Rental Growth Steady Amid Rise in Future Completions: Philippines

Research &
Forecast Report
PHILIPPINES
3Q 2015
Rental growth steady amid

rise in future completions
Julius Guevara | Director, Research and Advisory Services | Philippines
The Philippine economy recovered in the second quarter of

2015, growing by 5.6% after a slowdown in growth during
the first quarter. Out of the 5.6% growth, the services sector
contributed most with 3.5%, followed by the industrial sector with
2.1%; meanwhile the agriculture sector had a slightly negative
contribution of -0.5%. Government spending especially on public
construction is expected to drive growth even further in the
second half of the year until 2016, while election-related spending
is likely to support domestic demand until mid-2016. In the face
of slower growth due to a weaker global environment and the
effects of the El Nio phenomenon, major financial institutions
have already started to lower their end-2015 forecasts to the low
6% range.
Office
Delays in planned completions resulted in only four new office
buildings being completed in the third quarter, adding 45,431
sq m of net useable office space in Metro Manila. Colliers still
expects an all-time high 503,000 sq m of new office space by
the end of 2015. In the meantime, office rents in major business
districts in Metro Manila grew by an average of 1.8% during the
quarter, continuing robust rental growth seen since the start
of the year. However, estimated completions in 2016 and 2017
will also reach new heights, putting pressure on both rents and
occupancy levels. Transactions with lower net effective rents
compared to the headline rates have already been observed.
Residential
Only three projects in the major CBDs were completed during
the third quarter, with two other projects sliding in their
delivery dates. In the fourth quarter, an additional 2,381 units
are expected, bringing the total to 6,209 units in 2015. With an
average of 7,466 units to be delivered annually from 2015 to
2019, total expected inventory in the five major submarkets will
amount to 100,622 units. Despite the slowdown in deliveries,
vacancies have been observed to increase across the board due
to recent completions which are now being put into the market.
Rental rates for premium residential condos in the major CBDs
meanwhile continues to grow, increasing by around 1.5% in
the theird quarter. Should the completion of an unprecedented
13,400 units in the major CBDs by the end of 2016 materialize,
Colliers foresees a downward correction in rental rates by as
much as 5%.
Retail
The retail stock in Metro Manila surpassed six million sq m as of
the 3rd quarter of 2015, growing by 0.69% from the first quarter.
The new supply comes from expansions in fringe areas such as
the developments in U.P. Town Center (16,100 sq m) Robinsons
Novaliches (5,037 sq m), SM Center Sangandaan (Caloocan),
and Circuit Lane (Makati). All-time highs in new retail supply will
be seen in 2016, when over 720,000 sq m of leasable space are
scheduled to come online.
Market Indicators
OFFICE
RESIDENTIAL
RETAIL
2Q 2015
3Q 2015
Economic Growth Indicators

Economic Indicators
2007
2008
2009
2010
2011
2012
2013
6.10
6.00
6.50
8.40
3.20
6.40
7.50
5.78
4.2
5.0
Gross Domestic Product
6.60
4.20
1.10
7.60
3.90
6.80
7.20
6.11
5.0
5.6
Household Final Consumption

Expenditure
4.60
3.70
2.30
3.40
6.10
6.60
5.70
5.40
5.95
6.18
Government Final Consumption

Expenditure
6.90
0.30
10.90
4.00
1.00
15.50
7.70
1.70
1.71
3.90
(0.50)
23.40
(8.70)
31.60
8.10
(5.30)
29.90
5.40
11.56
17.40
6.70
(2.70)
(7.80)
21.00
(4.20)
8.50
(1.10)
11.30
6.42
3.67
Gross National Product

