Robust growth in the office market continues; spilling over to the other property sub-sectors Philippine Property Digest | Q1 2016

Resid

entia

l

10Office

07

Economy

04

13Retail

16Hotel

• First quarter 2016 GDP growth at 6.9%, the highest quarterly growth rate recorded since 2013.

• Average 1Q16 headline inflation rate at 1.1%, inflation expected to slowly reach 2% by end of 2016, according to BSP.

• OF Remittances in 2015 increased by 4.6% y-o-y and reached USD 25.8 billion amidst low oil price environment affecting key economies in the Middle East, the second largest source of remittances.

• Three Grade A office developments complete in 1Q16, adding 92,600 sqm of office space in Metro Manila.

• Positive demand growth for office space continues as healthy take-up of Grade A office developments remain driven by the offshoring and outsourcing (O&O) industry.

• Healthy occupancy levels and positive investor sentiment continue to support an upward trend in rents and capital values.

• Three completed developments in 1Q16 add 140,000 sqm of retail space in Metro Manila.

• Entry and expansion of local and foreign retailers buoy retail demand.

• Development launches slow down, but growth trajectory maintains upward trend.

• Healthy demand is sustained on the back of OF remittances, expanding O&O sector and positive economic performance.

• Capital values grow faster than rents.

• Newly completed hotel developments add close to 1,100 hotel rooms in 1Q16.

• The hotel property market continues to perform positively supported by increasing tourist arrivals.

O&OSUSTAINSGROWTH

STABLEGROWTH OFRENTS &CAPITAL VALUES

HIGH-LEVELSPENDING TOFUEL RETAILDEMAND

NEWFOOD & BEVERAGE BRANDS

POSITIVETAKE-UP

RENTSAND CAPITALVALUES

AVERAGEVACANCY

ACROSSMETRO MANILA

6%

NEWS SUPPLY 140,000

GDP 1Q16

6.9%y-o-y

sqm

INFLATION1Q16

1.1%y-o-y

OF REMITTANCES

JAN–DEC4.6%

(2015 vs 2014)

TOURIST ARRIVALJAN–FEB(2016 vs 2015)

20.4%1Q 2016

ROOMS+1,100 PPP

TO SUPPORTGROWTH

ECO

NO

MY

RESI

DEN

TIA

LO

FFIC

ERE

TAIL

HO

TEL

NEW SUPPLY 6,900

units

1Q16

Economy

Download JLL’s DataTouch today and access Office, Retail, Residential, Hotels and Industrial market data from your smartphone or tablet. Wherever you are.

Need Asia Pacific rents and capital values on the move?

www.jll.com/datatouch

Jones Lang LaSalle © 2016 Jones Lang LaSalle IP, Inc. All rights reserved.

5 – E

CONO

MY

Economy

6 – E

CONO

MY PHILIPPINES

GDP Growth (2012-2019E)

Source: Philippine Statistics Authority; Oxford Economics for forecast figures

Inflation Rate (2012-2019E)

Source: BSP; Oxford Economics for forecast figures

Full-year 2015 GDP fell behind government target at 5.8% y-o-y due to weak global demand and low government spending. However, 1Q 2016 GDP accelerated the fastest since 2013, registering at 6.9%. The high growth was led by the services sector expanding by 7.9% this quarter. Consumer spending and the offshore and outsourcing (O&O) sector will continue to buoy the economy, but negative exports, slow growth in China, volatile financial markets and extreme weather conditions are expected to put downward pressure on it. Pre-election activity increased domestic consumption and will likely be sustained this year. However, there is moderate risk about the policies the next administration will focus on. Oxford Economics forecasts 6.3% full-year GDP growth for the country in 2016.

Headline inflation was 1.1% in March 2016, lower than the 2.4% recorded in March 2015, taking the year-to-date inflation to 1.1%. The Bangko Sentral ng Pilipinas (BSP) expects inflation to range between 2% and 4% for 2016 and 2017. The inflation rate was largely affected by low crude oil prices; however, the rate is expected to increase gradually as global oil producers cut back on their production. Moderate price increases in meat, fish, milk and eggs contributed to the slight increase in the inflation rate as well. Despite the ongoing heatwave, the price of rice continued to decline. Oxford Economics forecasts the inflation at 2.2% and 3.5% for 2016 and 2017, respectively.

