Philippine Real Estate News – June 2017
Posted on May 1, 2017 in Blog, Newsletters
here’s an article from manilatimes.net correspondent, Jomar Canlas :
Appeals court rules vs Rufinos, Prietos in ‘Mile Long’ case
THE Court of Appeals has ruled in favor of the government in its bid to recover the prime “Mile Long” properties in Makati City from the wealthy Rufino and Prieto families.
President Rodrigo Duterte has accused the Rufino and Prieto families, which control the Philippine Daily Inquirer, of obtaining a lease over the properties that he claimed was disadvantageous to the government, as well as non-payment of rentals and tax evasion.
In a decision penned by Associate Justice Jose Reyes Jr., the court’s fifth division dismissed one of the two cases filed before lower courts by the Rufino-Prieto firm Sunvar Realty Development Corp. to stop its eviction from Mile Long.
The ruling said Regional Trial Court (RTC) Branch 59 in Makati City, under Judge Winlove Dumayas, had no jurisdiction over the case when it issued a temporary restraining order on the August 13, 2016 ruling of a Metropolitan Trial Court that ordered Sunvar Realty to vacate the property and pay back rentals amounting to P478,200,600 as of May 15, 2015.
The appeals court also ordered that another case involving Sunvar Realty be tossed back to Makati RTC Branch 141 under Judge Maryann Corpus-Mañalac, which has the authority to hear and decide the main case.
“Common to the two petitions is the issue of forum shopping. Petitioners (government) opined that private respondent Sunvar is guilty of forum shopping when it filed a petition for Injunction with one court (Dumayas court) and an Appeal (on the merits) with another court (Mañalac court),” the appeals court said.
Reyes directed Mañalac “to continue with the proceedings of the appeal and to resolve the same with reasonable dispatch.”
The petitioners, the government and state-owned National Power Corp. (Napocor), are the owners of several parcels of land between Pasong Tamo Street and Vito Cruz Extension in Makati City, with a total area of 125,607 square meters and covered by four transfer certificates of title.
On December 26, 1997, the government and Napocor leased the properties to the Technology Resource Center Foundation Inc. for a period of 25 years beginning January 1, 1978 and ending on December 31, 2002, renewable for another 25 years upon mutual agreement of the parties.
On different dates, the Technology Resource Center granted Sunvar Realty the option to sublease all portions of the property.
During the period of its sublease, Sunvar Realty introduced improvements consisting of commercial buildings—Premier Cinema, Mile Long Arcade, Makati Creekside Building, Gallery Building and Sunvar Plaza.
On June 3, 2002, Napocor notified the Technology Resource Center, which changed its name to the Philippine Development Alternatives Foundation, that it would no longer renew the contract of lease because of low rental rates, noting that the value of the lands stood at P125,000 per square meter in 1997.
On February 22, 2008, the Office of the Solicitor General advised Sunvar Realty to vacate the properties within 30 days or face the court.
When Sunvar Realty refused to vacate, government and Napocor filed a complaint for unlawful detainer. The cases with RTC judges Dumayas and Mañalac were consolidated, but they both resolved the cases on merits prior to consolidation.
Dumayas and Mañalac had sided with Sunvar, prompting the OSG to seek redress before the appellate court.
Justice Reyes reversed the ruling of the lower courts.
“The RTC cannot render proper judgment to the injunction case that would amount to res judicata (a matter already judged) to the judgment rendered on the appeal, as the RTC in the first place has no jurisdiction to entertain the injunction case.”
here’s an article from philstar.com correspondent, Richmond Mercurio :
Ecozone Investments seen Tripling this Year
MANILA, Philippines – The Philippine Economic Zone Authority (PEZA) expects approved investments this year to at least triple to P654.54 billion due to heightened foreign investor interest in the country, its top official said yesterday.
With bullish investor sentiment, PEZA director general Charito Plaza said investment approvals by the agency may even quadruple to P872.72 billion for 2017 from P218.18 billion last year.