a
Capital Formation
Exports
2014*
1Q 2015*
2Q 2015
Imports
1.70
1.60
(8.10)
22.50
0.20
4.90
5.40
8.70
8.73
12.67
AHFF b
4.70
3.20
(0.70)
(0.20)
2.70
2.80
1.10
1.60
1.11
-0.55
Industry
5.80
4.80
(1.90)
11.60
2.30
7.30
9.30
7.90
5.52
6.15
Services
7.60
4.00
3.40
7.20
5.10
7.40
7.20
5.90
5.42
6.18
Average Inflation c
2.90
8.30
4.10
3.90
4.60
3.20
3.00
4.10
2.40
1.70
Budget Surplus/Deficit (PhP Bn)
(12.40)
(68.10)
(298.50)
(314.40)
(197.70)
(242.80)
(164.10)
(73.09)
(33.50)
47.30
PhP:US$ (Average)
46.10
44.70
47.60
45.10
43.31
42.09
42.45
44.40
44.45
44.98
Average 91-Day T-Bill Rates (%)
3.40
5.20
4.00
3.70
1.37
1.58
0.32
1.24
1.46
1.94
at constant 2000 prices

b
Agriculture, Hunting, Forestry, Fishing
c
at constant 2006 prices
*Revised figures
a
Source: Philippine Statistics Authority, Bangko Sentral ng Pilipinas, Bureau of Treasury
The Philippine economy rebounds to

5.6% growth
The local economy accelerated during the second quarter of
2015 growing by 5.6%, after a slower first-quarter rate of 5.0%.
A rebound in government spending (+3.9%) was observed
along with a robust performance in investments (+17.4%)
and household consumption (+6.2%). Government spending
especially on public construction is expected to drive growth even
further in the second half of the year until 2016, while electionrelated spending is likely to support domestic demand until mid2016. Together with most of the major economies in the region,
exports continued to decline (-3.7%), as weak external demand
particularly for exports of agro-based and mineral products
remained prevalent.
On the production side, the services sector remained the leading
growth contributor (+6.2%), followed by the industrial sector
(+6.1%). Majority of the growth contributors for the services
sector came from Other Services (not accounted, +9.0%); Real
estate, renting, and business activities (+6.8%); and Trade
(+6.1%). Conversely, the agricultural sector (-0.5%) had negative
growth as the effects of the El Nio phenomenon in several
provinces led to intense heat and the lack of irrigation for crops
during the quarter.
Despite the slight recovery, economic growth was still below the
5.7% target and lower than the 6.7% recorded in the same period
last year, as a consequence of weak global demand especially
from major trading partners, as well as the lower agricultural
production. Several institutions have already trimmed their
growth forecast for 2015, with World Bank lowering it by 70
basis points (5.8%), IMF by 20 basis points (6.0%), and Credit
Suisse by 30 basis points (6.1%); all in line with the downward
adjustment of 6-6.5% made by the National Economic and
Development Authority (NEDA). Nevertheless, the Philippines is

still among the highest performing Asian economies, after China
and Vietnam.
Banks maintained its tightening of real estate lending during the
third quarter due to the stricter oversight on their real estate
exposure, as reported by the Bangko Sentral ng Pilipinas (BSP).
However, lending to the property sector grew by 27% YoY to
PhP1.18 trillion, 65% of which are concentrated in commercial
real estate loans, and the remaining 35% in residential loans.
Non-performing loans (NPLs) in real estate further decreased
to 2.3% of the total real estate loan portfolio, most likely due to
stricter BSP monitoring to deter any potential property bubbles
from forming. Domestic consumption remained stable, although
OFW remittances as of August 2015 amounted to USD16.21
billion (4.1% YoY), rising less than the 6.0% recorded in the same
period last year.
OFW Remittancesa
Source: Bangko Sentral ng Pilipinas
Philippines Research & Forecast Report | 3Q 2015 | Colliers International
as of August 2015
Land values continue to rise amid

