FALLING PROPERTY VALUES SEEN IN NEXT 12 MONTHS

Monday, December 01, 2008 [ manilatimes.net ]

By Darwin G. Amojelar, Reporter

PROPERTY values in the Philippines will fall over the next 12 months amid the current global financial crisis, Colliers International Research said.

In its latest Philippine market overview, the property research firm said land values in the traditional business districts have peaked in the third quarter at an average of P297,300 per square meter in the Makati Central Business District (CBD) and P132,900 in the Ortigas Center.

Given the current economic uncertainty and supply build-up in both the office and residential markets, appreciation from current levels is not expected over the next 12 months, Colliers said.

“Property values have started to correct particularly in the office segment with the presence of considerable office space available in alternative locations. This trend is expected to continue in the next 12 months with investors also taking a cue from troubled financial markets that currently affect the country’s macroeconomic performance,” the research firm said.

Philippine economic managers recently revised the country’s gross domestic product (GDP) growth forecast to between 4.1 percent and 4.8 percent this year and 3.7 percent to 4.7 percent next year.

Despite the economic uncertainty, Colliers however noted that demand from both new entrants and expansion in the business process outsourcing (BPO) sector appears to be holding up.

“Several market commentators have suggested the rationale for off-shoring and out-sourcing can only be strengthened as corporate profits come under pressure in developed economies now facing recession and there is a strong logic to this argument,” the research firm said.

Decision-making however, will slow with some expansion planned for the fourth quarter already deferred until the first half of next year, it said.

At end-September, vacancy in the Makati CBD stood at 2.4 percent, a marginal fall over the prior three-month period. Vacancy in Premium and Grade A buildings eased as tenants relocated to lower cost locations or buildings.

The research firm said this trend would accelerate over the next six months with significant relocations planned from Makati’s best buildings. Office rentals in Makati are also expected to go down, as accommodation options are available in secondary and suburban locations, Colliers said.

“As economic growth slows, weaker expansion demand is anticipated from traditional [non-BPO] CBD office space users. Across Metro Manila, rents are anticipated to tend downwards at 3 percent to 5 percent per quarter through to the second half of 2009,” the research firm said.

For malls, average retail rents will increase slightly by the end of this year, it said.

In Ayala Center, the average retail rents are almost steady at P1,230 per square meter per month and expected to increase to an average of P1,235 by the end of this year, as the peak season for retail arrives.

Ortigas Center retail rental rates are up by one percent to P996 per square meter per month compared with P986 during the second quarter.

Retail vacancy stood at 13 percent at end-September, a slight increase from the second quarter’s 12.7 percent.

“Vacancy should remain in these levels despite additional space to be added by the end of the year because of expected heightened demand in December,” Colliers said.

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LANDCO TAKING CAUTIOUS STANCE

Vol. XXII, No. 91 [ BusinessWorld Online ]

Monday, December 1, 2008 | MANILA, PHILIPPINES

ZAMBOANGA CITY — Landco Pacific Corp. will take a cautious stance next year amid a jittery market and the threat of a possible credit crunch.

In an interview, Landco President Alfred Xeres-Burgos, Jr. said the Metro Pacific Investments Corp. property unit would focus on existing projects rather than expand.

"We are conserving our cash. We don’t know if there will be a credit crunch. If there is a credit crunch, obviously, most of the companies in this industry will suffer," he said.

Landco officials were here at the weekend to launch an upscale residential project.

"It is very hard for anybody at this stage to project what the sales figures will be in 2009. We are trying to make sure... we’re not caught flat-footed," Mr. Xeres-Burgos said.

He said their peers were continuously monitoring sales. "It’s not a bullish market as it used to be. However, the downturn is not here yet, so we don’t know what will happen. As a prudent company, just like everybody else in this industry, we will be very careful in 2009," he said.

Landco Executive Vice-President Francis V. Ceballos said the company would just complete its expansion projects that started this year and last year.

"Given the outlook for next year, we feel it’s more prudent to continue developing first what we have [started]," he said, adding that "we can’t be too aggressive or reckless."

Mr. Xeres-Burgos said Landco was concentrating on its Davao and Zamboanga operations in Mindanao.

Landco opened its Woodridge Garden Village on Sunday with a start-up capital investment of more than P400 million.

Rosemarie T. Napao, Landco project head in this city, said at least 670 lots would be available inside the 24-hectare resort-like subdivision.

