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Philippine property market seen to be hottest in Asia - CBRE Philippines

Philippine property market seen to be hottest in Asia

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Philippine Times

By Riza T. Olchondra

06-06-2013

 

The Philippine office sector is among the most dynamic in Asia and is growing at record levels, according to officials of CBRE Philippines.

The commercial real estate services firm said Metro Manila was leading the country’s office market, with occupancy rates hitting 97 per cent across Central Business Districts (CBDs) in the first quarter of 2013.

In the office rent market, Manila is among the areas where rental growth is accelerating, alongside Bangkok, Taipei, Tokyo, according to industry data.

High investor confidence brought vacancy levels to hover at an all-time low of 3.21 per cent in Metro Manila from the recorded 3.43 per cent in the fourth quarter of 2012 amid economic growth, credit upgrades, cost-effective rental rates, the influx of expanding multinationals and manufacturers, and expatriates moving from renting to buying properties, said CBRE CEO Rick Santos in a briefing on Wednesday.

Combined with the effect of anti-speculation taxes, tighter rules, and sky-high property costs in saturated markets such as China, Hong Kong and Singapore, more property investments are expected to boost Philippine developers, said CBRE vice chairman and global corporate services chief Joey Radovan at the same briefing.

Radovan said that even with the challenge posed by a strong peso, the Philippines remained among the most cost-effective and attractive (with a young and talented labour force) destinations for BPOs and real estate investors in Asia.

Makati City remains the country’s top CBD as it offers the highest quality Grade A and premium office buildings available in the market, Radovan said. Makati largely gained from the expansion of multinational corporations, with the CBD’s vacancy rating down to 5.07 per cent in the first quarter from 5.45 per cent recorded in the previous quarter.

Declining office space vacancy put upward pressure on rent, pushing average asking lease rate up to P890.27 a square meter a month for the first quarter of 2013.

Radovan said vacancy rates in Bonifacio Global City (BGC), Ortigas, Alabang, and Quezon City fell below 5 per cent in the first quarter, benefiting from the tightening of supply and increasing rates in Makati CBD.

CBRE research also showed that the growth of hiring for BPO full-time employees (FTE) was highest in BGC, Muntinlupa and Quezon City.

Orion Support Incorporated (OSI)

Dear Rick,

Following up from my initial request to you for support in finding a new office location for our company, Orion Support Incorporated.   Well, we moved in to the LTA Building on Perea Street, fifty meters or so from Paseo de Roxas this weekend, only a 4 minute walk to AmCham and under excellent terms.

While I think you assigned both Morgan Mcgilvray and Sherdil Rana to support our original request; as you know, Morgan was very tied up with his wife giving birth during the period we identified this location and negotiated with the landlord, Mr. Mike Arroyo. Yes, the former First Gentleman. But in my short interaction with Morgan, I can see that he is a solid, young professional.

With regards to Sherdil, I want to tell you that with 35+ years of interviewing hundreds and hundreds of individuals, I was impressed with his professionalism, focused support and “can-do” attitude  from the point of identifying our potential office space, and through the negotiation stages prior to the signing of our 6 year contract.  I was impressed with his considered opinions, insightfulness with regards to Philippine business culture and his sage advice related to our strategy in the negotiation process.  Sherdil was able to negotiate a rental rate per square meter about 150 – 200 pesos less than the going rate in this area, and with only a 7% increase after 24 months. Add to that, he secured for us three parking slots at no additional cost, two months security deposit versus the standard three, and two months advance rent to be applied to the front end of our contract versus the back end as is the case in most rental contracts. And, he got the landlord to repaint the entire office with three coats of mildew resistant paint at their expense.   But best of all, we were given a 6 year lease, with only having to give two months notice and forfeit only our two month security deposit to move out anytime with no additional penalty!

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Manila Office

10F Ayala Tower One & Exchange Plaza
Ayala Triangle, Ayala Avenue, Makati City
1126 Philippines

T +632 752 2580 | F +632 752 2571
ricksantosteam@cbre.com.ph

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Unit 1505, 15th Floor, Ayala Life - FGU Center
Mindanao Avenue,Corner Biliran Road
Cebu Business Park, Cebu City
6000 Philippines

T +032 318 0070 | +032 236 0462
ricksantosteam@cbre.com.ph

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