Real estate outlook remains rosy in 2013 CBRE

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The Philippine Star

07 Dec 2012

http://www.philstar.com/business/2012/12/07/881979/real-estate-outlook-remains-rosy-2013-–-cbre

MANILA, Philippines – Leading real estate advisory firm CBRE Philippines shared in their recent briefing that the Philippine real estate sector shows no signs of slowdown and a positive outlook will still be seen in 2013.

“We are now experiencing the best real estate market in the last 20 years. It took two decades to get the stars aligned, but now, we’re looking at sustained growth and success. The challenge is how to cope with this unprecedented success. Suffice it to say that If you build it, they will come – be it office, residential, or leisure properties,” Rick Santos, CBRE chairman and founder, said.

In the office/commercial sector, CBRE said the country is in a unique position in Southeast Asia. Santos said the phenomenal growth of the BPO sector is akin to India’s experience in the early 90s. The Philippines is one of the top BPO providers in the world, surpassing India in voice operations and coming in second in non-voice operations. Santos mentioned that there is a lot of room for expansion in other areas such as software and web/graphics development, information technology and engineering services, and healthcare BPO. BPO revenues are expected to grow by 10-15 percent in 2016 (source: BPAP).

Santos adds that “the Philippines is one of the most cost effective outsourcing destinations in Asia, providing conducive environment for foreign investors through its excellent pool of skilled labor and customer service, one of the cheapest rents, and highest yields in Asia. The Philippines is becoming the lifeboat for many European and US companies that need to outsource in order to survive and preserve jobs in their homeland.” This is evident from global banks that are now relocating in the country for back office support. “We are a multinational player without leaving our shores. Manila is the gateway of the world – we are running the world’s businesses out of Manila.”

In the residential front, the country will also experience increased real demand across all market segments, spurred in large part by the BPO sector.

Multiple credit rating upgrades, the support of the government, and positive outlook are encouraging more businesses to expand and relocate in the country creating demand in luxury destinations and leisure properties.

However, while demand for the high end market will be sustained in 2013, developers will focus more on mid-income residential market segment within the P45,000 to P80,000 psqm range, reflecting the demand created from the growing population of families and young professionals and supported by the record-low interest rates. The Philippines has the lowest interest rates and best financing schemes for home ownership today.

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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Ayala Triangle, Ayala Avenue, Makati City
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