Sunday, December 26, 2010

True resort living

Saturday, 02 October 2010 17:24 Vladimir Bunoan

While many property developers promise resort-like living to buyers—mostly for condominium projects in Metro Manila—with amenities such as swimming pools and landscaped gardens, Roxaco Land Corp. is posed to deliver the real thing.

The property development arm of Roxas and Co. Inc., Roxaco Land recently broke ground on its latest project: Anya Resort & Residences, a 5.7-hectare development in Tagaytay, which integrates a residential subdivision and a boutique resort.

“It’s like living in a resort complex,” says Santiago R. Elizalde, Roxaco Land’s senior vice president. “The resort’s facilities will be the amenities of the residents.”

Leisure-estate development isn’t new to Roxaco Land, which is one of the partners in Peninsula de Punta Fuego and Terrazas de Punta Fuego in Nasugbu, Batangas. The Roxas family, best known for its sugar business with Central Azucarera Don Pedro Inc. and Central Azucarera de la Carlota Inc., was the original landowner of Peninsula de Punta Fuego, a high-end second-home residential project developed in partnership with Landco Pacific Corp.

But with Anya, Roxaco Land is going at it solo. “We’re translating that experience [in Punta Fuego] in Anya, which is exclusively a Roxaco Land project,” Elizalde says.

For instance, Elizalde noted that homeowners at Punta Fuego often have to hire a caretaker family to watch over the maintenance of their homes while they are away. At Anya, this won’t be a problem, since the resort can offer housekeeping, gardening and maintenance services.
Moreover, residents can also enjoy private dining options and catering, as well as home spa services, should they want to be pampered.

Roxaco Land is also one of the principals behind Fuego Hotels, a hotel management company with managed properties in top resort destinations, including Pearl Farm in Davao and 7 Stones in Boracay. Fuego Hotels will also manage the Anya resort, which consists of several pavilions, which includes a spa, a signature restaurant and a coffee shop, with the destination resort pool as the focal point. Accommodations include suites, as well as villas, which Elizalde says will not be more than 50, in keeping with the boutique quality of the development and to ensure the privacy of the homeowners.

Peaceful and calm

With only 57 open lots, with an average size of 450 sq m, Anya promises to be an exclusive enclave for those seeking a more quiet environment. Unlike most of the new property developments in Tagaytay, it does not have a ridge view as it is located in the interior portion of the mountain city, near the seminaries.

Which is just appropriate as the word anya in Sanskrit means something other than the ordinary. Elizalde describes the location as “peaceful and calm.…The location adds to the general ambiance of the place.”

With a natural rolling terrain, the property used to be a pineapple plantation years ago. It was also once a tropical garden, with numerous trees and bamboo. “We’re trying to maintain as much of the garden as possible,” Elizalde says.

To ensure that the resort feel is maintained, Anya will sport an Asian-tropical architecture, which seeks to “unify the entire development as it creates a distinct sense of place that seamlessly integrates the indoors with the outdoors and opens to the favorable climate and terrain of Tagaytay.”

In fact, Elizalde says there will be no perimeter walls between the lots, with the divisions achieved through creative landscaping.

Lot owners will also have only three tropical Asian-inspired signature home designs to choose from—bungalow, villa or two-story—so every home follows the general architecture of the entire development. Elizalde says owners must consult with Anya’s architects to discuss issues such as interior partitions to address the individual needs of the lot buyers. “But we encourage them to stick to the exteriors,” he says.

The focal point of the residential area will be a clubhouse—exclusively for the use of homeowners—which also serves as the gateway to the facilities of the resort.

Since the groundbreaking rites in July, a third of the lots have already been sold, according to Giovanni Montini Nilo, assistant vice president for operations at Roxaco Land. “We are already starting horizontal development of the residential phase,” Nilo says, adding that this will take around a year to finish. “The resort will come in staggered phases. The last [to be developed] will be the suites.”

Asked if Anya will pose as a competition for Punta Fuego, Elizalde says the Nasugbu project has long been sold out. In fact, he points out that some of the buyers at Punta Fuego also have homes in Tagaytay. “So we’re offering them a mountain and a beach resort option,” he says. “It’s basically the same market.”

New model

Roxaco Land has been around since 1988. While it is best known for Punta Fuego, it has been active in property development, but mostly in Batangas, where Roxaco has become an established name.

It is behind several residential developments, including Palm Estates, a self-contained community in Nasugbu consisting of residential open-lot subdivisions, a school and commercial areas; The Orchards, a 6-hectare residential open-lot subdivision in Balayan, Batangas; Goodwood Homes, a 2-hectare exclusive, low-density duplex community in Imus, Cavite; Woodstock Homes, a mass housing project in Nasugbu, which is comprised of 386 housing units and 100 open lots; and its first venture, Landing Subdivision, a 23-hectare residential open-lot subdivision in Nasugbu.

But with Anya, Roxaco Land is looking at a new development model.

“Our aim is to create a Filipino resort brand. We can roll this out to other properties in the country,” says Elizalde, adding that Roxaco Land is looking at the top tourist destinations, such as Palawan, Boracay and Bohol. “Baguio also seems to be moving up the tourism ladder as a possible destination.”

“There are a lot of smaller properties that are being overlooked by the big developers. That’s a niche we can develop,” he says.

Green development and affordable housing

Sunday, 17 October 2010 11:20 Rizal Raoul Reyes / Correspondent

IN order to achieve green development, the country must give high emphasis to affordable housing, according to a prominent Filipino urban planner and architect.

In his presentation during the recently concluded Manila Construction event on building sustainable communities held at the SMX Convention Center, Nathaniel von Einsiedel said there must be serious efforts in pursuing affordable housing so more people can pursue a sustainable lifestyle.

“Green development is also giving emphasis on affordable housing. However, real estate developers will have a problem selling to the upscale market if their buyers will learn they’re going to be neighbors whose homes will be smaller units,” he said.

Einsiedel, a registered architect and urban planner, was the first commissioner for planning in the Metro Manila Commission, serving for 10 years when he formulated and administered the first Metro Manila land-use and zoning ordinance, the regional development and framework plan and the Capital Investments Program. He is the current chairman of CONCEP Inc. and executive director for the company’s planning division.

Despite having a law requiring developers to allocate 20 percent of their project to affordable housing units, Einsiedel said proponents will develop another site for socialized housing because they think buyers of the bigger units aren’t comfortable being grouped with their less affluent neighbors.

“Developers will look to the next mountain for their socialized housing and leave the prime location to the affluent section. This will create problems for the drivers, janitors and security guards who live in distant places,” he said.

“They will not live in Global City, but across C-5 and the Marikina Valley fault. But that’s where they can afford and nobody is putting housing for them in Global City,” he added.

Republic Act (RA) 7279, or the Urban Development and Housing Act of 1992, defines socialized housing as the state’s primary strategy in addressing homelessness through programs and projects on providing either house-and-lot packages or home lots only for underprivileged people nationwide.

The law states that such beneficiaries are either individuals or families who reside in urban and urbanizable areas, who don’t own homes and whose income or combined household income fall within the poverty threshold, according to the National Economic and Development Authority.
Specifically, Section 18 of RA 7279 provides for such strategy by requiring a developer to undertake socialized housing in an area equivalent to at least 20 percent of either total subdivision being developed or total subdivision project cost.

Developing the food-production capabilities of every community is also important nowadays, especially in these times of climate change wherein people might suddenly find themselves isolated because of natural calamities.

“Just use the Ondoy experience as a reference,” he said.

“Imagine being trapped in an area where the floodwaters are high and you don’t have food supplies. By putting a small garden to plant vegetables and fruits, [it] would help a lot especially in times of calamity,” he added.

He also encouraged the propagation of organic gardens and the revival of backyard piggery to boost pork production in the country. With the development of new techniques in backyard piggery such as using coconut coir, Einsiedel said raising pigs can be easier in the metropolis.
Einsiedel said the development of backyard industries can allow people to walk to their work.
“Home offices can also be encouraged especially with the presence of technologies such as the wireless fidelity and worldwide interoperability for microwave access.”

Improving the sidewalks is another aspect that should be tackled by Filipino urban planners and designers, according to Einsiedel. He added they should use the experiences of old towns and cities wherein sidewalks were used as parking area, sidewalk vendor’s place, vulcanizing shops and other kinds of businesses and, at the same time, being used by the people.

