AMID market volatility, the property arm of the SM Group of Companies remains positive on its growth, particularly in the burgeoning bayshore area, where its sprawling Mall of Asia (MOA) Complex is located.
“We continue to be very bullish about the market. We think this market volatility is temporary. It will go down eventually,” SMPHI-Commercial Properties Group (CPG) Senior Vice President (SVP) David L. Rafael said on Friday during the groundbreaking ceremony of their Four E-Com Center in Pasay City.
With the ever-expanding business-process outsourcing (BPO) industry, which currently occupies around “75 percent to 80 percent” of corporate buildings erected within and outside Metro Manila, it will remain the main driver of office demand in the country.
“What is happening now is that there is another emerging component called ‘shared service,’” the executive said. “In other words, these are multinationals that are outsourcing certain functions [but] exclusively for them.”
From the roster of SMPHI’s mixed-use developments nationwide, the MOA Complex has seen massive office take-ups for its existing corporate towers.
At present, One, Two and Five E-Com centers are fully occupied, of which 75 percent is comprised of BPO locators and call centers.
Rafael attributed this to their careful planning of this emerging lifestyle hub, complete with business and residential projects.
“The beauty of the MOA Complex is that we have built-in constraint in our density here. With the height restriction, we can only build so high because of our proximity [to the bay]. So that caps how much density we can put in the development,” he said.
Unlike other commercial business districts (CBDs) equipped with an average of two to four lanes in their major thoroughfares, the MOA Complex has six lanes on both sides on the average, thus, accommodating more volume of vehicles and people, he said.
Apart from the challenging traffic and parking situation in other CBDs, he said, companies are also considering the talent pool, environment and accessibility of the area they are moving to.
Such factors, he added, would continue to create an impact on their rental rates in the coming years.
Priced at P600 to P620 per square meter (sq m) a month, the average lease fee in the MOA Complex, according to the SVP of SMPHI-CPG, is “20 percent to 25 percent” lower than in Makati City and Bonifacio Global City (BGC) in Taguig.
As per the Real Estate Market Insight-December 2015 report of Pinnacle Real Estate Consulting Services Inc., the monthly weighted average costs of Grades A, B and C buildings in Makati stand from P675 per sq m to P865 per sq m; and P870 per sq m in BGC.
“That’s closer [to them now]. When we started One E-Com Center [in 2008], the difference was almost half. But slowly, as we build more critical mass in the area and become more known as a business district, there is now a narrow gap in our rental rates vis-a-vis BGC and Makati,” Rafael said.
SMPHI has major business interests in banking, retail and property segments. To date, it has developed key establishments in the residential, office, hotels and other leisure-oriented projects. The company posted a net income growth of 70 percent in the first nine months of 2015, with consolidated revenues rising to P52.2 billion.
Rental revenues from the subsidiary’s retail and commercial spaces comprise 56 percent of this growth.
Source: Business Mirror | January 26, 2016
http://www.businessmirror.com.ph/sm-prime-sees-rental-rate-spike-in-bay-area-building-projects/