heightened development pace in the
CBDs
Land values in the Makati CBD accelerated in the third quarter
of 2015 by 2.43% to an average PhP463,700 per sq m.
Meanwhile, the rapid escalation of values in Fort Bonifacio has
somewhat tapered in the period, slowing by 1.52% to an average
PhP400,100 per sq m. Surprisingly, land value growth in Ortigas
Center outpaced the established districts, growing by 4.71% in
the quarter to PhP172,700 per sq m, owing to new developments
within and along the periphery of the district. Aside from the
new Estancia Township by Ortigas & Company, Megaworld and
Robinsons Land have unveiled plans for its respective Arcovia
City and Bridgetowne township projects along C-5, adding
pressure on land prices in and around Ortigas Center.
Land Values
Source: Colliers International Philippines Research
Comparative Land Values (PhP / sq m)

LOCATION
2Q 2015
3Q 2015
% CHANGE (QOQ)
3Q 2016F
% CHANGE (YOY)
Makati CBD
333,000 - 572,000
340,000 - 587,000
2.43%
357,000 617,000
5.09%
Ortigas Center
127,000 - 203,000
130,000 - 215,000
4.71%
135,000 -224,000
4.06%
Fort Bonifacio
277,000 - 511,000
281,000 - 519,000
1.52%
293,000 - 544,000
4.67%
Issued licenses for affordable housing

on the rise
As of August, total licenses to sell issued by the Housing and
Land Use Regulatory Board (HLURB) decreased by 15.35% to
237,697 compared to the same period last year. A drop in the
issuances of non-residential properties, mainly from memorial
parks and parking units, largely account for the overall decrease.
A noticeable shift from the previous year is the growing number
of new applications for the low income housing segments. The
number of licenses for socialized housing doubled as of August
2015 YTD from the same period in 2014 to 19,107 units. A
significant rise in applications for licenses was also seen in the
mid-income housing (+56.58%) and low cost condominiums
(22.18%). The price ceiling for economic housing was recently
raised from PhP1.2 million to 1.7 million by the Housing and
Urban Development Coordinating Council (HUDCC), but its effects
may not yet be seen as of this reporting period.
HLURB Licenses to Sell
Source: Housing and Land Use Regulatory Board
Applications for mid- and high-end condominiums on the

other hand have seen a similar decline, dropping by 13.1% to
42,700 units for the first eight months of 2015. Developers
have gradually been shifting to less expensive products such as
affordable horizontal projects in an effort to tap unserved housing
demand in these markets. Likewise, the significant number of
unsold condominium units has deterred developers from a wide
scale launch of new projects. Still, this mid- and high-end condo
segment accounts for the largest share of the total licenses
(17.9%) issued in the period.
HLURB Licenses to Sell

SEGMENT
Balanced Housing Compliance Units
JAN AUG '14
JAN - AUG '15
% CHANGE YOY
17,350
9,430
-45.65%
Socialized Housing
9,495
19,107
101.23%
Economic Housing
34,007
34,242
0.69%
Mid Income Housing
2,699
4,226
56.58%
Open Market Housing
18,702
15,822
-15.40%
Low-Cost Condominium
Mid- and High-End Condominium
Commercial Condominium
Farmlot
Memorial Park
2,124
2,595
22.18%
49,136
42,700
-13.10%
1,732
2,293
32.39%
40
123,446
91,378
-25.98%
-12.38%
Industrial Subdivision
202
177
Commercial Subdivision
216
302
39.81%
280,786
237,697
-15.35%
Total (Philippines)
Source: Housing and Land Use Regulatory Board
OFFICE
Makati CBD vs. Metro Manila Office Stock
Delays in completions pushes

projected end-2015 new supply
downwards
Four office buildings were delivered during the third quarter of
2015, providing an additional 45,431 sq m of net useable office
space in Metro Manila. Majority of the new supply introduced in
the quarter was comprised by Tera Tower (29,007 sq m) located
in Robinsons Lands Bridgetowne (project along C-5 Avenue in
Quezon City.
Several planned projects were pushed back in terms of
completions to 2016 and 2017, resulting in a reduction of around
50,000 sq m for the new supply forecast for the fourth quarter.
Still, Colliers expects around 503,000 sq m of new office space
by the end of 2015. If developer timetables are met, overall office
supply in Metro Manila will increase to 9.5 million square meters
by the end of 2018.
Vacancies remain low in established