“There should be minimal contact between motor vehicles and pedestrians,” he said.

However, Einsiedel said there are instances when the development of sidewalks is not required. He said this can be done in communities where vehicular flow is low.

To appreciate more the relevance of green lifestyle, Filipinos must learn to enjoy walking longer distances, according to Einsiedel. However, this would be a problem for many Filipinos.

In a research he conducted on the construction of the LRT-1 system, Einsiedel found out that Filipinos are spoiled because they would just walk a maximum distance of 250 meters.

“The standard distance of the terminals of mass-rail transit systems abroad is 1 kilometer. It won’t work in the Philippines because Filipinos will cite many reasons such as the rains, heat and the dust not to walk 1 kilometer. So when you plan an area for bus and jeepney stops, people will normally walk 250 meters and if it exceeds that number, there will be complaints,” he said.

Building toward the future

Saturday, 06 November 2010 17:11 Ike Suarez*

Come the last week of December, the sun will nestle once more between the twin peaks of Mounts Batulao and Talamitam in Nasugbu, Batangas, that will create the intense reflection of the sun’s rays and brilliant displays of light that give this mystic mountain its name.

Over the generations, witnesses to this natural light-show have been awestruck by this natural phenomenon. It is, in fact, the reason this mountain has become steeped in mystique and legend. Mount Batulao also serves as the inspiration for the name given to the residential township being built near it, Sandari Batulao.

This year, as the sun and Mount Batulao again make their display of light and splendor, this natural phenomenon and wonder of nature could very well herald the milestones now achieved toward the completion of various infrastructure projects to serve the needs of the future residents of Sandari Batulao.

Down to brass tacks with roads

Batulao View sat down with engineer Mariano Hilario, Citystate Properties and Management Corp. (CPMC) vice president for land development and head of the ALC Group of Companies Central Engineering Group.

With Hilario at the interview were architect Leandro Llorente and engineer Rudy Francisco Jr., two other key members of the team implementing the infrastructure development in Sandari Batulao.

Within November, Sandari Batulao’s first phase of construction for the main road—25 meters and six lanes wide—will be completed to serve the needs of Sandari Batulao residents and their guests traveling to and from the other developments in the township under construction

following the master plan of renowned Singaporean architect Liu Thai Ker. The 25-meter road is the main access road or spine road leading through all 800 hectares of the Sandari Batulao development. This is the first of three self-contained enclaves in Nalé, a residential community that is CPMC’s initial offering for the premier residential township it is building.

Branch roads connecting the lots in the Bamboo Garden Enclave to the main road shall also have been completed by then. These roads will measure 12 meters to 15 meters wide, depending on where they are located.

Branch roads in Nalé are 12 to 15 meters’ right of way, depending where they are located. Road layout design includes planting strips in between the main carriageway and the pedestrian walkways of this new community.

Likewise, to be completed by then will be their accompanying drainage and sewage systems and sidewalk gutters.

Hilario told Batulao View that the roads will be lined by trees that will, in time, grow into bowers of shade to shelter joggers and pedestrians from the hot sun. These roads, he said, are being built to align with the natural contours of the land on which Sandari Batulao arises.

Water, sweet water

While steady and potable sources of water may be a problem in some highland areas where water tables lie deep underground, Sandari Batulao has abundant sources of fresh, potable water.

To maximize this asset, Hilario said, a deep well that goes down 500 meters, with an overhead tank capable of holding 50,000 gallons of water will be completed and functioning not later than December. The well will tap the water aquifier that runs under Sandari Batulao.

Hilario also said that, by late 2011, an underground cistern or water tank will be completed, and this cistern will serve as a reservoir that will store a reserve supply of water. Should there be a need for additional water, this shall be drawn up from the cistern and pumped into the overhead tank.

Water will be delivered via pipelines to Nalé households and shall be done using gravity. This means that homeowners will have no need of booster pumps or other mechanical equipment to get their water. Neither will they have need for their own overhead water-storage tanks.

This canny use of gravity does more than lower the cost of providing a clean and safe water supply to Sandari Batulao residents—it also lowers the community’s carbon emissions by removing the need for pumps that consume electricity, as well as saves space that can be allocated to gardens and greenery in each home lot in the development area.

Clubhouse and more

These infrastructure projects are merely the beginning, Hilario said, adding that, within the first quarter of 2011, work will begin on the Nalé clubhouse.

The clubhouse will stand on a lot measuring 9,000 square meters, or almost a hectare, close to the cool waters and sculpted rock walls of the Calamias River. The sprawling clubhouse will follow the architectural style known as Modern Tropical Asian, an architectural fusion of Philippine, Thai and Balinese influences.

This clubhouse will sport a high, pitched roof in earthen colors with finials or low spires placed atop it, roof embellishments that echo the indigenous structures found throughout Southeast Asia. The extended eaves of the clubhouse roof are also an architectural trait common in Philippine architectural designs and the clubhouse floor will be randomly lined with stones, evocative of the bahay na bato (literally, houses of stone) structure that is distinctly Filipino.
This one-floor clubhouse will be equipped with a library, function hall, game room and gymnasium. According to Hilario, it is designed to enable Nalé residents to hold gatherings, large or small, to enjoy celebrations of life, like intimate dinner parties or grand debuts for daughters who have come of age.

Hilario said more infrastructure projects are lined up for Sandari Batulao in the near future, for CPMC has pledged to build a residential township that truly provides the joys and pleasures of mountainside living. More than just the embodiment of the Filipino dream, the homes that arise from the foothills of the mystical mountain called Batulao are the structures that embody CPMC’s character as a company that brings all good things from the Philippines and puts it on the global map in a very good way.

*Suarez is associate editor of Batulao View magazine.

Strong inflow surprises BSP

By Lawrence Agcaoili (The Philippine Star) Updated December 27, 2010 12:00 AM

MANILA, Philippines - The Bangko Sentral ng Pilipinas (BSP) was surprised with the strong capital inflows that continue to flood emerging market economies particularly the Philippines but is ready with its enhanced toolkit to prevent the build up of inflation pressures.

BSP Deputy Governor Diwa Guinigundo said in an interview with reporters that foreign exchange inflows into emerging markets including the Philippines heigthened due to the debt crisis in Europe including the recent bail out in Ireland.

“In the case of the capital and financial account it is during this time that the European crisis was followed by the Irish problem and that is the reason why risk aversion even became even more pronounced. Therefore foreign exchange flows to emerging markets including the Philippines even heightened,” Guinigundo said.

He also cited the second round of quantitative easing (QE2) being implemented by the US Federal Reserve to stimulate its sluggish would further translate to higher capital inflows into emerging markets. The US Fed announced it would buy $600 billion in long-term Treasuries over the next eight months and at the same time reinvest an additional $250 billion to $300 billion in Treasuries with the proceeds of its earlier investments.

The country’s balance of payments (BOP) surplus surged to hit an all-time high of $13.17 billion in the first 11 months of the year from $5.206 billion in the same period last year while the gross international reserves (GIR) — the sum of all foreign exchange flowing into the country — surged 39 percent to hit a new record level of $61.3 billion from $44.17 billion.

“This means that for the last two months of the year the BOP surplus even strengthened due to stronger performance of those structural flows like exports, remittances, business process outsourcing, and foreign portfolio investments,” he added.

Net inflows of foreign portfolio investments or “hot money” into the Philippines hit a new record level of $4.18 billion as of end-November or almost 10 times the net inflow of $431.4 million in the same period last year and exceeding the full-year target of $2.9 billion.

Meanwhile, the country’s foreign direct investments (FDIs) retreated by 31.8 percent to $1.093 billion in the first nine months of the year from $1.603 billion in the same period last year due to the sharp drop in inflows of large equity capital.

On the other hand, remittances from overseas Filipino workers went up by 7.9 to $15.456 billion in the first 10 months of the year $14.23 billion recorded in the same period last year. The projected growth in OFW remittances was upgraded to 8.0 percent instead of six percent this year. In 2009, remittances went up by 5.4 percent to a new record level of $17.348 billion from $16.426 billion in 2008 and exceeded the revised four percent growth forecast set by the central bank.

Last October, the BSP’s Monetary Board approved certain amendments to the Manual of Foreign Exchange Transactions as part of the central bank’s efforts to keep the foreign exchange regulatory framework responsive to and attuned with current economic conditions and at the same time help temper the strengthening of the peso against the greenback with a minimal impact on domestic liquidity and inflation.