0.0%

1.0%

2.0%

3.0%

4.0%

GDP

Grow

th

8.0%

7.0%

6.0%

5.0%

2012 2013 2014 2015 2016 2019E2018E2017E

0.0

1.0

2.0

3.0

4.0

Inflat

ion R

ate (%

)

6.0

5.0

2012 2013 2014 2015 2016 2019E2018E2017E

7 – E

CONO

MYPHILIPPINES

Foreign Exchange Rate PHP:USD (2012-2019E)

Source: BSP; Oxford Economics for forecast figures

Source: BSP; Oxford Economics for forecast figures

OF Cash Remittances (2012-2019E)

The average 1Q16 exchange rate for the Philippine peso to the US dollar was PHP 47.3 per USD 1.0. Dovish sentiment by the US Federal Reserve on hiking the interest rate signifies that the US economy is still recovering and needs more stimulus. This weakened the US dollar against the Philippine peso, bringing down the exchange rate from PHP 47.6 in February 2016 to PHP 46.7 in March 2016.

Total Overseas Filipino (OF) cash remittances for full-year 2015 was recorded at USD 25.8 billion, up by 4.6% compared with USD 24.6 billion in 2014. Despite the ongoing geopolitical tension and lower oil production talks in the Middle East, the latest OF cash remittances registered a 9.1% increase – USD 2.1 billion – in February 2016 compared with USD 1.9 billion in February 2015. Currently, the government is processing 160,277 approved job orders and most of the personnel will be deployed in the Middle East, despite uncertainty surrounding the economic stability of oil producing countries. The Americas and the Middle East are the two biggest contributors to OF remittances. Total OF cash remittances is expected to grow 4% for full-year 2016.

40.0

41.0

42.0

43.0

44.0

45.0

46.0

Exch

ange

Rate

(PHP

:USD

)

47.0

2012 2013 2014 2015 2016 2019E2018E2017E

0.0

20.0

15.0

10.0

5.0

25.0

30.0

OF C

ash R

emitta

nces

(in bi

llion U

SD)

35.0

2012 2013 2014 2015 2016 2019E2018E2017E

Office

Data, charting and instant access to all the leading market insights online

Subscribe to JLL’s Real Estate Intelligence Service today.

Contact: Roddy Allan, Roddy.Allan@ap.jll.com

Stay ahead of the curve

www.jll.com/asiapacific

9 – O

FFIC

E

Office

10 –

OFFI

CE

PHILIPPINES

Estimated Vacancy Rates in Key CBDs in Metro Manila

Sub-marketEstimated

Vacancy Rates

1Q 2016 2H 2015

Makati CBD 4% 6%

BGC 4% 6%

Ortigas CBD 2% 3%

Note: Vacancy rates refer to the available office space in existing Prime and Grade A developments. BGC vacancy rate does not include McKinley Hill and other peripheral mixed use developments

Source: JLL Research & Consulting

Grade A Office Stock in Metro Manila by Sub-market (2012-2019E)

Source: JLL Research & Consulting

SUPPLY

Total existing stock of Prime and Grade A office development in Metro Manila reached approximately 6.4 million sqm in 1Q16. Currently, the highest concentration of Grade A office space is found in Ortigas CBD at approximately 1.4 million sqm, followed by Makati CBD with 1.3 million sqm. Other urban sub-markets such as Bonifacio Global City (BGC), Mckinley Hill, Bay City, Quezon City (includes Eastwood City, UP-Ayala Technohub, Eton Centris and Araneta Center) and Alabang (Filinvest City and Madrigal Business Park) contributed an estimated 3.5 million sqm to total existing office stock.

Three office developments completed in 1Q16 – UP-Ayala Technohub (Building P), W North and Uptown Place Tower 2. Both the W North and Uptown Place Tower 2 developments are located in BGC and add 82,600 sqm to total office stock while UP-Ayala Technohub (Building P) is located in Quezon City and adds approximately 10,000 sqm to total office stock.