CBDs for now
Office vacancy in the Makati CBD market rose slightly to 2.14%
during the third quarter of 2015 due to some vacancy increases
in Grade B buildings. While premium buildings continued to be
tight with a vacancy of 0.35%, Grade A office space improved
to 5.8% as leasable floors in the Alphaland Makati Tower (Tower
6789) in Ayala Avenue started to be absorbed. Space in Grade
B buildings also remained scarce with vacancies less than 1%.
Other established business districts in Metro Manila also saw
stronger leasing activity during the quarter, office vacancies in
Ortigas Center lowered to 2.1%, and Fort Bonifacio vacancies
remained stable at 3.6%.
Makati CBD Comparative Office Vacancy Rates (%)

2Q 2015
3Q 2015
3Q 2016F
0.69
0.35
0.11
Premium
Grade A
6.85
5.78
6.42
Grade B & Below
0.50
0.70
4.09
All Grades
1.85
2.14
4.06
While demand from both traditional and BPO office occupiers are
seen to grow steadily, all-time highs in office space completions
are slated each year from 2015 to 2017, surpassing the projected
demand. Thus, Colliers anticipates a rise in vacancies until 2017
if all planned office projects are completed according to schedule.
Makati CBD vacancies are anticipated to rise to 4.4% by the end
of 2016, while vacancies in Fort Bonifacio, where 43% of the new
stock for the year will be located, is seen to climb to 10.8%.
Forecast New Office Supply (Net Usable Area)

LOCATION
END OF 2014*
2015F
2016F
2017F
2018F
TOTAL
Makati CBD
2,847,397
2,287
60,200
Ortigas
1,298,773
81,509
60,287
14,393
39,290
1,494,252
975,157
186,910
315,370
339,656
183,227
2,000,320
300,264
300,264
378,271
91,106
35,004
23,268
527,648
Fort Bonifacio
Eastwood
Alabang
2,909,884
Mandaluyong
284,550
142,153
426,703
North Edsa - Triangle
322,286
24,947
119,049
36,900
503,182
Pasay City - Reclamation
186,203
71,219
78,922
25,385
51,569
413,298
Other Locations**
399,886
136,360
69,032
189,035
220,473
1,014,786
6,992,787
503,231
733,765
782,526
578,027
9,590,337
Total
Influx of new supply seen to dampen

rents
Makati CBD Office Supply and Demand
Office rents for major business districts in Metro Manila rose by

an average of 1.8% during the quarter, continuing robust rental
growth seen since the start of the year. Premium buildings in the
Makati CBD saw rates increase by almost 4% as the extremely
low vacancy rate for the segment pushed rates further. On the
other hand, more stable rental growth was seen during the period
for both Grade A (+1.23%) and B (+1.39%) segments.
However, the strong leasing activity experienced throughout
much of the year is expected to taper as the huge influx of
new supply is expected to impact overall vacancy. Colliers has
already observed some developers close leasing deals for new
buildings in the fringe areas with net effective rents that are
significantly lower than their headline rates through more free
rent or a softening in common area charges. This is likely due to
the developers recognition of the high levels of upcoming supply
in the next couple of years, and they would rather put contracts
in place at lower rates today rather than risk having their spaces
vacant for an extended period of time. Thus, Colliers sees rents
to start correcting on a wider basis through 2016.
Comparative Rental Rates (PhP/sq m/month)