The central bank’s policy-setting body agreed to double the present ceiling on the amount that residents may purchase from authorized agent banks for outward investments including investments in Republic of the Philippines bonds and other debt instruments issued by the Philippine government to $60 million from $30 million.

It lifted the registration requirement for outward investments in excess of $60 million limit and replace this with reporting to the BSP and at the same time extend the periods for inward remittance and conversion to pesos or reinvestment of proceeds and related earnings to 30 banking days from two and seven days.

Likewise, the limit on over-the-counter foreign exchange purchases by residents from banks without documentation for non-trade current account purposes was also doubled to $60,000 from $30,000 to encourage customers to course their transactions through the banking system instead of the unsupervised foreign exchange market.

On the other hand, non-resident tourists or balikbayans could reconvert at airports and other ports of exit without need for proof of sale of foreign exchange for pesos was increase to $5,000 from the present ceiling of $200.

It also raised to $1 million from $100,000 the amount residents could purchase from banks to cover advance payment requirements for import transactions without prior BSP approval and at the same time allowed the private sector to prepay BSP-registered foreign loans to be funded with foreign exchange from banks without prior approval.

“The challenge really is to increase demand for foreign exchange and temper peso appreciation,” Guinigundo said.

Monetary authorities vowed to continue the use of an “enhanced toolkit” to deal withs the ongoing surge in capital flowing into emerging markets including the Philippines from developed economies led by the United States.

The elements of the BSP’s “enhanced toolkit” include the buidling of gross international reserves (GIR), the appreciation of the peso against the US dollar, the prepayment of the country’s foreign debt, and the third wave of reforms in the foreign exchange regulatory framework.

Special seminar tackles BIR, SEC developments

By Donnabelle L. Gatdula (The Philippine Star) Updated December 27, 2010 12:00 AM

MANILA, Philippines -Maximize the benefits granted by law and ensure compliance while minimizing possible tax exposure, assessments and unnecessary penalties by attending this special seminar titled “New Year Tax & SEC Updates” on Jan. 20 & 21, at the EDSA Shangri-La Hotel, Mandaluyong City.

Lawyers can get Mandatory Continuing Legal Education (MCLE) accreditation from the integrated Bar of the Philippines and accountants Continuing Professional Education (CPE) accreditation from PICPA.

This public information campaign is organized by the Center for the Global Best Practices (, Manila tel. 8427148/59/5568968/ 69; Cebu (032) 5123106/07).

Be aware of the most recent developments from the Bureau of Internal Revenue (BIR) and the Securities and Exchange Commission (SEC). This two-in-one seminar is a one-stop-shop event that will give you a comprehensive update on the new laws, court rulings and decisions, and latest memorandum orders and policies of these two regulatory agencies in the past year up to the present. The lecture will also include question and answer segments where problems encountered by businesses can be addressed and remedial actions can be taken.

Lecturer is Edwin Abella, CPA-lawyer. He finished his Masters of Taxation at the Harvard Business School (Thomas Jefferson scholar, 1995) and is a known expert tax practitioner who currently holds the rank of assistant commissioner in the BIR. He is also the chairman of the suggested answers committee to the bar exams in taxation, a bar examiner in 2009 and bar exams reviewer in UP and other prestigious law schools.

Puregold sets aggressive expansion plan for 2011

By Zinnia B. Dela Peña (The Philippine Star) Updated December 27, 2010 12:00 AM

MANILA, Philippines - Puregold Price Club Inc., one of the country’s fastest-growing hypermarket and supermarket chains owned by Filipino-Chinese businessman Lucio Co, is embarking on an aggressive expansion program next year to build 35 new stores.

In a filing with the Securities and Exchange Commission (SEC), Puregold said it is slated to open 15 branches within the first half of 2011. The company has grown significantly since it commenced operations from one store in 1998 to 51 stores in 30 cities as of Sept. 30, 2010 throughout Metro Manila and Luzon.

The existing branch network consists of 38 hypermarkets with an aggregate net selling space of 179,060 square meters, 12 supermarkets under Puregold Junior brand, and one mini-mart called Puregold Extra.

Leveraging on the success of its retail and wholesale model, Puregold intends to establish presence in the largely underserved Visayas and Mindanao markets beginning 2012. Store openings are planned in Iloilo, Negros Occidental, Leyte and Cebu as well as in Cagayan de Oro, Davao City and General Santos City.

In selecting sites for opening its stores, Puregold aims to be the first store in markets that it believes have a high customer potential.

As part of its expansion plan, the company has entered into a total of 20 leasing agreements for its new stores to be opened in 2011 in various parts of the Philippines. These new stores are expected to provide 73,058 square meters of additional net selling space.

Funding for its expansion will come from a planned initial public offering (IPO) estimated to raise up to P11.2 billion.

The company plans to offer as much as 700 million common shares (including a greenshoe option) through a primary and secondary offering at a maximum price of P16 apiece.

The offer, which will account for 36 percent of the firm’s outstanding stock after the IPO, consists of up to 500 million primary shares and 100 million existing shares to be issued by the selling shareholders. The company is allotting 100 secondary shares for the overallotment option in case of strong demand.

The company said it has an option to sell 100 million more shares depending on market demand.
The Hongkong and Shanghai Banking Corp. Ltd. is the international lead manager while BDO Capital & Investment Corp is the domestic lead manager for the share issue.

The shares will be priced by March 2 while the offering for small investors and the domestic market will run from March 8 to 15. Listing of the shares is targeted by March 21.

Investments in ecozones seen to expand by 10% in 2011

By Ma. Elisa P. Osorio (The Philippine Star) Updated December 27, 2010 12:00 AM

MANILA, Philippines - Investments in the country’s ecozones are expected to grow by 10 percent to P225 billion as more foreign electronics and manufacturing firms are seen to locate in the Philippines, the Philippine Economic Zone Authority (PEZA) reported.

In an interview with reporters, PEZA director general Lilia B. De Lima announced that their target for 2011 is to grow investments, exports and employment by 10 percent.

“We want to be conservative because we are coming from a very high base. The target is 10-10-10 which means 10 percent growth in investments, employment and exports,” De Lima explained. This figure is slightly slower than the growth recorded this year.

“There will be a tapering off of investments because we already got the big ticket investors,” De Lima said.

Investments this year grew by 17 percent to P204 billion from P175 billion in 2009. “This is the highest investment since 2001,” De Lima said.

“We are coming from a very high base. When others were posting a decline last year we had a growth,” De Lima noted.

For this year, she said they have exceeded their target of 15 percent growth because of the continued confidence of PEZA locators. Projects approved were 518 from the 502 a year ago.
Meanwhile, employment and export data was only for November because they receive the data a month late. De Lima said that average direct employment generated grew by 20.12 percent to 728,318 from 606,350 while export sales grew by 24 percent to $37 billion from $30 billion a year ago.

Earlier, the government announced they will be removing income tax holidays (ITH) of international firms whose countries have existing tax treaties with the Philippines. At the same time, the government said they will be stricter in giving incentives to companies catering to the domestic demand.

Trade Secretary Gregory L. Domingo explained that firms in countries with tax treaties are not so sensitive to ITH because he said that whatever income tax that is unpaid here will be paid in their home country.

Domingo said they will be stricter with the incentives they dole out to firms catering to domestic demand as opposed to export oriented companies. Domingo said that firms that export can easily move to another country that is why there is a need to give sweeteners to them.

Property Market Overview 2nd Quarter 2010


Property Indicators: Encouraging Macro Numbers
• GDP grew by an impressive 7.3% during the first quarter of 2010 due to the improvement in investments and government expenditures. Consequently, the government’s full-year GDP growth forecast was raised to 5% to 6% from the previous 2.6% to 3.6%..
• Implied land values remain broadly unchanged. Expectations point to slight upward adjustments over the second half of the year due to continuing demand for well located development properties.
• Tracking the decline in project launches last year, HLURB Licenses to Sell continue to underwhelm, with total number of issued licenses down by 35.4% during the first four months of this year.

read more click here:

Saturday, December 25, 2010

Group of entrepreneurs venture into real estate

By Ehda M. Dagooc (The Freeman) Updated December 11, 2010 12:00

CEBU,Philippines- A group of Cebuano entrepreneurs, most of whom are engaged in the construction business, have pooled their resources together to build a 17-story mixed use medium-rise building at the Cebu Business Park, to be called “Apple One Tower.”

