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PROPOSED OFFICE: A UNIQUE
INVESTMENT OPPORUNTINITY
WHY INVEST IN COMMERCIAL PROPERTY?
• NO NEED FOR INTERIOR DECORATING– Potential tenants usually pay to fit-out
(interior decorate) their units• LONGER LEASES
– Average lease rate in BGC is 3-5 years– Spend less time stressed when your
residential tenants 1 year term is almost over
• PLETHORA OF LEASING AGENTS– You will be able to have multi-billion dollar
companies like Jones Lang LaSalle, CBRE, Colliers and KMCMag lease your unit
– No need to rely on a single broker to help you lease
• PRIME FACTORS– Apart from other developments by being
located within the city center, this building is integrated into a master planned community
Why invest in Commercial Real Estate:
• Capital appreciation– Colliers predicts BGC land values to
increase by 9.8% in 2014*– Combination a world-class office building,
an emergent business district, constricted supply and Ayala brand name should contribute to gains in capital appreciation
• Constricted supply– JLL expects a market shortage of offices
by 2016 with current vacancy rates already at 0.96% for BGC as of Q1 2014
– Short supply = higher demand = higher rent/re-sale value
– Headline rate for Ayala’s BGC offices is 875 per square meter with a 10% rental escalation rate**
* Colliers Q4-2013 Market Overview**APMC Rental and Escalation Rates as of May 2014
Why invest in Commercial Real
Estate:
Return On Investment = Yield on InvestmentCost of Investment
= 875/sq.m. X 12 months/yr.165,000/sq.m. (gross of VAT)
= 6.3 % per annum vs. T-bills rate of 0.31%TD rate of 2.48%SD rate of 5.50%
* Based on current rental rates of High Street 2nd floor offices
NOTE:Prevailing lease rate is P800/sqm on GFA, converted to P940/sqm on GLAT-bills : Treasury billsTD : Time DepositSD : Savings Deposit (Peso)*figures are based on BSP per annum rates as of April 15-19, 2013
Return on Investment
Fort Bonifacio Rental Projections:
• Based on APMC’s current lease rate of 875 psqm at a rent escalation rate of 10% per annum
Rent Escalation (P.A.)
ProjectedRental Rates
(2018)
Return on Investment
Low End (3%) 985 psqm 7.1%Mid End (5%) 1,064 psqm 7.7%Current (10%) 1,281 psqm 9.3%
Stable Rental Potential
• Since offices have a minimum lease length of 3-5 years, your property gets rented and stays rented
• Proposed office will be located on the corner of 11th street and 32nd avenue
• Located next to an Ayala Mall• One of the highest visibility locations within
BGC
Typical Reservation Details and Payment Schemes
How much is the reservation fee?− Php 100,000 per unit and Php 50,000 per parking to BGSouth
Properties Inc.,
What are the payment terms and corresponding discounts?
CASH TERMS− Cash 30 with 8% discount− Cash 60 with 7% discount− Cash 90 with 5% discount
DEFERRED TERMS− 50% DP, 50% over 48 months with 2% discount− 30% DP, 70% over 48 months
PROMO TERM− 20% DP, 80% over 48 months
Standard bulk discounts will apply.