Makati CBD (based on net usable area)
GRADE
Premium
2Q 2015
3Q 2015
% CHANGE (QOQ)
3Q 2016F
%CHANGE (YOY)
1,035 1,369
1,100 1,400
4.0
1,076 1,350
-2.96
Grade A
717 - 1,071
717 - 1,093
1.2
698 1,067
-2.48
Grade B
568 - 797
574 - 810
1.4
569 - 807
-0.56
Office capital value growth to outpace

rents
Makati CBD Office Capital Values
While office capital value growth slowed during the third quarter
in Makati CBD for both Premium (from 1.8% to 0.4%) and Grade
A (from 1.8% to 0.9%), strong capital appreciation was seen in
Ortigas Center, where strata-titled office spaces in the secondary
market had growth of about 3.3% for Grade A and 2.9% for
Grade B properties. Grade A office in Fort Bonifacio also grew by
around 2% during the quarter.
Even with the expected correction in rents, capital values are
forecasted to grow in some categories and areas, albeit at a
slower pace. While excess supply puts pressure on rents and
vacancy rates, the economy in general is still seen to grow,
counteracting any large declines in values. Furthermore, declining
land bank options within these areas will continue to place an
upward pressure on building values.
Comparative Office Capital Values (PhP/sq m)

Makati CBD (based on net usable area)
GRADE
2Q 2015
3Q 2015
% CHANGE (QOQ)
3Q 2016F
%CHANGE (YOY)
Premium
150,000-171,000
150,000-173,000
0.40
151,000-176,000
1.26
Grade A
87,000-120,000
87,000-122,000
0.90
86,000-122,000
-0.15
Grade B
63,000 87,000
63,000 91,000
2.90
65,000 98,000
5.28
RESIDENTIAL
Expected delays in completion lowers
new supply forecast for end-2015
Makati CBD Residential Stock
Only three projects in the major CBDs were completed in the

third quarter, with two other projects sliding in their delivery
dates. The buildings that were completed are The Meranti at
Two Serendra (800 units) in Fort Bonifacio, and The Robinsons
Land Sapphire Residences Tower 1 (410 units) and SM Shine
Residences (712 units) in Ortigas Center. No new residential
developments are expected to be completed in Eastwood and
Rockwell for the rest of 2015, while an additional 2,381 units are
still expected next quarter in the major CBDs.
With an average of 7,466 units expected to be delivered annually
from 2015 to 2019, total expected inventory in the five major
submarkets will amount to 100,622 units. About 93% of the new
supply introduced from 2015 to 2019 in the major CBDs shall be
located in Makati CBD, Fort Bonifacio, and Ortigas - with Fort
Bonifacio still with the highest new supply, delivering 19,150 units
in the next four years.
Forecast Residential New Supply

LOCATION
Makati CBD
Rockwell
END 2014*
2015F
2016F
18,337
1,000
4,148
2,962
2018F
1,072
2019F
TOTAL
598
28,117
346
492
269
5,266
Fort Bonifacio
19,427
2,779
6,931
4,125
2,831
2,482
38,575
Ortigas
13,820
2,430
1,355
899
422
570
19,496
Eastwood
Total
4,159
2017F
7,548
63,291
988
6,209
13,422
632
8,332
5,449
9,168
3,919
Makati CBD Residential Vacancy

Makati CBD Comparative Residential Vacancy Rates (%)
2Q 2015
3Q 2015
Luxury
3.85
4.40
5.01
Others
4.65
8.84
10.92
All Grades
7.64
8.26
3Q 2016F
10.19
* revised figures
100,622
New residential supply puts upward

pressure on vacancies
Despite the slowdown in deliveries, vacancies have been
observed to increase across the board due to recent completions
which are now being put into the market, presumably after the
owners have fit out their units. Unlike the improvements seen in
residential vacancies last quarter, a different story is unraveling
in Makati CBD as the overall vacancy rate rose by 62 basis points
(8.26%), with Grade A property vacancies rising by 55 basis
points to 4.4%. Overall vacancies in Fort Bonifacio also increased
by almost 1%, while Ortigas Center vacancies have returned to
double-digit territory with a 10.1% vacancy. On the other hand,
the lack of new completions have led to a further reduction in
vacancy rates in Rockwell to around 3.7% overall.
Residential rents remain stable in 3Q