This is the first project of the Apple One Properties Inc., to jumpstart the company’s plan to take advantage of the country’s fertile real estate industry may it be in residential or commercial development.

The Apple One Tower located adjacent to the Cebu City Marriott Hotel, will provide a total of 46 units of commercial spaces that are geared towards attracting the Business Process Outsourcing (BPO) companies, while providing a limited 18 units of residential condominium facilities.

In an interview with Apple One Properties vice president for operations Yvet V. Andalis, she said that the building will be completed in the next 18 months, while the company is currently negotiating for companies to transfer immediately after the completion.

Its condominium units, which are also positioned for high-end clients, are also getting strong interest specifically from expatriates and BPO executives that are based in Cebu.

Despite the entry of seasoned and well established names in real estate developments announcing their multi-million-peso condominium projects within the 52-hectare CBP, Andalis said Apple One Tower will have its advantage because it will focus on office and commercial leasing business.

“We only have limited residential units,” Andalis said adding that the company is not competing with any developer within the PEZA-accredited business park. Instead the project is complementing to provide wide-choices for customers to get commercial space and residential units within the area.

“Everybody is expanding. We need to provide them with spaces,” she said.

The P500 million Apple One Tower is largely banking on the robust BPO sector in Cebu, following its proclamation being the 8th emerged destination as BPO destination in the world.
This early, Andalis said the company is already negotiating with several BPO companies, like animation studios, and other outsourcing firms.

In the ground floor of the building, the company will dedicate the commercial spaces to financial institutions like banks, and insurance companies.

Following the formal launching of the project held recently, the company has started its pre-selling activities for its residential condominium units, that are priced from P4 million to as high as P8 million, depending of the floor-area size and number of bedrooms.

According to Andalis, the company led by Cebu-based Ven Ray Construction, which also part-owner of several several real estate properties in Cebu including Diamond Suites, Apple Tree Suites, BoardWalk City Residences at the North Reclamation Area, among others, is also planning to invest on more projects soon, in Metro Manila and in Cebu.

Tourism industry to fuel Cebu's economy in 2011

By Ehda M. Dagooc (The Freeman) Updated December 20, 2010 12:00

CEBU, Philippines - One of the much anticipated highlights of 2011 will be the performance of Cebu’s tourism industry as it is expected to drive the province’s economy, like never before.

Local economist Perry Fajardo said that the trend of tourism now “is not normal” anymore, as it is picking up and is expected to strengthen next year, unless a major calamity or crisis will hit again.

Fajardo said as Cebu has already established its name in the world market as preferred business and leisure destination, it is going to benefit from the recovering interest of international travelers around the world.

“Tourists have money. Travel goes with higher income market. The world’s recovery is giving the wealthy travelers a new life,” said Fajardo.

Aside from Business Process Outsourcing (BPO), tourism is one of the sectors that will be watched out for beginning next year. Thus, any business related to tourism, is expected to make money—whether big or small.

However, this opportunity should be complemented with right infrastructure, and offerings in order to accommodate the growing market, and that introduction of eco-tourism should be started immediately.

According to Fajardo, the Local Government Units (LGUs), should make tourism a big income generator starting next year, that’s why investment on tourism related facilities, and infrastructure should be started.

Cebu now needs additional attraction and activities, otherwise, tourists have nothing to do here, after one or two days stay. Aside from beach and City tour, other destination options should be offered, and these are the offering of diverse eco-tourism packages.

The far-flung towns in Cebu, should start to do its home work now and be ready for the “tourism boom” in their locality, while tourists are now looking for more exotic destinations to go to, and these are found in the different towns and localities around Cebu province.

Although, Suroy-Suroy program is an effective tool, Fajardo reiterated his call to make the program sustainable, meaning attractions and activities should be ready all the time, whenever tourists come to visit.

Organized trip to different towns, and eco-tourism destinations should be promoted. According to Fajardo Cebu has more to offer, more than just the beaches, Magellan’s Cross, Taoist Temple.
He said there are a lot of eco-tourism attractions in different towns in the province, that are not being promoted, and travel operators do not know about. LGU executives should be empowered to see the wealth in their home-ground and start to capitalize them.

Unlike the BPO, tourism sector generates more employment, business opportunity across market segment and population groupings. In Cebu City, tourism entrepreneurship is a good venture to start with by next year.

Fajardo, who was the main speaker during the joint post 2010 economic briefing hosted by the Cebu Business Club and Mandaue Chamber of Commerce and Industry (MCCI), said that the key to sustain the growth and maximize the growth of tourism in Cebu by 2011 are the LGUs. (FREEMAN)

Shift in consumer attitude fuels retail boom in Cebu

By Ehda M. Dagooc (The Freeman) Updated December 24, 2010 12:00

CEBU, Philippines - What was considered as an artificial retail boom in the first half of 2010 due to the election season, was surprisingly sustained all throughout the year, a testament that the perceived global crisis has not hit the bottom ground of the consumers’ pockets.

Philippine Retailers Association (PRA-Cebu) chairman Jonathan Jay P. Aldeguer said that the year 2010 has given the retailers’ a glimpse of a more lucrative business ahead, while performance of most retail chains have continued to post encouraging performance even after the election money was gone.

However, the retail sector in Cebu has seen another facet of consumer attitude brought about by the social networking phenomenon. Christmas season shopping came in so late, compared to the traditional busier November to December retail trade.

Aldeguer said people now shop in the ninth-hour for Christmas shopping unlike in the past, “it is because people have a lot of activities today than ever. We have seen the most number of [school] reunions due to facebook—making people busier with so many activities to attend to, putting shopping as the last priority.”

According to Aldeguer, the sluggish Christmas shopping performance of the new generation of consumers was not because people don’t have money, “but because “people’s attention now is divided.”

Although, the general observation in the retail industry for 2010 was good, compared to the last few years, Aldeguer said there are also stores that registered flat growth, while others are enjoying the active consumer market.

The volume of spending mostly goes to food, specialty shops, and whoever has been able to hit the attention of the consumers. Meaning, no matter what the retail outlet is selling, what is important is retail business should employ a continuous marketing and innovation.

It’s hard to identify though, the retail segment winners for 2010 Aldeguer said. What is clear is that those stores which continually adopted innovation, aggressive marketing investments, are the ones which also performed well.

Cebu’s consumer community has continued to be active, as if “money is not a problem” for most of them, Aldeguer said. Moreover, the increased number of tourists that visit Cebu all-year-round has fueled the retail performance all the more.

What is interesting now, with the changing consumers’ culture, is that “it’s no longer enough to have a good product alone.” What is more important now is making the “good product” be present all-the-time in people’s mind. This means, that spending into advertising in different medium channels is a compulsory requirement now—more than ever.

“The attitude of the consumers now has changed dramatically. The reaction is so fast. The social networking has also gained importance in shaping the consumer’s preferences. Blogs have entered into the picture and generate significant impact,” Aldeguer said.

Initially, retail players here projected an unpredictable and highly sensitive performance towards the second half of 2010, as the first half’s good growth figure was largely due to the election spending.

“The consumer spending seems to be up in the second semester of this year, maybe this is because of positive outlook of the market towards the new administration,” said Philippine Retailers Association (PRA-Cebu Chapter) president Melanie C. Ng.

Usually, she said the first few months of second half of every year, is considered as lean months for most retail players, however, the dynamism has sustained up to this time.

However, despite the positive outcome on retail sector, Ng said players are remained cautious in their operations, while the attitude of buyers now are constantly changing and highly sensitive on pricing movements, value added offerings and customer service programs.

Bringing up price of any consumer good is the last thing to be implemented by retail players now. Despite the active market, retailers are still “tightening their belt” in increasing profitability.
In fact, the game now is competing on value added services and good customer service, Ng said.
“We are very cautious on increasing our prices in any consumer good, unless it is already needed. The consumers’ buying attitude now has changed, providing value added services to customers is now the top priority,” Ng said.

Last year, the Cebu retail sector grew in a low-double-digit figure, Ng hopes that this year, the industry will hit the high double digit growth.

According to Ng, the retail sector in Cebu which dynamism is fueled by the increasing investments and employment generation of Business Process Outsourcing (BPO) and sustained growth of OFW (Overseas Filipino Workers) remittance is on its way to take full advantage of the recovering world’s economy.

