in retail development for the medium term is imminent in small–scale community malls, which function as the support component for the BpO offices and residential communities. Still, there are a few district-to-regional-sized malls expected to rise on the fringes of Metro Manila. Simultaneously, retail activities are also geared towards the retrofitting and expansion of the existing malls.
-2%0%2%4%6%8%10%12%14%16%
2,400,000
2,900,000
3,400,000
3,900,000
4,400,000
4,900,000
5,400,000
1Q98
3Q98
1Q99
3Q99
1Q00
3Q00
1Q01
3Q01
1Q02
3Q02
1Q03
3Q03
1Q04
3Q04
1Q05
3Q05
1Q06
3Q06
1Q07
3Q07
1Q08
3Q08
1Q09
3Q09
1Q10
3Q10
1Q11
F3Q
11F
1Q12
F
in s
q.m
.
Retail Stock YoY Change (RHS)
Metro Manila Retail Stock
Source: Colliers International Philippines Research
METRO MANILA RETAIL VACANCY 1Q11SUpER REGIONAL 0.40%REGIONAL 0.90%
Source: Colliers International Philippines Research
Demand
Occupancy rates were high at the 99% level across super regional and regional malls. In 1Q11, vacancy rate is seen lower across super regional malls at 0.4% or at a range of 600 sq m to 800 sq m. Regional malls on the other hand, has higher vacancies at a 0.8% rate (700 sq m to 900 sq m). With most of these mall-types located in major CBDs, vacated stores are expected to be easily replaced by new tenants pushing vacancy rates to be at a long-term low. In addition, heavy foot traffic strengthened occupancy as the result of the expansion of international brands, varied products and services offerings have emerged.
Rents
As of 1Q11, rental rates in Makati CBD, particularly Ayala Center, increased by 0.9% to p1,180 per sq m since last quarter. Lower than in Makati, Ortigas rental rates increased by 0.5% to p1,055 per sq m. With an increase in consumer confidence, volume sales on products such as apparel and electronics are expected to improve, leading to the build-up of effective rents to as high as 5% over the next twelve months.
RETAIL SECTOR
RETAIL STOCKMETRO MANILA
SQ M 1Q11 4Q10 %CHANGE (QOQ) 1Q12F %CHANGE (YOY)SUpER REGIONAL 2,938,562 2,938,562 0.0% 3,051,353 3.8%REGIONAL 1,065,378 1,065,378 0.0% 1,065,378 0.0%DISTRICT/NEIGHBORHOOD 1,050,331 1,050,331 0.0% 1,050,331 0.0%ALL LEVELS 5,054,271 5,054,271 0.0% 5,167,062 2.2%
Source: Colliers International Philippines Research
P. 10 | Colliers international
PHIlIPPINES | 1Q 2011 | RETAIL
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COMpARATIVE EFFECTIVE RETAIL RENTSpESO / SQ. M. 1Q11 4Q10 %Change (QoQ) 1Q12F %Change (YoY)
AYALA CENTER 1,180 1,170 0.9% 1,240 5.1%ORTIGAS 1,055 1,050 0.5% 1,077 2.1%
Source: Colliers International Philippines Research
0%
1%
2%
3%
4%
5%
6%
7%
8%
550
650
750
850
950
1,050
1,150
1,250
1,350
1Q
10
3Q
10
1Q
11F
3Q
11F
1Q
12
in p
eso
per
sq.m
. per
month
Monthly Rent YoY Increase (RHS)
Retail Rents: Makati CBD
Spending Indicators
Early this year, CAMpI announced their forecast of a more conservative sales growth of 4% for 2011, achieving record-breaking sales in 2010. An 8.2% growth in car sales marked the start of the first quarter of 2011, with record sales of 36,293 vehicles. Sold commercial vehicles continue to dominate the market, with 23,867 units, or about 65% of the total share, while sold passenger cars increased by 11.3% to 12,426 units, or 35% of the total share. CAMpI recognizes these records as good signs, despite high growth rates last year, and they remain optimistic, despite the rise in fuel prices. Significant contributors to elevated sales are the bank’s lending capacity and the strong OFW remittances during the start of this year.
-60%
-40%
-20%
0%
20%
40%
60%
-
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
45,000
50,000
1Q98 1Q99 1Q00 1Q01 1Q02 1Q03 1Q04 1Q05 1Q06 1Q07 1Q08 1Q09 1Q10
Car Sales YoY Change (RHS)
Source: Colliers International Philippines Research
Quarterly Vehicle Sales
Source: Chamber of Automotive Manufacturers of the Philippines
0%
1%
1%
2%
2%
3%
3%
4%
4%
550
650
750
850
950
1,050
1,150
1Q
10
3Q
10
1Q
11F
3Q
11F
1Q
12
in p
eso
per
sq.m
. per
month
(Makati) Monthly Rent (Makati) YoY Increase (RHS)
Retail Rents: Ortigas CBD
P. 11 | Colliers international
PHIlIPPINES | 1Q 2011 | RETAIL
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The information contained herein has been obtained from sources deemed reliable. While every reason-able effort has been made to ensure its accuracy, we cannot guarantee it. No responsibility is assumed for any inaccuracies. Readers are encouraged to consult their professional advisors prior to acting on any of the material contained in this report.