2015
An average rental growth rate of 1.5% was observed during 3Q
2015 for premium residential condominium property in the major
CBDs. The average monthly rent for premium three-bedroom
units in Makati CBD amounted to PhP875 per sq m for the period,
higher by 1.57% QoQ; along with Fort Bonifacio which also
increased by 1.26% QoQ (PhP882 per sq m). Growth in rents
was highest in Rockwell at 1.82% QoQ (PhP951 per sq m).
Should the completion of an unprecedented 13,400 additional
units in the major CBDs by the end of 2016 materialize, Colliers
foresees a downward correction in rental rates by as much as
5% by the end of 2016. With an estimated 60,000 units being
completed in the entire Metro Manila area by the end of 2015,
plus another 51,000 units in 2016, leased condominium units in
the fringe areas will compete with available units in the major
CBDs. However, worsening traffic conditions have made renting
residential units in the CBD a more practical proposition for
employees during the weekdays; this phenomenon may soften the
impact of a more competitive leasing environment amid elevated
levels of condominium stock.
Makati CBD Comparative Residential Lease Rates for

Exclusive Villages (PhP/month)
3BR - 4BR, Unfurnished to Semi-Furnished
VILLAGE
LOW
HIGH
Forbes Park
250,000
600,000
Dasmarinas Village
250,000
500,000
Urdaneta Village
230,000
350,000
Bel-air Village
200,000
300,000
San Lorenzo Village
120,000
250,000
Magallanes Village
150,000
250,000
Ayala Alabang Village
130,000
280,000
Prime 3BR Units Residential Rents
Metro Manila Residential Condominium

Comparative Luxury 3BR Rental Rates (PhP/sq m/month)
LOCATION
Makati CBD
2Q 2015
3Q 2015
% CHANGE (QOQ)
1.57
3Q 2016F
595 - 1,155
Rockwell
769 - 1,099
804 - 1,098
1.82
792 - 1,076
-1.79
Fort Bonifacio
672 - 1,070
681 - 1,083
1.26
658 - 1,048
-3.25
573 - 1,118
%CHANGE (YOY)
588 - 1,135
-3.39
Comparative Residential Lease Rates (High-Rise)

3BR, Semi Furnished to Fully Furnished
LOCATION
MINIMUM
AVERAGE
MAXIMUM
Apartment Ridge/Roxas Triangle

Rental Range (PhP/month)
Average Size (sq m)
130,000
190,000
230,000
230
282
309
100,000
150,000
250,000
165
235
322
120,000
200,000
250,000
130
198
285
130,000
200,000
250,000
127
189
285
130,000
200,000
300,000
129
223
310
Salcedo Village
Average Size (sq m)
Legaspi Village
Average Size (sq m)
Rockwell
Average Size (sq m)
Fort Bonifacio
Average Size (sq m)
Capital values rises in pace with rental

growth during the third quarter
Capital value growth for residential condominiums in the
secondary market slowed down slightly in all CBDs during the
third quarter of 2015. Makati CBD condo values grew by 1.1%
during the quarter, while Fort Bonifacio values grew similarly at
1.07%. On the other hand, Ortigas Center condo value growth
was flat. While Rockwell Center residential property growth was
still the highest compared to the other major CBDs, the growth
rate slowed down from almost 3% during the second quarter
to a growth rate of 1.3%. Should rents correct over the next 12
months due to the anticipated level of additional condo supply, a
similar correction will be seen in capital values, leading to flat to
slightly negative value growth.
Prime 3BR Units Residential Capital Values
Metro Manila Residential Condominium