Also, the sustained growth in tourism has also helped the retail industry in Cebu alive, despite the global economic challenges.

Although, she said the current performance is still incomparable to the pre-crisis levels.
In general, Ng said Cebu still offers a fertile ground for retail businesses, provided that retail players are willing to sacrifice a very thin profit margin, and put their focus on providing good service and quality products to consumers. (FREEMAN)

2010 marks the entry of huge real estate developers in Cebu

By Ehda M. Dagooc (The Freeman) Updated December 24, 2010 12:00

CEBU, Philippines - The real estate industry in Cebu has never seen its peak until 2010. The year 2010 marks the entry of the biggest real estate developers in Cebu's soil to take advantage of a golden opportunity, the local capitalists meanwhile took the initiative of bracing itself to join the bandwagon.

From developing mid-rise to high-rise commercial buildings, hotels, condominiums, spawning mixed-used developments and horizontal residential projects were formally announced this year from the giants to the smallest real estate developers in the Philippines.

Cebu has gained the attention of the country’s top developers, where billions of pesos had been allocated to change the landscape of the Queen City of the South—making it a truly world-class urban center.

Established developers such as SM Prime, Filinvest, Ayala Land Inc., and Aboitiz Land Inc., among others are just a few of the dozens of real estate capitalists in the Philippines that officially announced their keen interest to pour investments in Cebu's real estate sector.
With limited availability of land in the Island Province, developers have opted to build high-rise buildings for condominiums, commercial and BPO facilities, shopping malls, hotels, and re-creation centers.

The most awaited development which was announced in the middle of this year, is the conversion of the 30-hectare lot at the South Road Properties (SRP) for a mixed-used development of the SM Prime Holdings, which include the establishment of one of the world’s largest malls in Cebu.

Hans Sy, SM Prime Holdings president said that the company will spend at least P20 billion of the development of the SRP lot in the few years, of which planning and construction activities started in the latter part of this year.

According to Sy, Cebu’s well-managed economy is one of the reasons why the company has put its money here.

“We are confident of how the whole Cebu is being managed. We are going to duplicate in Cebu what we’ve done in Manila,” he said.

Gotianun-led Filinvest Land Inc. (FLI) started its P25 billion project also at SRP this year, with the introduction of Citta di Mare or “City by the Sea”, which is a joint venture project with the Cebu City government.

FLI’s Citta di Mare is a master-planned community that intensifies the attraction-wealth of Cebu—the resort living.

Aside from the 12 thousand to 15 thousand condominium units that will be constructed, the development will also construct integrated facilities, such as commercial, waterfront lifestyle strip, and a residential cluster, among others.

Creating a City within Cebu City at the SRP is what will be expected in the next 15 to 20 years.
This early, the company has already established a good network of marketing channels to attract condominium investments from abroad. This is to target the wealthy foreigners and even the Filipinos’ working and residing abroad.

The original plan is to build a total of 60 mid-rise buildings within the property. These buildings will provide thousands of condominium units that will re-enforce Cebu’s position as the second home destination.

Cebu promotion stakeholders such as the Cebu Investment and Promotion Center (CIPC) is presently formulating a good and effective promotional campaign to push Cebu’s potential as a second home alternative for foreigners.

CIPC managing director Joel Mari S. Yu earlier announced that CIPC and the real estate and tourism sectors in Cebu will together formulate a roadmap in making Cebu as an International “Second Home Destination” in the world.

Selling condominiums to foreign national buyers is the easiest way as it does not restrict them from owning one. Owning a land property on the other hand, requires foreigners to have a legal linkage with a Filipino partner, in most cases (for residential purposes)—a Filipina wife.
In June of this year, Ayala Corporation chairman and chief executive officer (CEO) Jaime Augusto Zobel de Ayala expressed his confidence of Cebu’s real estate sector, saying country’s giant conglomerate will advance its presence Cebu’s real estate landscape, disclosing interest to buy more lands in the province.

Zobel said that the company’s interest through its various subsidiaries in real estate development group led by ALI will be magnified here.

The recent launching of its two high-rise commercial and residential projects at the Asia Town IT Park,-the Avida Towers and the eBloc2 will kick off its move to further change the urban landscape in Cebu.

Towards the end of this year, two brands of ALI officially announced its entry to Cebu—these are the Alveo, and the Ayala Land Premier. These two ALI brands will build condominium buildings targeted to different market segments.

AboitizLand Inc. on the other hand, announced to launch at least two to three projects by 2011, mostly are into residential and commercial condominium facilities.

Newly established real estate company Innoland Development Corporation recently announced its P1 billion investments for the “The Calyx Center”, a 26-story building will offer over 200 residential and commercial condominium units that will target the growing mobile professionals and technology workers in Cebu.

Residences, the residential component of AmiSa, a five-star leisure resort community in Punta Engaño, Mactan, Cebu.

The property development arm of the J. King and Son Inc., Fuente Triangle Realty Development is also currently building more condominium properties in Metro Cebu, including its condo-tel projects around the country.

Aside from these developers, there are also a growing number of new entrants in the real estate sector in Cebu, taking advantage of the booming real estate business here.

New entrant Cebu Green Peaks Development Inc., recently launched the all-residential garden high-rise condominium project located on Molave Street in Lahug, this City. The project will provide a total of 165 units of one-bedroom, two-bedroom, and garden villas and suites.
Other real estate developers are also scouting good locations for countryside residential developments, to re-enforce Cebu’s positioning as a retirement and second home destination in the world. (FREEMAN)

BPO industry hits historical growth performance in 2010

By Ehda M. Dagooc (The Freeman) Updated December 22, 2010 12:00

CEBU, Philippines - As Cebu’s Business Process Outsourcing (BPO) industry gained international attention for the past few years, the year 2010 is deemed a historical year for the BPO sector in Cebu as it gears up to reach its maximum potential.

Following the Tholon’s announcement proclaiming Cebu as the 8th emerged BPO destination in the world, besting other cities in Singapore, India, and others, Cebu was able to prove itself as legitimate host for giant and multinational BPO industries.

Amid the lingering effects of the global recession, the BPO sector propelled Cebu’s economy in 2010, providing thousands of employment opportunities to Cebuanos, and other job seekers from neighboring provinces.

Cebu Investments and Promotions Center (CIPC) managing director Joel Mari S. Yu said aside from new BPO facilities that opened this year in Cebu, such as the second facility of Accenture, existing BPO firms have also expanded, thus the demand for more workers, and office spaces have surged during the year.

The dynamic growth of BPO in Cebu, has also paved the way for more investments in real estate, wherein capitalists poured in money to build medium to high rise buildings to accommodate the growing demand for BPO office space.

In the middle of this year, Norkis Group of Companies announced the conversion of its three-hectare property in Mandaue City into an Information Technology (IT) Park.

Norkis Group chairman Dr. Norberto B. Quisumbing told The Freeman in an interview that BPO is now the new “revenue generator” for the Cebu economy, and that the company is going to take advantage of the opportunity.

According to Quisumbing BPO is a good employment generator for the country in this generation.

“The reality is—BPO is here to stay,” Quisumbing said.

Likewise, the Cebu Property Ventures Development Corporation (CPVDC), the developer of the 25-hectare Cebu Asiatown IT Park in Lahug, declared its plan to build another mid-rise BPO building by next year, to accommodate the growing demand from potential BPO investors.
CPVDC president Francis O. Monera announced that the recent development of Cebu being declared as an “emerged” destination for IT and BPO will bring more interested investors here.
“We are planning to build another BPO tower,” Monera said adding that with the success of the eBloc2 Tower, which is occupied only by two BPO giants, the JP Morgan, and NCR.

CPVDC in partnership with Ayala Land Inc. (ALI) projects to complete the P1.4 billion eBloc2 project by the end of 2011.

Even before the eBloc2 is completed, Monera said plans of putting up the third eBloc facility at the park is already in the drawing board.
Part of the initial plan is to build a BPO enclave facility within the five-hectare remaining property. However, no exact timetable was given for the development.

Meanwhile, Aboitiz Land Inc. is going to develop its 15-hectare property at the Mandaue North Reclamation Area, to establish new integrated development in area that will include construction of BPO buildings, hotels, and residential facilities.

AboitizLand Inc. vice president for marketing and sales Manuel U. Arbues II announced that this project, which will start next year, is another commercial development to be introduced by the company, after the Mactan Export Zone II.