The Woodridge project is the biggest residential project in the city, underscoring Zamboanga’s potential for other real estate companies. Filinvest Development Corp. is another major realty firm operating here.

Ms. Napao said Woodridge would have a southern California architectural theme.

"We are enjoying brisk sales as projected and it looks like we are hitting the market that we originally targeted. Now it’s a challenge for us to [ensure] the quality of our products," Mr. Xeres-Burgos said.

Earlier, Landco said it was spending P3.5 billion this year for new projects and expand existing ones to boost revenues. — Darwin T. Wee

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MARCOS SEEKS APPEAL ON RULING OVER DISPUTED PRIME PASIG PROPERTY

Vol. XXII, No. 91 [ BusinessWorld Online ]

Monday, December 1, 2008 | MANILA, PHILIPPINES

THE SON of former President Ferdinand E. Marcos has appealed a court ruling over a prime property dispute in Ortigas Center, Pasig City.

Ilocos Norte Rep. Ferdinand R. Marcos, Jr. (2nd district) asked the Sandiganbayan to reconsider its decision junking the lawmaker’s motion for intervention in the ownership dispute over 18.4 hectares of prime property in what previously known as "Payanig sa Pasig."

The property has since been fully developed into a commercial strip now known as Metrowalk bounded by Ortigas, Meralco and Doña Julia Vargas avenues.

In his 12-page motion filed on Nov. 27 before the first division, Mr. Marcos said that there had been no previous ruling on his family’s claim.

"Hence, the principle res juridicata does not apply," Mr. Marcos said, referring to a legal principle barring re-litigation of a case previously ruled upon with finality.

On Oct. 31, 2008, the Sandiganbayan invoked res juridicata in dismissing Mr. Marcos’ motion for intervention, noting that the lawmaker sought similar cases under Civil Case (CC) 0169 filed in 1996 by hi mother, former first lady Imelda R. Marcos.

CC 0168 was dismissed by the third division in 1998 and eventually by the Supreme Court in 2003 on an appeal by Mrs. Marcos.

However, Mr. Marcos said CC 0168 was dismissed due to technical grounds, thus the res juridicata Sandiganbayan did not address his motion for intervention.

"CC 0168 was dismissed in the Sandiganbayan principally because of the unresolved issue of representation of the estate of the late President Marcos, and it was thrown out by the Supreme Court for late filing and for lack of proof of service," he said. "Res juridicata does not apply in this instance because not all of its requisites are present. There was no judgment on the merits," Mr. Marcos added.

The Marcoses are seeking permission from the anti-graft court to jointly litigate CC 0093 (Ortigas and Co. Ltd. Partnership vs. PCGG) and 0147 (Ricardo S. Silverio vs. PCGG).

On Oct. 27, 2008, the Court of Appeals sided with the Presidential Commission on Good Government (PCGG), which argued that the former "Payanig sa Pasig" had been relinquished to the government in 1986 by Marcos crony Jose Yao Campos.

Mr. Campos used to be the owner of the controlling stake in Mid-Pasig and Independent Realty Corp., which owns the property. After the overthrow of President Marcos in 1986, Mr. Campos voluntarily surrendered the asset in exchange for immunity from suit. — Jhoanna Frances S. Valdez

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8 Bohol towns streamline licensing process

[ Manila Bulletin Online ] December 1, 2008

TAGBILARAN CITY (PIA) — Streamlining business process to make them investor friendly, Bohol Micro, Small and Medium Enterprise Development (MSMED) Council has accomplished with a partner the forging of agreements in training for eight towns here, a highlight in the first Bohol MSME Xperience held at the Island City Mall recently.

Early surveys pointed out that cumbersome business processes here have become turn-offs for investors wanting to sow capital in the country.

Cumbersome process here comes in lengthy registration and in unreasonable licensing steps.

These have been identified as major discouraging factors of investors’ while the country loses capital that could have been important in perking up local economies.

Here, the province of Bohol tapped the support of the German Development Foundation (GTZ) through its Small and Medium Enterprise Development for Sustainable Enterprise Promotion (GTZ-SMEDSEP) program.

Now, at least eight towns have undergone two training workshop modules, sources at the Department of Trade and Industry (DTI) pointed out.

The GTZ, in their belief in the promise of putting up the needed vigor in small and medium enterprises in the countryside would jumpstart local developments has been kind enough to fund the pioneering activity, DTI said.

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