An estimated 2.4 million sqm will likely be added to total office stock from 2016 to 2019. Key upcoming developments include MJ Corporate Plaza by Majalco, Inc. and Alveo Financial Tower by Alveo Land, a subsidiary of Ayala Land, Inc. (ALI), in Makati CBD; Bonifacio Stopover Corporate Center by ALI, Metrobank Center by Federal Land and Uptown Tower 3 by Megaworld Corp in BGC; the McKinley West Campus buildings of Megaworld Corp in McKinley Hill; Filinvest Cyberzone Pasay Tower I in Bay City and South Park Corporate Center by ALI in Alabang.

DEMAND

Office space demand continued to exhibit robust growth in 1Q16 due to healthy leasing activity driven by the continuous expansion of the O&O sector. Furthermore, other industries, such as IT and software, and the financial services sectors supported the strong demand for office space, displaying healthy growth during the quarter.

Healthy occupancy levels were observed among existing office developments in Metro Manila in 1Q16. Ortigas CBD showed high take-up, with the average vacancy rate of office developments in the sub-market at 2%, while vacancy rates in Makati CBD and BGC posted vacancy rates at around 4%.

0

500

400

300

200

600

Annu

al Gr

ade A

Offic

e Sup

ply

(in th

ousa

nd sq

m)

900

700

800

100

2011 2012 2013 2014 2015 2019E2018E2017E2016EMakati CBD Bonifacio Global City McKinley Hill

Ortigas CBDQuezon City Alabang Bay City

11 –

OFFI

CE

PHILIPPINES

Estimated Monthly Rents in Metro Manila by Sub-market

Sub-marketAverage Rent

(PHP/sqm/month)

1Q 2016 2H 2015

Makati CBD 540–1,250 800–1,250

BGC 650–1,000 750–900

McKinley Hill 700–825 700–750

Ortigas CBD 425–900 550–750

Quezon City 500–800 550–750

Alabang 500–725 500–600

Bay City 470–700 600–650

Notes: Rents were quoted as average asking base rents, excluding air-conditioning charges and common use service area charges, of existing Prime and Grade A office developments per sub-market.

Source: JLL Research & Consulting

Estimated Capital Values in Key CBDs in Metro Manila

Sub-marketAverage Capital Values

(PHP/sqm)

1Q 2016 2H 2015

Makati CBD 105,000–150,000 105,000–145,000

BGC 120,000–160,000 120,000–160,000

Ortigas CBD 60,000–110,000 65,000–80,000

Notes: Capital values were quoted as average asking price per square metre, excluding VAT, of existing Prime and Grade A office developments per sub-market.

Source: JLL Research & Consulting

ASSET PERFORMANCE

Average rents have continued their moderate increase in 1Q16 as a result of the healthy occupancy levels in existing developments driven by the strong demand of the O&O sector and positive economic growth in the Philippines.

Among office developments, Prime and Grade A office space in Makati CBD and BGC continued to command the highest rent with average rents ranging from PHP 540 to PHP 1,250 per sqm per month. On the other hand, the average rent for office developments in other sub-markets, such as Ortigas CBD, Quezon City, Alabang and Bay City, were relatively close to each other, ranging from PHP 425 to PHP 900 per sqm per month.

Prime and Grade A office developments continued to exhibit favourable capital value growth in 1Q16 due to positive investor sentiment as well as the strong economic fundamentals of the country. Capital values of Grade A office space ranged from PHP 120,000 to PHP 160,000 per sqm in BGC, PHP 105,000 to PHP 150,000 per sqm in Makati CBD and PHP 60,000 to PHP 110,000 per sqm in Ortigas CBD.

OUTLOOK

Demand for office space is projected to continue its upward trajectory, exhibited by high pre-commitment levels among upcoming office developments. This is in light of the continuous expansion of the O&O sector, supported by financial services and IT firms.