Although, the masterplan of the project is already completed, it is still subject to the company’s board approval.

This project is one of the two to three projects that will be introduced by the company in 2011, excluding the expansion ventures on its existing residential developments.

According to Arbues that company has to take advantage of the booming commercial real estate industry in the Cebu, specifically in providing more BPO-ready buildings.

Total seats established by the BPO firms in Cebu now count to almost 40 thousand. These can be utilized in a three-shift 24-hour cycle operation, which roughly provides employment generation of close to 100 thousand as of this year.

Yu said the economic recession in the United States and Europe have not at all affected the BPO sector in the Philippines, specifically Cebu, in fact, the crisis was a “blessing in disguise” for the BPO industry, as more US and European firms are now considering to outsourcing to save cost.
The Tholons announcement that put Cebu in the spotlight as an “emerged” destination for BPO investments, implicates the province’s double of triple growth of BPO sector in the next few years.

And as infrastructure and business environment have been proven to be world-class and already at par with global standard, Yu said human resource is no longer a problem, as both private sector and the government are working so hard to provide intensive and effective program of human resource development for BPO and high-value IT skills.

Although Cebu is still working hard to improve the quality of human resource supply to complement the growing interest of world’s BPO investors to Cebu, Yu said the BPO industry players, including survey firm Tholons, has seen Cebu’s capability to host the biggest names in the world’s BPO sector.

According to Yu, Cebu is anticipating a stronger interest from BPO investors around the world and that industry players with the help of theCebu City government will intensify its program to further develop the human resource pool. (FREEMAN)

The Jones Lang LaSalle Capital Markets Bulletin reveals investment volumes are increasing in Asia Pacific

SINGAPORE, December 3, 2010 – New research from Jones Lang LaSalle’s Capital Markets Bulletin reveals that investment volumes are increasing in the region. Direct commercial property transaction volumes for Asia Pacific amounted to USD 18.2 billion in 3Q10. Singapore was the top market mover in the third quarter recording a huge rise of 358% growth in investment volumes on several large transactions in 3Q10 and was the third biggest market behind Japan and Australia in terms of total investment volumes.Further improvements in business and investor confidence during the quarter supported capital values growth which increased in most of the monitored Asia Pacific markets. The Hong Kong (Central) and Beijing (CBD) markets posted increases of 8.7% q-o-q and 8.6% q-o-q respectively.

In Shanghai and Beijing investor sentiment remained buoyant with Asian buyers active in the market, underpinned by rental growth. Most Asian markets saw office market yields compress slightly by up to 30 basis points, with increased investment activity in Australia supporting tightening investment yields in both Sydney and Melbourne.

Stuart Crow head of Asia Pacific capital markets said, “as the market continue to stabilise, we are seeing more and more investors looking to pursue transactions. We will continue to see a further increase in these volumes to the end of this year, but the number of buyer’s versus sellers is likely to come back to more realistic levels next year.”

The report states that investors are likely to continue to be attracted to assets that offer good inflation protection by allowing continuous re-pricing of income streams, hotels and residential assets. Retail assets have been popular with investors in 2010, usually accounting for around 17% of total investment deals but this year reaching about 22%, this may be expected to continue into next year.

Dr Megan Walters head of research for Jones Lang LaSalle capital markets said, “we are seeing a rising interest from inter-regional investors who are looking at the differential in growth rates between Asia Pacific and the rest of the world. However, the constraint to increasing Asian investment volumes will be the limited availability of investment-grade assets. This is in part from the restrictions on land ownership place in some countries in Asia, for example on foreign ownership, and in part from existing investors unwilling to part with their hard-won Asian assets at a price buyers want to pay.”

“The outcome may be continued upward pressure on pricing up in major Asian cities, as yields become compressed compared to what one can achieve in mature markets such as London. The alternative for investors in Asia will be to look at the emerging markets and second tier cities. Next year’s investment volumes for Asia Pacific are estimated at around US$88bn, broadly 15% above the likely 2010 total volumes.” She said.

Making CRE Partnerships Work in Asia Pacific

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Global Market Perspective - Hotels outlook

Sustained upturn in 2011

Across the globe most hotel investment markets are exhibiting stronger-than-expected signs of recovery. Trading fundamentals continue to improve and investor confidence remains upbeat – setting the stage for a sustained upturn in 2011. For the full year 2010, we are now anticipating transaction volumes to increase by approximately 85% over 2009 to finish the year at US$17-18 billion*, substantially higher than our previous forecast of US$12-14 billion

Barring any unforeseen circumstances, we are expecting another year of substantial growth in 2011. In the latest November 2010 edition of Jones Lang LaSalle Hotels’ Hotel Investor Sentiment Survey (HISS), market optimism is reflected in the notable increase in investor expectations for global short-term trading (+10.9% to 11.7%), with positive short-term trading now expected in 61 of the 97 markets tracked. Yield requirements have also continued to firm up over the past six months, with capitalisation rates falling 50 basis points to 8.3% and leveraged IRRs falling 110 basis points to 17.0%

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Global Market Perspective - Corporate market conditions

Divergence – the underlying theme

Divergence will be the underlying theme among corporate occupiers for 2011. There will be increasing divergence in the favourability of global market conditions as shown in our Global Market Conditions Matrix; in conditions within individual markets, particularly between core and secondary sub-markets; in the growth trajectories and strategies of corporate occupiers from different sectors; and in the routes that occupiers adopt to bring new order to their portfolios, manage the twin pressures of growth and right-sizing, and to engage with the market.

Global Market Conditions Matrix, 2011-2013

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Recent key retail real estate transactions

Asia Pacific

Australia, Ayers Rock
The Ayers Rock Resort has been sold for A$300 million (circa US$300 million) to the Indigenous Land Corporation. The resort is the country’s largest accommodation asset, and the sale represents one of Australia’s largest-ever single asset hotel transactions.

Australia, Brisbane
Westscheme, a A$3.2billion (US$3.2 billion) superannuation fund, has disposed of its ownership interests in Brisbane Square for A$300 million (US$300 million) to the Charter Hall Core Plus Office Fund and Telstra Super. The price of this ‘A’ grade commercial office tower located in the CBD reflected a 6.6% yield.

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Asia Pacific investors confident of higher returns

Investors are expecting higher returns over the next 12 months
Net buyers dominate with developed economy cities top choice
EMEA based investors prefer core, US based investors prefer
core plus upwards. Asia investors spread across risk curve

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A market of trophy and trauma

The two-tier real estate market will persist in 2011 and movements in asset prices will be strongly differentiated according to product type, quality and location. Robust competition for trophy assets in the world’s high order business hubs will continue to push up capital values, with London, Paris and Moscow offices expected to achieve double-digit prime capital appreciation in 2011. In major Asia Pacific cities, prices may be forced up beyond usual risk return capitalisation rates, particularly when compared to levels that can be achieved in more mature markets such as London. The top-end of the Tokyo, Hong Kong, Singapore and Shanghai office markets is forecast to record 10-20% capital appreciation during 2011. Virtually all Tier I Americas office markets have seen positive movement in capital values during 2010, a trend that will continue into 2011, but at a decelerating pace. Substantially less scope for prime-end yield compression in 2011 than in 2010 will be behind this dynamic.

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Global Market Perspective - real estate market overview

Asia Pacific leading the real estate upswing

Activity in the world’s major commercial real estate markets is expected to continue to strengthen during 2011, building on the footholds established during 2010. The recovery, however, will be segmented by product type and geography, with prime property continuing to perform better than secondary, Tier I cities outperforming Tier II and III cities, and Asia Pacific leading the upswing, ahead of Europe and North America.

click here for chart

More churn by corporate occupiers

Office leasing volumes in 2011 are projected to be at their highest level since the Global Financial Crisis, with corporate occupiers displaying greater confidence to do deals. Higher churn will be helped by improved corporate profitability, but occupiers will continue to push for the best possible terms and to strive for cost efficient space. Their focus will be on better grades of space, leading to the eventual release of poorer quality second-hand property, which could potentially overhang the market for several years.

