8/8/2019 Manila Office Market Beat 2Q10

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MARKETBEAT

This report co ntains information ava ilable to the pub lic and ha s be en relied upon b y Cushma n & Wakefieldon the basis that it is ac curate and co mp lete. Cushma n & Wakefield a cc ep ts no respo nsibility if this shouldprove not to b e the ca se. No warranty or representa tion, express or imp lied, is mad e to the a cc uracy orcom pleten ess of the information c ontaine d h erein, and same is submitted subjec t to errors, omissions,change of price, rental or other conditions, withdrawal without notice, and to any special listing conditionsimposed b y our principals.

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For further information, pleasecontact

Josem ari C. C uervo Cuervo Far East Inc

5th floo r S&L Building, 101 Este b an St co r. Dela RosaSt.,

Makati City, Philippines 1229

Tel: ( 632) 750-6610Ema il: josem ari_c uervo@cuervo .com .ph

OVERALL GRADE A RENTAND VACANCY (Ma kati CBD)

Source :.,Nat ional Sta tistics Office , Nationa l Sta tistica l Coo rdination Board

Note : 2010* = partia l figures (ave rage)

2Q 2010

Economy2010 started strong with a better than expected real GDPgrowth of 7.3% in the first quarter due to recent globaltrad e rebo unds and election-related spend ing. Acc ordingto p olic y ma kers, grow th for 2010 is p rojec ted to be at 5%to 6%, whereas inflation rate is expected to range from 4%to 4.8%. Exit-strateg ies a re also now be ing see n to t akeroo t; the c entral ba nk has indica ted tha t it is c onsideringnormalizing its policy rates, and that despite the lowinflation rate registered in June at 3.9%, inflationaryp ressures a re still present. Construc tion p rojec ts haveincrea sed c onside rably in the first ha lf of 2010, reinfo rc ingthe p rojec ted growt h. The new ad ministration in plac e a lso

ad mitted t hat p utting in chec k the fisc al health of theco untry will be a c hallenge. In fac t, the budg et d eficit

target was also adjusted from Php300B to Php325B,although S&P de c lared tha t this w ill not a ffec t the c red itratings of the country since the new target still remainsconsistent w ith the current rating sc ore.

OverviewThe m arket has som ew hat sta bilized at its c urrent le aserate s. In fac t, not muc h movem ent has been seen ove r the1st ha lf of 2010. This is particularly true for most businessa rea s. Prime ra tes a t the CBD stoo d a t Php850/sqm/ mth ,with the average vac anc y rat e of 8.5%.

Outlook2010 is still tenant favorable market and it is expected toremain so at least until the 1st half o f 2011. Hence, lea serate s in the m ajor b usiness a rea s a re see n to rem ain sta b lealthough g rad ual increases ma y occ ur at t he latter part ofthe 1st half of 2011. Investor sentiment is generallyperceived to c ontinue to imp rove a nd that the e xpec tedrelease of the implementing rules and regulations of theReal Esta te Inve stm ent Trust Law (REIT) is also seen togenerate huge investments to the sector. Developers arestill aggressive enough that new supply is expected toa rrive from this yea r to t he ne xt.

MANILA OFFICE REPOR

A CUSHMAN & WAKEFIELD RESEARCH PUBLICATION

LegendMa rket Rising Market Sta ble Market Falling US$=Php46.30

EUR=Php59.83

PREMIUM RENTS AS OF 2Q 2010

Loc at ion Rent % Cha nge from 6 mth(Net Effective on NLA) (Loc al cu rrenc y)

OutlookPHP US$ 3 1

/sq.m. / sq.m. / sq.ft. mth yr /mth /mth /mth ago ago

Ma ka ti CBD 850 14.21 1.71 0.13% 6.3% Otiga s Ce nte r 550 9.20 1.10 0.13% -10% Fort Bonifa c io 600 10.03 1.20 0% 0% Filinvest 450 7.53 0.90 0% 0%

ECONOMIC INDICATORS

Lat est Release Avera geFY 2009 FY 2010*

Rea l GDP Gro wth 1Q 10 7.3% 1.13% 7.3%Unemp loym ent 4Q 09 7.3% 7.48% -Inflat ion Ra te Jun-10 3.9% 3.35% 4.25%*

SIGNIFICANTNEW LEASE TRANSACTIONS

Building Tenan t Sq. M . Loc a tion

Ro ckwe ll Me ralco Trend Micro 10,000 Ortiga s Ctr

8 Park B Ac c ent ure 6,000 Frt Bonifa c io

W Of fic e Results Ma nila 3,500 Frt Bon ifac io

World Finan ce Fa c tset 1,700 Frt Bonifa c io

SIGNIFICANT PROJECTS UNDER CONSTRUCTION

Building Loc at ion Office GFA Com plet ion(Sq. M.) Dat e

Zue llig Building Ma ka ti CBD 66,000 3Q 12

Sun Life C ent re BGC 22,500 2Q 11

W Offic e BGC 9,108 3Q 10

GA Co rporate Ctr QuezonC ty 10,000 3Q 10