Comparative Luxury 3BR Capital Values (PhP / sqm)
LOCATION
Makati CBD
2Q 2015
104,000 - 194,000
3Q 2015
% CHANGE (QOQ)
3Q 2016F
106,000 - 196,000
1.12
106,000 - 196,000
%CHANGE (YOY)
-0.04
Rockwell
119,000 - 198,000
121,000 - 201,000
1.28
121,000 - 201,000
0.31
Fort Bonifacio
114,000 - 182,000
114,000 - 185,000
1.07
114,000 - 187,000
0.51
RETAIL
Retail stock reaches six million square
meters; record-high supply in 2016
The retail stock in Metro Manila surpassed six million sq m as
of the third quarter of 2015, growing by 0.69% from the first
quarter. The new supply comes from expansions in U.P. Town
Center (16,100 sq m) and Robinsons Novaliches (5,037
sq m) as well as from new developments such as Dragon8
Shopping Center (16,500 sq m) and BGC Stopover Pavilion
(3,500 sq m). Two recently opened developments in October
2015, SM Center Sangandaan (Caloocan) and Circuit Lane
(Makati), contributed over 35,000 sq m of new retail space and
are expected to wrap up completions for 2015.
The year 2016 will bring in an unprecedented influx of new retail
supply in Metro Manila. Over 720,000 sq m of leasable space
are scheduled to come online by the end of next year. Major
contributions include the expansion of SM Mall of Asia (200,000
sq m) and Ayala Lands new malls. The developer plans to open
over 180,000 sq m of retail space next year with the opening of
Paradigm in Pasig, South Park District Mall in Muntinlupa Vertis
Mall in Quezon City, Park Triangle Mall in Bonifacio Global City
and the second phase of U.P. Town Center also in Quezon City.
Megaworld, Federal Land and Filinvest Land are also expected to
contribute to the retail supply in 2016.
Stronger leasing activity keeps

vacancy rates low
Metro Manila
Comparative Retail Vacancy Rates (%)
1Q 2015
3Q 2015
Super Regional
1.53
0.42
Regional
4.17
1.58
Makati Monthly Retail Rents
Ortigas Monthly Retail Rents
Retail vacancy rates in Metro Manila continue to be low (0.42%),

with super-regional malls at near full occupancy while regional
malls improved to 1.58% from 4.17% in the first quarter. Demand
for retail space continues to come from international fashion and
apparel brands such as H&M which in particular, is still looking to
expand its current portfolio of seven stores in Metro Manila.
Malls within major CBDs to maintain

steady rental growth
Rental rates for malls in both the Ayala Center and Ortigas
Center remained steady in the third quarter. Average rents in
Ayala Center reached PhP1,465 per sq m per month, higher
by only 2.81% compared to the first quarter. Malls in Ortigas
Center posted an average lease of PhP1,290 per sq m per month,
a growth of 1.18% from the first quarter. Colliers anticipates
a steady rental growth in 2016 as strong retailer demand
continues.
However, escalations are expected to be capped at 5% as the
large retail supply coming in next year will be taken into account.
10
Retail Stock
Metro Manila
CLASSIFICATION
1Q 2015*
3Q2015
%CHANGE (QOQ)
3Q2016 F
%CHANGE (YOY)
Super Regional
3,657,635
3,657,635
0.00
3,657,635
0.00
Regional
1,032,374
1,037,411
0.49
1,037,411
0.00
District/Neighborhood
1,280,909
1,317,087
2.82
1,463,357
11.11
All Levels
5,970,917
6,012,132
0.69
6,158,402
2.43
Consumption accelerates amidst low

prices and bullish consumer outlook
Consumer Spending Growth Rate (%)
Domestic consumption remained stable for the second quarter

of 2015 despite lower recorded remittance inflows (+4.1%).
Stronger economic fundamentals such as the continued low
prices of consumer goods, improving employment figures and
a more bullish consumer outlook buoyed spending for much of
2015. According the latest BSP consumer survey, consumers
confidence for the succeeding 12 months remains positive.
Consumption spending is expected to further accelerate with
the onset of the Christmas holidays despite the onset of the El
Nino weather phenomenon and the effects of the recent Typhoon
Lando.
11
FOR MORE INFORMATION

David A. Young
Managing Director
Philippines
+632 888 9988
david.a.young@colliers.com
Julius Guevara
Director
Research and Advisory
+632 858 9050
julius.guevara@colliers.com
Copyright 2015 Colliers International.

The information contained herein has been obtained from sources deemed reliable. While
every reasonable effort has been made to ensure its accuracy, we cannot guarantee it. No
responsibility is assumed for any inaccuracies. Readers are encouraged to consult their
professional advisors prior to acting on any of the material contained in this report.
12
Mark Kevin Lagunilla

Analyst
+632 858 9056
mark.lagunilla@colliers.com
Randolf Ilawan
Research Assistant
+632 888 9988
randolf.ilawan@colliers.com
Colliers International | Philippines

11F Frabelle Business Center
111 Rada Street Legaspi Village
Makati City 1229 Philippines
+632 888 9988
colliers.com/philippines
North American Research & Forecast Report | Q4 2014 | Office Market Outlook | Colliers International

Rental Growth Steady Amid Rise in Future Completions: Philippines

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Research &

Rental growth steady amid

Julius Guevara | Director, Research and Advisory Services | Philippines

The Philippine economy recovered in the second quarter of

Economic Growth Indicators

Gross Domestic Product

Household Final Consumption

Government Final Consumption

Gross National Product

Budget Surplus/Deficit (PhP Bn)

Average 91-Day T-Bill Rates (%)

at constant 2000 prices

Source: Philippine Statistics Authority, Bangko Sentral ng Pilipinas, Bureau of Treasury

The Philippine economy rebounds to

Development Authority (NEDA). Nevertheless, the Philippines is

Source: Bangko Sentral ng Pilipinas

Philippines Research & Forecast Report | 3Q 2015 | Colliers International

Land values continue to rise amid

Source: Colliers International Philippines Research

Comparative Land Values (PhP / sq m)

Source: Colliers International Philippines Research

Philippines Research & Forecast Report | 3Q 2015 | Colliers International

Issued licenses for affordable housing

HLURB Licenses to Sell

Source: Housing and Land Use Regulatory Board

Applications for mid- and high-end condominiums on the

HLURB Licenses to Sell

Balanced Housing Compliance Units

JAN AUG '14

JAN - AUG '15

Mid Income Housing

Open Market Housing

Philippines Research & Forecast Report | 3Q 2015 | Colliers International

Makati CBD vs. Metro Manila Office Stock

Delays in completions pushes

Vacancies remain low in established

Source: Colliers International Philippines Research

Makati CBD Comparative Office Vacancy Rates (%)

Grade B & Below

Source: Colliers International Philippines Research

Forecast New Office Supply (Net Usable Area)

North Edsa - Triangle

Pasay City - Reclamation

Source: Colliers International Philippines Research

Philippines Research & Forecast Report | 3Q 2015 | Colliers International

Influx of new supply seen to dampen

Makati CBD Office Supply and Demand

Office rents for major business districts in Metro Manila rose by

Source: Colliers International Philippines Research

Comparative Rental Rates (PhP/sq m/month)

Source: Colliers International Philippines Research

Office capital value growth to outpace

Makati CBD Office Capital Values

Source: Colliers International Philippines Research

Comparative Office Capital Values (PhP/sq m)

Source: Colliers International Philippines Research

Philippines Research & Forecast Report | 3Q 2015 | Colliers International

Makati CBD Residential Stock

Only three projects in the major CBDs were completed in the

Source: Colliers International Philippines Research

Forecast Residential New Supply

Source: Colliers International Philippines Research

Makati CBD Residential Vacancy