In Asia Pacific, strong economic conditions and business confidence will boost office take-up in 2011. Relocation and upgrading are likely to underpin the bulk of demand, although with stronger hiring activity in markets such as Hong Kong, Singapore, China and India, expansion demand is expected to accelerate as corporate occupiers equip themselves for future growth. Net absorption across Asia Pacific’s Tier I office markets is projected to reach a record 4.5 million square metres in 2011, almost double the 2009 level and about 10% higher than the previous peak in 2007. Tier I markets in India and China will see the highest net absorption rates, enhanced by rapidly-growing domestic corporate sectors and expansion by multinational corporations (MNCs).

In both Europe and the US, take-up levels are expected to rise modestly on 2010 levels. Overall, net absorption is likely to remain flat, although some core Tier I office hubs could register relatively strong absorption rates. German, Nordic and CEE markets will also see strengthening demand. Conversely, most Tier II cities, suburban and Grade B segments will continue to languish with levels of demand well below trend. A fully-fledged and sustained recovery in demand across Western Europe and North America will not materialise until there is real and consistent jobs growth in office-using sectors.

Vacancy rates trending down, but markets polarising

Overall office vacancy rates will gradually trend downwards during 2011. In Europe and the US, new office deliveries are near historic lows and commencements are few and far between. This dynamic will intensify in 2011, leading to increasing shortages of Grade A space. Most markets are still without speculative development finance and although injections of funding have been seen in London, they have been focused on trophy tower schemes. A supply gap is likely to emerge in many markets, with refurbishment and ‘green’ retrofits a logical strategy to exploit the lack of new build. The market will increasingly polarise, with shortages of Grade A space and rising volumes of vacant secondary space.

By contrast, Asia Pacific will reach the peak of its development cycle in 2011 with a record additional 6.8 million square metres of office space to be delivered. Nonetheless, strong corporate occupier demand will absorb much of the additional space and, in most markets, vacancy rates will not rise significantly. The exceptions will be some Indian and Chinese cities, and to a lesser extent Singapore, where large supply pipelines will force up vacancy rates. In markets such as Hong Kong, Tokyo and Sydney, limited supply combined with strengthening demand should see vacancies trend downwards.Several major office markets in Latin America including Sao Paulo, Rio de Janeiro, Santiago and Panama City still feature vacancy rates near or below equilibrium levels. With strong demand from MNCs for the highest-quality space, many of these markets have chronic shortages of premier-grade offices. However, the construction pipelines are well-stocked and, while much of it will be absorbed, there is a risk of overbuilding in certain geographies over the short to medium term.

Double-digit rental growth for trophy assets

Many of the world’s high-order office markets will be firmly in the rental upswing phase in 2011, with double-digit growth forecast for well-located trophy and Class A product in a number of markets. Strongest prime rental growth is projected for Hong Kong (at over 25%), followed by Moscow, Singapore, Tokyo and London (at 10-20%). Paris, Frankfurt and Sydney are also expected to register real (inflation-adjusted) growth, while rental spikes could begin to appear by the second half of 2011 in well-located trophy assets in some US gateway cities such as New York, San Francisco and Washington DC. Meanwhile, rental growth in China’s Tier I cities of Shanghai and Beijing is likely to moderate from the hectic pace of 2010. Residual declines will still be recorded in a few Tier I cities such as Seoul, Madrid and Dubai. Dubai has a significant overhang of vacant office space which will depress rents and take many years to absorb – prime office space is now available with a 50%+ discount on its 2008 peak.

Retail – a mature versus emerging market story

In most mature retail markets prospects for 2011 are mixed. Retailers remain cautious in the light of persistently high unemployment, the need to repair household balance sheets and concerns over the impact of austerity measures. Nonetheless, demand for space in prime locations and well-established malls will be strong, and many large cross-border retailers are back in expansion mode. Shopping mall completions will be at very low levels in 2011, which should support prime rents and, in the US, help to erode the excess inventory. Problems will persist in secondary locations, with vacancy rates in many countries showing little sign of receding significantly in the short term. Some mature markets are expected to outperform, notably where employment growth and consumer sentiment is comparatively healthy, such as in Hong Kong, Australia, Germany and the Nordics.

A combination of favourable demographics, robust economic growth and buoyant consumer markets in 2011 will continue to support dynamic retail markets in the ‘E7’ - China, India, Brazil, Turkey, Mexico, Russia and Indonesia. Most of these markets are now in the middle of a major development cycle, however strengthening retailer demand is expected to absorb much of the new stock. Demand for new mall space is expected to be particularly strong in China as international brands continue to open new stores. For 2011, the largest increases in retail rents are expected in Greater China.

Industrial – boosted by recovery in global trade

Industrial market fundamentals are anticipated to improve in 2011 on the back of trade and retail sales growth. An upturn in corporate occupier activity will be helped by the faster than expected recovery in global trade flows. The WTO has predicted global trade to increase by 13.5% in 2010, which would be the fastest year-on-year growth registered since records began in 1950. However, in general, rental growth prospects will remain subdued in 2011, with the industrial markets of Greater China and Singapore likely to show the strongest rental growth (of 5-15%). In the US, the industrial property sector still faces considerable slack from a demand overhang that has now lasted two years. Prospects for the US market in 2011 are expected to be relatively flat, although gateway ports and key distribution hubs will outperform. The industrial market in Mexico is rebounding strongly, as US manufacturers shift production south of the border.

Demand for logistics will be driven by structural changes in international supply chains, with corporate occupiers striving for efficiency improvements in order to contain cost levels. This will result in ongoing merger and acquisition activity, space consolidation and upgrading to modern stock.


Real Estate Outlook for 2011

The final 2010 edition of Global Market Perspective provides our view on the likely shape of commercial real estate markets across the globe in 2011. Over the next 12 months we expect to see a much greater divergence in real estate activity and performance and our top 10 trends for 2011 are:

Global direct commercial real estate investment volumes will rise by 25-35% on 2010 levels. A significant weight of equity capital will target real estate and fresh capital-raising will further enliven the market
Banks and servicers will adopt a more aggressive approach to the disposal of non-performing assets, leading to the release of more secondary product
The CMBS market in the US will continue to gather pace, but will remain well below pre-Crisis levels
Leasing volumes will be at their highest level since the Global Financial Crisis, with corporate occupiers displaying greater confidence to do deals - but they will continue to push for the best possible terms
Asia Pacific will lead the upswing in leasing markets, ahead of Europe and North America
Prime property will continue to outperform secondary. Expect double-digit capital value growth for trophy assets in many of the world’s high-order business hubs
Shortages of prime product in Tier I cities will encourage investors to widen their search to Tier II
Latin America will continue to build momentum, attracting strong corporate occupier and investor interest
A lack of available Grade A stock in many markets will start to limit relocation options for corporate occupiers
The domestic corporate sector will come to the fore in Asia Pacific, particularly in India and China


Global Market Perspective - global economy

Momentum continuing into 2011

The global economy is now more than 18 months into recovery and most forecasts point to the growth momentum continuing into 2011, although at a decelerating pace. The IMF expects the global economy to grow at a healthy rate of 4.2% in 2011, but it highlights several downside risks relating to global economic imbalances and potential volatility in financial, currency and commodity markets.

Global Real Estate Health Monitor

To see more detail hover over an indicator

General Trend: Worsening Neutral ImprovingNote: Chinese GDP YOY

A two-speed economy

Economic prospects are likely to be uneven in 2011, which will be reflected in greater divergence in real estate activity and performance. A subdued outlook for most advanced economies contrasts with a relatively strong year for many emerging economies, where over half of the world’s 2011 economic growth is expected to occur. Most advanced economies will still face major adjustments, particularly the need to strengthen household balance sheets, to stabilise and reduce public debt and to repair their financial sectors. As a consequence, economic growth in North America, Western Europe and Japan is projected to be muted, within a range of 1.0-2.5% in 2011. Moreover, ongoing periodic tensions in Europe, caused by the sovereign debt situation, will continue to unnerve the markets. Policy interest rates in most advanced economies are likely to remain low in 2011 and fresh stimulus measures, to boost flagging economic growth and ward off deflationary pressures, could further contribute to asset price inflation.

Asia Pacific - the star performer

In contrast, Asia Pacific is on a stronger foothold and will continue to outpace the world economy, with regional economic growth in 2011 expected to be in the 6-7% range (excluding Japan). Robust growth in both China and India of 8 - 9% will power the rest of the region. Hong Kong, Australia and Indonesia will also maintain healthy rates of expansion. There are some potential bumps in the road however - currency appreciation is a concern which could reduce competitiveness and affect trade and real estate capital flows. Asia Pacific is also facing inflationary pressures, which are pushing up interest rates across the region.