Despite this, vacancy rates are still expected to increase because of the large incoming supply anticipated in the next few years.

The sustained credit ratings of the Philippines awarded by key rating agencies will likely buoy the investment market of the country for the next few years. The positive performance of the economy shows a promising outlook as it was seen to withstand economic difficulties such as the El Nino phenomenon and the low economic performance of the region and of China in the past year. Additionally, the O&O industry is expected to continue to sustain the Philippine office property market over the next few years. According to the Information Technology and Business Process Association of the Philippines, the O&O industry has become the second largest source of US dollar income.

Residential

www.jll.com/asiapacificJones Lang LaSalle © 2016 Jones Lang LaSalle IP, Inc. All rights reserved.

Detailed historical data, forecasts and reporting for more than 50 cities in Asia Pacific

Subscribe to JLL’s Real Estate Intelligence Service today.

Contact Roddy Allan, Roddy.Allan@ap.jll.com

Real estate insights;Past, present and future

13 –

RESI

DENT

IAL

Residential

14 –

RESI

DENT

IAL

PHILIPPINES

Residential Condominium Stock in Metro Manila by Sub-market (2012-2019E)

Note: Residential stock refers to the mid-range to high-end residential condominium supply in Metro Manila.

Source: JLL Research & Consulting

Select Newly Launched Projects in Metro Manila (1Q16)

Expected Completion Development Developer No. of

Units

2020 Avida Towers Sola – Tower ALI 1,004

Note: Data on expected completion dates and number of units may change depending on the plans of developers.

Source: Various brokers and developers, JLL Research & Consulting

SUPPLY

The existing supply of mid-range to high-end residential condominium developments as at end-1Q16 was estimated at 241,700 units.

Approximately 6,900 units completed in 1Q16. Some of the major developments completed in 1Q16 include The Lerato Tower 1 and Alphaland Makati Place in Makati CBD, Park West and Avida Towers Global City Tower 2 in BGC, Avida Towers Centera Tower 1 and Axis Residences Tower 1 in Ortigas CBD, Bay Garden Club and Residences in Bay City, One Castilla Place and Manhattan Heights Tower A in Quezon City and 150 Newport Boulevard in Newport City.

Meanwhile, some of the developments expected to complete in 2Q16 include Milano Residences and Two Central in Makati CBD, West Tower at One Serendra and Arya Residences Tower 2 in BGC, Acqua Private Residences and The Grove Towers E and F in Ortigas CBD and Four Season Riviera – Lotus Tower in Binondo, Manila.

A few residential projects were launched in 1Q16, including Avida Towers Sola in Vertis North, Quezon City, by ALI.

The growth in the supply of residential units in the Philippines is also evident in the number of licences to sell (LTS) issued by the Housing and Land Use Regulatory Board (HLURB). The total number of units for residential properties increased slightly from 216,503 in 2014 to 216,948 in 2015. The open market and socialised housing segments registered positive annual growth, with the number of socialised housing units increasing almost twofold in only one year. On the other hand, the mid- and high-end condominium segment was observed to have a lower number of units in 2015, down by 8,785 units from the 2014 figure.

DEMAND

The worsening traffic conditions in Metro Manila, as well as the rising popularity of condominium living, has driven demand for residential condominium units in Metro Manila. The rise of several EUDs in Metro Manila has led to the influx of employees choosing to reside adjacent to their workplace in order to avoid traffic and save time from the commute.

The large supply of newly completed developments has pushed vacancy rates in the luxury condominium market in Makati CBD and BGC to 7.5% in 1Q16, up from 6.8% registered during the previous quarter. Demand in the luxury market was mainly driven by high income Filipino individuals, expatriate employees of the O&O sector, and multinational companies. Foreign investors also showed a positive interest in the luxury condominium market.

Take-up of pre-selling developments remains healthy. However, an observed trend for the quarter was that major developers have delayed development launches as a self-corrective measure.

0

50,000

40,000

30,000

20,000

Numb

er of

Con

domi

nium

Units

60,000

10,000

2011 2012 2013 2014 2015 2018E2017E2016EMakati CBD BonifacioGlobal City Ortigas

Bay CityMcKinley Hill Quezon City Alabang

Parañaque/MuntinlupaNewport City Manila

15 –

RESI

DENT

IAL

PHILIPPINES

Issued LTS in the Philippines (Number of Units)

Segment 2015 2014

Residential 216,948 216,503

Balanced Housing Compliance Units 19,645 24,787

Socialised Housing 30,786 16,876

Economic Housing 62,900 63,398

Mid-Income Housing 6,488 7,210

Open Market Housing 29,430 27,819

Low-Cost Condominium 2,595 2,524

Mid- and High-End Condominium 65,104 73,889

Non-residential 167,712 232,605

Commercial Condominium 3,396 2,788

Farmlot 156 0

Memorial Park 163,492 229,221

Industrial Sub-division 268 202

Commercial Sub-division 400 394

Source: HLURB

ASSET PERFORMANCE

Average capital values of luxury condominiums in Makati CBD and BGC in 1Q16 posted an estimated 1.5% q-o-q growth.

BGC has surpassed Makati CBD, albeit by a small margin, in terms of the most expensive condominium units, with capital values ranging from PHP 105,000 to PHP 170,000 per sqm for mid-range developments and from PHP 150,000 to PHP 188,000 per sqm for high-end developments. Nevertheless, Makati CBD maintains high rates, ranging from PHP 100,000 to PHP 155,000 per sqm for mid-range developments and from PHP 155,000 to PHP 245,000 per sqm for high-end developments. Mid-range developments in the Ortigas/Mandaluyong sub-market have capital values ranging from PHP 70,000 to PHP 140,000 per sqm. Average capital values in Quezon City slightly dropped to range from PHP 71,000 to PHP 122,000, while Alabang prices rose to range from PHP 85,000 to PHP 120,000.

OUTLOOK

The growth of the Metro Manila residential condominium market is expected to remain positive, albeit at a slower pace. Headwinds in the global economy, the possible softening of OF remittances influx and the results of the upcoming national elections may affect future demand and supply in the market. Major developers are seen to have held back on development launches for the quarter, in order to address supply overhang.

Approximately 113,800 units are projected to be added to the residential stock in Metro Manila from 2Q16 to 2019. These upcoming developments are concentrated in Makati CBD and its fringes, Ortigas CBD and Quezon City. The huge incoming supply will likely put downward pressure on prices, as a result of tightening competition.

Estimated Capital Values in Key CBDs in Metro Manila

Sub-marketAverage Capital Values

(PHP/sqm)

1Q 2016 2H 2015

Mid-range

Makati CBD 100,000–155,000 100,000–150,000

BGC 105,000–170,000 114,000–143,000

Ortigas/ Mandaluyong 70,000–140,000 60,000–129,000

Quezon City 71,000–122,000 75,000–123,000

Alabang 85,000–120,000 76,000–115,000

High-End

Makati CBD 155,000–245,000 165,000–230,000

BGC 150,000–188,000 152,000–177,000

Note: Capital values were quoted as average asking price per square metre.

Source: JLL Research & Consulting

www.jll.com/asiapacific

Jones Lang LaSalle © 2016 Jones Lang LaSalle IP, Inc. All rights reserved.

Feasibility Studies

Expansion Strategy

Investment Strategy

Benchmarking Reports

Due Diligence Reporting

Providing expert research consultancy services and economic, demographic and infrastructural insights to investors across office, hotels, retail, residential and industrial sectors.

From bespoke consultancy to in-depth advisory, get in touch today.

Contact: Dr Jane Murray, Jane.Murray@ap.jll.com

We are your best resource

Retail

17 –

RETA

IL

Retail

18 –

RETA

IL

PHILIPPINES

Note: Indicated supply is measured in terms of the GFA of the retail developments.

Source: JLL Research & Consulting

Cumulative Retail Shopping Mall Supply in Metro Manila (2011-2020E)

New Brands that Entered the Philippine Market during 1Q16

Retailer Brand Country of Origin

Retailer Type

Peperoni Pizzeria Singapore F&B

Morganfield’s Malaysia F&B

Mont Blanc Germany Luxury accessories

The Dessert Kitchen Hong Kong F&B

Source: JLL Research & Consulting

SUPPLY

Supply of retail space in Metro Manila continued to grow at a steady pace following the mall openings in 1Q16. Three retail developments that opened during the quarter were Uptown Place Mall and Uptown Parade in BGC as well as Venice Grand Canal Mall in McKinley Hill, Taguig City, all developed by Megaworld Corporation. The developments added approximately 140,000 sqm of retail space to the existing stock.

By the second half of 2016, malls slated for completion include The 30th Sunrise in Pasig City, expansion of Festival Mall in Muntinlupa City, Big Apple in BGC, Unimart in Pasig City, Vertis North Commercial Block Mall in Quezon City, South Park District Mall in Muntinlupa City, UP Town Center Phase II in Quezon City and the expansion of SM Mall of Asia in Pasay City. All of these developments are expected to add approximately 324,300 sqm of retail space.

DEMAND

Demand for retail space remained robust in 1Q16 on the back of the continued interest of local and foreign retailers to enter and expand operations in Metro Manila retail developments. The majority of the foreign brands that opened their first stores in the Philippines during the quarter were from the food and beverage (F&B) sector, such as Peperoni Pizzeria, Morganfield’s and The Dessert Kitchen. On the other hand, other international brands continued to expand operations in major malls. These brands include F&B stores Nadai Fujisoba, Halal Guys, Mr. Pizza and Tous Les Jours. Clothing and fashion brands, such as Sfera and Gant, also expanded their presence in major malls in Metro Manila.

0.0

4.0

3.0

2.0

1.0

5.0

6.0

7.0

8.0

9.0

Cumu

lative

Reta

il Sup

ply (in

milli

on sq

m)

10.0

2011 2012 2013 2014 2020E2016E2015 2017E 2018E 2019E

19 –

RETA

IL

PHILIPPINES

OUTLOOK

The continued positive growth of the Philippine economy plus the growing consumer spending from continued inflows of OF remittances and robust growth of the O&O sector are expected to stimulate the performance of the retail property market.

Foreign F&B brands announced plans to enter the Philippine retail market in 2016. Texas Roadhouse, Denny’s and Moe’s Southwest Grill are scheduled to open their first stores this year. Meanwhile, American brand Pink’s Hotdogs has also expressed its intention to enter the Philippine market and is set to open its first store at Shangri-La Hotel in BGC.

By the second half of 2016, around 324,000 sqm of retail space is slated for completion in Metro Manila. The high volume of supply in 2016 is likely to push the vacancy rate upwards. Although supply of retail space is projected to increase, rents are still expected to grow moderately supported by the continued interest of local and foreign brands to enter and expand operations in Metro Manila. From 2017 to 2019, a total of 497,000 sqm is forecast to be added to the existing stock.

Hotel

With Over100 Researchers On The Ground In 50 Markets, We Help You Stay AheadComprehensive Data, Forecasts, Reports, Presentations, Hotline

Dr Jane MurrayHead of Research – Asia Pacific +852 2846 5274 jane.murray@ap.jll.com

Roddy AllanREIS Asia Pacific +852 2846 5790 roddy.allan@ap.jll.com

To find out more, please contact:

Newly Launched,Tokyo Industrial

21 –

HOTE

L

Hotel

22 –

HOTE

L

PHILIPPINES

SUPPLY

Metro Manila’s hotel property market continued its positive performance due to the rising trend of tourist arrivals in the Philippines. In 1Q16, two hotel developments opened and contributed 1,098 hotel rooms to the existing stock. These are Shangri-La Hotel at the Fort by the Shangri-La Asia Group in BGC and Hotel 101 by Hotel of Asia, Inc. in Bay City.

From 2Q16 to 2020, approximately 11,200 hotel rooms are scheduled to be added to the existing stock. The majority of the hotels for completion are located in established CBDs such as Makati CBD and BGC. However, Bay City and Newport City have the greatest number of hotel rooms to be added to the existing stock supporting the gaming industry. Upcoming hotels in Metro Manila include The Manila Bay Resorts and The Westin Manila Bayshore in Entertainment City, Hilton Manila and Savoy Hotel in Newport City, Grand Hyatt in BGC and Mandarin Oriental Manila in Makati CBD.

DEMAND

The hotel sector continues to be fuelled by the growth of the tourism sector. In January 2016 and February 2016, the number of international tourist arrivals in the Philippines was recorded at 549,725, up by 20.4% y-o-y. South Korea contributed the most visitors with 284,763 arrivals, accounting for 26.1% of the total arrivals. The second major contributor was the USA with 155,796 visitors, accounting for 14.3% of the total arrivals. China ranked third with 130,916 visitors, accounting for 12% of the total arrivals. Meanwhile, Japan came in fourth contributing 92,531 visitors, accounting for 8.5% of the overall arrivals. Australia, on the other hand, ranked fifth with 43,712 visitors, accounting for 4% of the total arrivals. Other major contributors to the total number of tourists included Canada, Taiwan, Singapore, the United Kingdom and Malaysia.

Recently Opened Hotels in Metro Manila (1Q16)

Development Location No. of Rooms

Shangri-La Hotel at The Fort BGC 576

Hotel 101 Manila Bay City 522

Source: JLL Research & Consulting

Select Upcoming Hotel Developments (2016E-2020E)

Completion Date Development No. of

Rooms

2016 Marriot West Wing 227

2016 Conrad Hotel Manila 352

2016 Grand Hyatt 440

2016 Citadines Millennium Ortigas 210

2016 Savoy Hotel 350

2016 Valero Grand Suites 136

2017 Hilton Manila 352

2017 Somerset Alabang Manila 150

2017 Novotel emerald Suites 150

2017 Seda Hotel Vertis North 438

2018 Sheraton Manila 350

2018The Westin Manila

Bayshore – Resorts World Bayshore City

600

2018 Resorts World Bayshore City 1,500

2018 Mercure Hotel Ermita 350

2018 Seda Arca South 265

2019 The Westin Manila Sonata Place 289

2019 Novotel Suites Manila 310

2020 Mandarin Oriental Manila 275

23 –

HOTE

L

PHILIPPINES

OUTLOOK

Hotel supply is forecast to increase in the coming years as international brands are interested in expanding their operations in the Philippines. Some brands scheduled to open hotels are The Hyatt Corporation and Hilton Worldwide. Likewise, local hotel operators and developers, including SM Investment Corporation and the Ayala Hotels and Resorts Group, have expressed plans to increase their footprint in the hotel sector.

The expected continued positive performance of the Philippine economy and the positive growth of the O&O sector will contribute to the projected increase in demand for hotel accommodation in the near-term.

International Tourist Arrivals (2010-2018E)

Note: The compounded annual growth rate from 2005 to 2015 was used to forecast tourist arrivals for 2016 to 2018.

Source: Department of Tourism (DOT); JLL Research & Consulting for projections

0.0

4.0

3.0

2.0

1.0

5.0

6.0

Inter

natio

nal T

ouris

t Arri

vals

(in m

illion

s)

7.0

2010 2011 2012 2013 2014 2016E2015 2017E 2018E

For more information, please contact:

COPYRIGHT © JONES LANG LASALLE IP, INC. 2016. All rights reserved. No part of this publication may be reproduced or transmitted in any form or by any means without prior written consent of Jones Lang LaSalle. The items in this publication have been compiled from the various sources acknowledged. The information is from sources we deem reliable; however no representative or warranty is made to the accuracy thereof.

Claro dG. Cordero, Jr. Associate Director Head of Research, Consulting & Valuation tel +63 2 902 0887 mobile +63 918 9143309 Claro.Cordero@ap.jll.com

JLL Philippines +63 2 902 0888 www.jll.com.ph

Note: The Philippine Property Digest covers the Prime and Grade A office, mid-range to high-end residential condominium, retail shopping mall and hotel markets in Metro Manila.