“We’re expecting a 200 percent to 300 percent increase in new investments for the year because for the first quarter alone, it grew already by 51 percent,” she said.
Investment pledges approved by the agency was off to a strong start in 2017, reaching P51.34 billion in the first quarter as compared to P34.11 billion in the same period last year.
“We’re looking at a very bullish year for PEZA, especially with the new economic zones and new industries coming in. We’re also aggressive in inviting all these foreign investors,” Plaza said.
“Those foreign investors that we have an LOI (letter of intent) in the Middle East, US and in Japan, one by one or by group, they are already coming over to look for the economic zones that they like as far as the location is concerned and register their companies with PEZA,” she added.
President Duterte’s Middle East state visit last May yielded $925-million worth of investment commitments.
Aside from investors from the Middle East, Japan and the US, the PEZA official said more investment pledges from foreign sources like China, Russia and Vietnam are also expected to pour into the country in the coming months.
Plaza said PEZA is encouraging all private land owners as well as local government units to develop their own economic zones to cater to this growing number of foreign locators.
PEZA is one of the country’s top investment promotion agencies. It currently administers 386 economic zones across the country, of which four are owned and operated by the agency.
Plaza also said 80 percent of the country’s exports comes from PEZA.
here’s an article from bworldonline.com correspondent, Arra B. Francia :
Outsourcing firms favor Cebu for Work Force, Infra
CEBU continues to attract the most number of knowledge process outsourcing (KPO) firms in the country outside Metro Manila, due to its infrastructure and residential projects and the supply of university graduates the area produces, a property consultancy firm said.
Based on Colliers International’s preliminary study of the Cebu market, the firm said that KPO companies have chosen to set up shop in Metro Cebu due to the area’s adequate infrastructure, internet connections, the supply of skilled college graduates, as well as a high level of urbanization boosted by the development of townships and infrastructure projects.
“Colliers believes that Cebu is still the most practical choice for KPO firms looking for viable locations outside of the country’s capital due to its diverse and skilled labor pool,” the firm said in a statement released on Tuesday.
Major outsourcing companies such as Accenture Philippines are now present in the area as part of their expansion strategy. With four facilities in the area, Accenture Philippines currently employs over 5,000 people and expects to hire a thousand more in 2017 to handle programming accounts.
Hanoi-based FPT Software opened in the city in 2015 to establish a presence in the country, initially hiring 62 software engineers with plans to have an employment base of 2,000 people by 2020. Meanwhile, health and information firm Medcor has also started hiring nurses to expand its clinical software development capabilities.
Other KPOs that started operations in Cebu within the last 18 months include Synchrony, Cardo Engineering, Google, and Catapult International.
The growth of KPOs in Cebu has prompted developers to boost their projects in the area. Colliers noted that some 300,000 square meters of office space are expected to be available from 2017 to 2019 from projects such as Philam Life Center, Central Bloc BPO Towers 1 and 2, GT Time Square, and Cebu Exchange.
Sustaining the expansion of KPO firms in Cebu will depend on the quality of graduates the city produces. Of around 30,000 Cebu graduates in 2017, 25% are expected to have business degrees while a combined 35% come from engineering, IT, math, and medical courses.
“We see Cebu’s shift to higher-value outsourcing being sustained by an ample supply of graduates with relevant college degrees… Meanwhile, the local government should grant additional incentives to KPO companies that will provide free training to college students and graduates,” the firm said.
Next to Metro Manila and Cebu, Colliers sees Clark, Cavite, Laguna, Iloilo, and Bacolod as areas with the potential to become the next KPO hubs, Colliers Research Manager Joey Roi H. Bondoc said in an e-mail.
“(Bacolod) is a key hub for health information management (HIM) while Iloilo is being groomed as a feasible location for game development services,” Mr. Bondoc said.
Mr. Bondoc said that Cavite and Laguna have been catching up based on outsourcing investments due to the large number of graduates they produce each year. With 26,000 graduates annually, one third are accounting or business degree holders while 40% are graduates of engineering, math, medical, and allied fields.
“The expansion of the skilled labor pool in Cavite and Laguna will be supported by a 3% annual population growth, higher than the national average of 1.7%. This should support the eventual shift to KPO,” he added.
Meanwhile, the presence of some established large universities in the Angeles-Clark-San Fernando corridor in Pampanga makes the area another viable source of outsourcing talent, the company said. With over 10,000 graduates every year, one-third hold business degrees while around half graduated in the engineering, IT, math, and medical fields.
here’s an article from business.inquirer.net correspondent, Amy R. Remo :
A Country to Watch
The Philippines is expected to remain a stellar performer in the Asia Pacific, and a country to watch for.
In the latest report of commercial real estate services firm Cushman & Wakefield, the Philippines was identified as one of the region’s emerging markets, which means that the country can offer new investment opportunities that would provide the desired yields.
“The Philippines is still projected to be a stellar performer in the Asia Pacific region for the coming years, despite concerns over a recent shift in foreign policy direction away from the United States and towards other Asian countries,” the firm said in its report entitled, Betting on Asia Pacific’s Next Core Cities.
“This is due in large part to the economy being heavily driven by local demand and consumption. Investments are playing a bigger role in the country’s development as the administration hopes to lift the country higher from the status quo,” the report stated.
On the real estate front, high end and prime office spaces still benefit from stable demand, largely driven by the Information Technology-Business Process Outsourcing (IT-BPO) industry, the report added.
“Rental yields are projected to be stable at around 7 percent over the next few years, making strata-title offerings appealing,” it further noted.
Apart from Manila, Bangkok, Jakarta, Kuala Lumpur, Ho Chi Minh, and Mumbai were also named as emerging markets.
“The region’s emerging markets will also offer investors the opportunity to tap into its long-term growth fundamentals, which will become increasingly viable due to sustained reforms and economic initiatives,” the real estate services firm said.
The report further identified Asia Pacific’s next core markets namely Australia, Tokyo, Hong Kong, Shanghai and Seoul, which are reportedly “poised to maintain their relevance and predominance (in the region) over the next five to 10 years.”
Investment climate
For this year, Cushman & Wakefield said it expects the investment climate in the Asia Pacific region to stand out.
This was on the back of a steady economic growth in Asia Pacific, continued job creation, and liquidity in the region, all of which are expected to provide impetus for strong office asset performance, the firm said.
“Indeed, the dynamics point to another vibrant year of investment activity,” it stressed. “A wide range of buyers and sellers are also repositioning portfolios as they recalibrate their strategies in light of continuing economic and office market momentum in the region and generally accommodative financial conditions.”
Meanwhile, Cushman & Wakefield also noted five important transitions that could help fuel the favorable investment climate in the region. These are as follows:
Real estate going public
Real estate in Asia Pacific has become an established investment asset class as institutional investors, including financial intermediaries, Real Estate Investment Trusts (REITs) and public developers, have dominated investment activity over the last two years.
Policy trumps politics
Economic policy uncertainty is on the rise given changes in leadership and protectionist trade policies. It is expected that political developments will only pose a “slight downside risk to the outlook… as leaders increasingly focus on stability and growth in Asia Pacific.”
Asia’s great wall of capital
Chinese capital has increasingly shown its heft, especially as outbound investments continually set records over the last five years. Such flow of capital is not likely to change over the long term as investors are keen to put their capital to work.
Follow the infrastructure
Investments in infrastructure will be a key economic stimulus tool in many markets across the region. Improvements should spur more rapid economic growth and urban development, and improve the emerging markets’ standing.
Alternative assets are hot
Data centers remain lucrative in the region, as more consumers turn online for shopping and data needs for cloud-based systems. Student housing, retirement living, and healthcare are increasingly popular alternative property types.
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Robert G. Sarmiento Properties
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