Latin America will continue to build momentum in 2011 with Brazil taking the lead. There are also bright spots in Emerging Europe, notably Poland and Turkey, while Russia is now rebounding. Higher oil prices are driving a recovery in some Middle Eastern economies, and there is increasing business interest in its two regional powerhouses, Egypt and Saudi Arabia.


Avoiding costly mistakes to cash in on boom

(The Philippine Star) Updated December 10, 2010 12:00 AM

Abarquez (third from left) with Jones Lang Lasalle Leechiu’s Project and Development Services team.

MANILA, Philippines - By 2014, an additional 4,000 hotel rooms will be coming onstream in Metro Manila, according to a study by global real estate services firm Jones Lang LaSalle Leechiu.

Among the firms seeking to cash in on a booming tourism market supported by government through tax incentives are the Raffles group which is putting up a luxury residence and all-suite hotel in Makati, the Fairmont Hotel which will be part of the Raffles complex, the Shangri-La group, Radisson Hotel, Holiday Inn, Ayala Hotels, Inc. among a host of other smaller players.
According to Lindsay Orr, chief operating officer of Jones Lang LaSalle Leechiu, developers new to the hotel sector are likely to pay a stiff price for mistakes made along the way as they learn the specific requirements of the industry. Orr recalls that just as it took some time for developers to master the needs of the BPO sector, the same process is likely to happen as more hotels and hospitality facilities are built out to meet the growing demand for tourist accommodations. Jones Lang LaSalle studies disclose that tourist arrivals have grown steadily from close to one million in 2003 to 3 million last year.

“There’s a tuition fee of sorts developers pay before they master the most efficient way to service a new sector,” says Orr, whose firm operates in 60 countries. Jones Lang LaSalle is a financial and professional services firm specializing in real estate. In the Philippines, the company operates as Jones Lang LaSalle Leechiu.

By offering potential clients best practices, lists of suppliers and other relevant data mined from other Jones Lang LaSalle offices in the Asia Pacific region with active and more mature hotel sectors, the company’s Project and Development Services Group hopes to help owners and investors minimize costly mistakes. Projects managed by Jones Lang LaSalle’s Hotel Project Services unit in the region include the Ibis Hotel in Singapore, the award-winning Cape Yamu in Phuket Thailand and Westin Hotel-Hyderabad, India.

According to Kiko Abarquez, project and development services group head, the unit offers advice on design, construction and risk management for firms constructing new as well as refurbishing old buildings.

Having done fit-outs for more than 300,000 sqm. of mostly office space in the Philippines, Jones Lang LaSalle Leechiu has developed a library of costs. This wealth of knowledge allows the company to manage costs effectively and, 95 percent of the time, meet the construction budgets of its clients. As project manager, JLLL Project and Development Services Group represents the client as it oversees and audits the various activities and products of architects, suppliers and the contractor involved in a project.

Abarquez explains that the aim of a project manager is “to match the designer’s requirements for looks with the client’s requirements for costs.” He relates that designers may not be familiar with all the materials available in the market and may perhaps suggest a wall to be covered with costly fabric when a paint treatment will achieve the same desired effect for less.

Among the innovations Jones Lang LaSalle Leechiu is currently introducing to the industry is a paperless project site with clients, suppliers and contractors all communicating through a website to be managed by the firm. Abarquez points out that significant delays are caused by poor communications and delays always have a cost. Plans and schemes written on paper for the approval of the client are likely to get stuck at a secretary’s or assistant’s desk. Things get misplaced in the paper shuffle and must be reconstructed. Because one supplier is late, another one cannot proceed with its work.

(The Philippine Star) Updated November 26, 2010 12:00 AM

MANILA, Philippines - Home developers have taken to the skies to meet the ever-growing demand for living space in a vertically challenged, so to speak, Mega Manila. While sophisticates prefer to unwind contemplating the city lights from the 40th floor of their posh high-rise dwelling, with glass of wine in hand, many still seek that sense of community and more breathing space. Mid-rise condominiums offer this advantage as they can be located within quiet residential villages without putting a strain on the community’s utilities.

True to its vision of offering Filipinos the ideal home that each one can afford, Vista Land, the country’s largest home builder, through its condominium development arm, Vista Residences, has built on years of experience to acquire a clear perspective of what house-hunting Filipinos seek. “Be it a sophisticated high-rise or a homier mid-rise development, whether you are a student, a single professional, a newly-married couple, a growing family, or a retiree--Vista Land has just the place for you in mind,“ affirms Red Rosales, division head of Vista Residences.

Vista Lakefront, a thriving, multi-community development center, houses the mid-rise Presidio, Vista Residences’ first inner city development. Together with communities of exclusive homes, high-rise dwellings and, in the future, an upscale corporate, commercial and leisure center, Vista Land envisions the area to be another important central business district. Within this sprawling setup, Presidio residents enjoy a self-contained, spacious, resort-like community that gives a sweeping view of Laguna de Bay and the Sierra Madre Mountains, wide pedestrian-only walkways, an open town square for dining al fresco, and a Sunday market.

Presidio offers residential and mixed-use structures comprising studio, one-bedroom and two-bedroom units designed for singles and young families, which can be bought as multiple units to create more spacious custom-designed residences. It also has a clubhouse, living and leisure facilities, home concierge and condotel services. The airy clubhouse enhances the resort theme, with its elegant all-white pavilion structure, wide windows and large, open doorways. There you’ll find a free-form swimming pool, a lobby lounge, social halls and function rooms, a fitness center, game room, meandering jog paths, barbecue pits, and private courtyards.

Presidio is all about modern secluded living but its accessibility is its most attractive feature, with public transportation going to Makati, Manila and Alabang close by, 24/7; and C-5 and the future C-6 to take you to the other important points in Metro Manila at half the time. It’s roughly a five-minute drive to Alabang Town Center, Festival Supermall and the Sucat Interchange. Via C-5, it is about 15-20 minutes to Makati and Bonifacio Global City, and 30 minutes to Ortigas. By the time C-6 along the Coastal Road of Laguna de Bay is completed, travelling further south is expected to speed up.

For more details on Vista Residences developments, call (63 2) 584 1182 or mobile 0917 857 6494 or log-on to

Township office projects promote sustainability

(The Philippine Star) Updated November 19, 2010 12:00 AM

Eastwood City is Megaworld’s pioneering and successful township project where people can live, work, play and shop 24/7.
MANILA, Philippines - Publicly listed developer Megaworld Corporation declared its township projects as a model program that promotes sustainability during the 1st Sustainable Building Technology Conference held last Nov. 11-12 at the SMX Convention Center.

In the presentation of its Sustainability consultant, Edmond Maceda, township developments were cited as a model for sustainable land use planning. According to Maceda, Megaworld’s townships promote “densification over sprawl” and transportation connectivity. A small township, at 50 hectares or less, promotes walkability from the home to the mall or office. It also has an abundance of public transport and depending on the project location, access to mass train lines.

Since the township residents are encouraged to live, work, play and shop in these compact urban centers, they individually consume less electricity and water, buy a lesser quantity of items and discard less trash and spend far less time in automobiles. Thus, by living in a compact city thousands of individuals make their contribution towards lessening greenhouse gas emissions, according to Maceda.

He identified four of Megaworld’s township projects where these benefits are now being realized: Eastwood City in Quezon City, McKinley Hill and Forbes Town Center in Fort Bonifacio and Newport City across NAIA Terminal 3. Soon, more residents will realize the benefits of township living in Manhattan Garden City at the Araneta Center and Cityplace in Binondo.

The township model will be replicated in Megaworld’s other upcoming projects, specifically Bonifacio Uptown and McKinley West, both also located in Fort Bonifacio.

Megaworld also shared its experience in sustainable property management, citing one of its office buildings as a case study. Its 1800 Eastwood Ave. office project, loaded with green building design features, won the ASEAN Energy Award in 2009.

The award-giving body noted the building’s lighting management features, elevator use, waterless urinals and collaborative efforts with tenants for electricity optimization. The building’s spacious lobby maximizes the use of natural lighting, thus, only a few fixtures are on at daytime.
Towards the end of his presentation, Maceda shared with the audience presentation materials from the International Green Building Conference in Singapore last year. He also encouraged them to browse through leading sustainability sites such as, and He also shared a link to the company’s corporate site: