UFC-Que Choisir said a late-December poll of 80 three- and four-star hotels showed that on the night of July 26, the day of the Olympics’ opening ceremony on the banks of the Seine river, a double room will cost 1,033 euros ($1,128) on average, compared to 317 euros two weeks earlier on the night of July 12.

It also said 50% of these hotels reported being already fully booked that night, while 30% required a minimum booking of at least two nights and some as many as five nights.

The average required minimum stay was 3.4 days, for an average cost of 867 euros per night, UFC added.

“Olympic room rates! Paris hotels are not holding back, their room rates are on fire,” UFC said.

It said one three-star hotel had hiked its price for a double room to 2,083 euros compared to 304 euros two weeks earlier, while one four-star hotel required a minimum booking of four nights at 2,095 euros per night.

Paris’s tourism office expects some 16 million people to visit the wider Paris region for the Olympics and Paralympics, putting pressure on every level of the housing and hotel market.

Airbnb has called on Parisians to put up their homes for rent during the games in order to keep prices down.

North of Paris, in the Seine-Saint-Denis area where the Olympic Village is under construction, thousands of migrants, asylum seekers and Roma squatting empty buildings have been evicted, aggravating the city’s homelessness problem.

The games will run from July 26 to Aug. 11. — Reuters

The Philippine regulatory environment has become more accommodating to foreign retailers planning to enter or expand in the Philippines. We are seeing greater interest from foreign retailers planning to locate in the country, contributing to greater absorption of retail space across the Philippines and potential increase in lease rates, which should benefit property firms with retail foothold.

This piece lays out recommendations on how mall operators and retailers can future-proof their businesses amid the waning impact of revenge spending and increasing cost of basic commodities. Retail stakeholders should also look at global economic and geopolitical issues that might hamper the sector’s growth.

INNOVATIVE USE OF SPACES TO ENTICE MALLGOERS
Colliers believes that mall operators should reactivate their event spaces or activity centers and attract more mallgoers by organizing events such as trade fairs, exhibits and concerts to drum up retail interest.

Meanwhile, food and beverage (F&B), clothing and footwear retailers should consider opening pop-up stores, especially those testing the Metro Manila retail market which is starting to rebound post-COVID. This is particularly important for foreign players that are planning to gauge the local market’s reception.

FUTURE-PROOF HIGH-DENSITY RETAIL SPACES
High-density retail spaces such as food courts and family entertainment centers were greatly affected by COVID lockdowns. Now that restrictions have eased and consumers are starting to go out and gather, Colliers recommends that retailers continue encouraging social distancing measures and implementing regular sanitation and other health and safety protocols.

Now is an opportune time to ramp up marketing of these high-density retail spaces. These retail spaces also raise consumer traffic and entice mallgoers to stay longer and spend more.

LAUNCH OF RETAIL REITS
Colliers believes that property developers with retail footprint should consider divesting malls into their real estate investment trust (REIT) portfolio, especially now that the retail segment is recovering. Malls generate recurring income and are now a viable REIT asset class as vacancy rates are stabilizing and lease rates are starting to go up.

In our view, developers should carefully assess which retail outlets to add to their REIT portfolio and should consider projected mall space absorption as well as profiles of retailers willing to take up brick-and-mortar spaces.

Developers should take advantage of renewed interest from foreign retailers as well as continued expansion of Philippine economy mainly driven by personal consumption. Foreign players that have previously pulled out of the Metro Manila market are making a comeback and this is indicative of the sector’s rebound.

LOCK IN SPACE IN PRIME LOCATIONS
Colliers believes that retailers should be quick in securing mall spaces in key business districts across Metro Manila now that vacancy rates are stabilizing while rents are gradually increasing.

In our view, this trend is likely to persist in the market as footfall is rebounding across the capital region. We still see substantial vacancies in selected malls in Quezon City, Bay Area, and Alabang. Retailers should further explore the viability of opening physical space in these locations, especially in sub-locations where more office and residential buildings are likely to be completed. Looking forward, we see a heightened competition for prime retail spaces in central business districts in Makati, Ortigas Center, and Fort Bonifacio.

SEIZE THE DEMAND FROM NEW FOREIGN RETAILERS ENTERING THE PHILIPPINE MARKET
Colliers sees an improving demand for physical space from foreign retailers. We attribute this to improving consumer demand on the back of sustained macroeconomic expansion as well as enactment of measures that further relax the country’s retail regulatory environment.

Mall operators should capture demand from foreign retailers planning to enter the country by taking into account their size and fit-out requirements.

AMPLIFY HOLIDAY MARKETING INITIATIVES
Colliers believes that retailers need to amplify their online and offline strategies especially now that demand is likely to increase due to holiday spending.

In our view, the release of holiday bonuses and additional remittances from Filipinos working abroad are likely to boost Filipinos’ purchasing power in the fourth quarter of 2023 and retailers and mall operators should seize this additional push from Filipinos’ propensity to spend.

REACTIVATE ACTIVITY CENTERS AND CURATE EVENTS
In our view, mall operators should maximize the consumers’ willingness to visit brick-and-mortar mall spaces and participate in various activities held in malls’ activity centers.

Events such as wedding fairs, bazaars, and even housing summits can entice more consumers to visit malls, stay longer and even spend more. Colliers believes that mall operators and retailers should closely coordinate in curating events that will be held in malls’ activity centers.

REASSESS IDEAL RETAIL MIX
In our view, mall operators should carefully reassess the retail mix that they will be offering their consumers given the entry of more foreign retailers and expansion of local ones. This will especially be crucial for new malls that opened in the fourth quarter of 2023 and are planning to maximize holiday-induced spending from Filipino consumers.

While majority of retailers that will occupy physical mall space will be from the F&B segment, mall operators should thoroughly assess the ideal retailers that they will be featuring in their malls alongside the typical F&B, accessories, and personal care retailers.

Mall operators should carefully study which retail mix will provide them with optimal level of spending from consumers as well as sustained footfall for the long term.

RAMP UP OMNICHANNEL STRATEGY AND CASH IN ON HOLIDAY SPENDING
Mall operators and retailers should work hand in hand in improving the omnichannel shopping experience of their consumers. While Filipinos have returned to brick-and-mortar shopping, retailers should also consider the segment of Filipino shoppers that prefer to buy items online.

In our view, redesigning of physical mall spaces should be complemented by the improvement of retailers’ online shopping platforms. We forecast a continued reconfiguration of physical mall spaces and we see this trend even after holiday-induced spending in the last quarter of 2023.

Joey Roi Bondoc is the research director for Colliers Philippines.

While aggressive monetary tightening and the pandemic have had a more pronounced impact on commercial property in the US and Europe, it’s residential housing that is under more strain in Asia. One of the worst hit nations, South Korea, saw  the steepest home price slump in 25 years while a construction firm’s repayment struggle has rekindled fears of repeating the credit market turmoil in 2022.

“Countries that had high consumer debt or balance sheet burden will be areas that you want to focus on,” said Kheng Siang Ng, head of Asia Pacific fixed income at State Street Global Advisors. “Korea is one of them. Housing markets have been softening.”

Here are some places where property market risks have the potential to boil over in 2024:

SOUTH KOREA
Korea’s property market is showing the most strain after China in the region, with prices in 2023 falling by the most in a quarter of a century after years of growth. The weakness is the direct outcome of moves by the Bank of Korea — the first major Asian central bank to kick off the current monetary tightening cycle in 2021 — to push its policy rate to a 15-year high.    

Turning the weakness into a crisis was a theme-park developer’s debt blowup in late 2022 that snowballed into the worst meltdown in the country’s credit market since the global financial crisis. While a suite of government rescue measures stabilized the situation, an engineering and construction company’s request to reschedule debt in late December prompted authorities to pledge more support.

Bad debts for both households and companies are piling up and the Bank of Korea said risks related to project financing debt — a type of security used to finance construction that triggered the 2022 crisis — are likely to increase next year. Even so, officials say the country’s financial system will generally remain stable. 

The “potential restructuring of real estate project financing loans from the middle of 2024 following the election in April 2024 could raise volatility in the short-term money market at least temporarily,” said Citigroup, Inc. economist Kim Jin-wook.

INDONESIA
The local central bank’s most aggressive rate hikes since 2005 put heavily indebted home builders such as PT Lippo Karawaci and PT Agung Podomoro under pressure, as it crimped household purchasing power. A weak currency made matters worse, by increasing the cost of servicing their soon-to-mature dollar debt, forcing them to resort to asset sales to raise cash.

Fitch Ratings said at the end of November that “some kind of default is probable” on Agung Podomoro’s $132-million bond due in June 2024 after it has canceled an offer to buy back part of the unsecured notes. Refinancing risks for Lippo Karawaci, Lippo Group’s Indonesia unit, also are rising, according to Fitch, which downgraded the firm’s dollar note due in January 2025 to CCC+ in November.

But the prospect of an end to Indonesia’s policy tightening is giving dollar-denominated property notes an uplift, as investors anticipate an improvement to real estate demand.

Fitch has predicted a recovery in local corporate bond sales, citing increased refinancing needs and a more supportive economic environment. Borrowers are expected to continue to prefer shorter-tenor issuance in 2024, as there is higher demand for short-term notes amid rate uncertainty, Fitch said.

VIETNAM
The government’s ambitious anti-graft campaign upended Vietnam’s property sector already plagued by oversupply, impeding corporate bond issuance that triggered a liquidity crunch and missed payments by borrowers. But regulatory interventions and multiple interest rate cuts have slowed the downward spiral.

“Vietnam’s real estate market has had an extraordinarily challenging year, but we believe the worst of the downturn has now passed,” Michael Kokalari, chief economist at VinaCapital Group Ltd., wrote in a report. “Mortgage rates peaked at as high as 16% at some banks in early 2023 but subsequently dropped dramatically.”

Still, signs of trouble remain. Some banks have thin capital buffers and some have high exposure to real estate, according to Sue Ong, credit analyst at S&P Global Ratings.

The poster child of the property woes is Novaland Investment Group Corp., one of the country’s biggest developers, notable for having a US-currency bond. The company agreed a maturity extension on holders of its $300-million convertible note, after an interest payment failure in July.

While the price of the note picked up on news the firm had struck a deal with creditors, the note is still indicated at 36 cents on the dollar, according to Bloomberg-compiled data. That’s a deeply distressed level showing low investor expectations for full debt recovery.

Perpetual dollar bonds issued by several of the city’s developers suffered their worst selloff in years in August, amid worries about soaring financing costs and the spillover impact of China’s real estate woes. Leading the declines were New World Development, Co. — one of Hong Kong’s most indebted developers. It’s debt underperformed industry peers this year.

Behind investors’ nervousness is a local property slump that saw the city’s home prices drop to the lowest in almost seven years. Revenues from office buildings and retail space have also weakened following three years of stringent COVID curbs and the Federal Reserve’s historic monetary tightening.

Demand was so depressed that Hong Kong developers were forced to cut home prices significantly, a tactic they hadn’t deployed for years, while banks struggled to lure buyers for foreclosed homes at equally deep discounts.

“We are cautious about developers in Hong Kong with large exposure to residential and commercial properties in lower tier cities in mainland China as well as those with large office portfolios outside prime districts due to the elevated vacancy rate and continued negative rental revisions,” said Zerlina Zeng, senior credit analyst at Creditsights. “We continue to underweigh Hong Kong developers with higher leverage due to the rising HKD funding costs, which would persist in 1H24.”

AUSTRALIA
It’s a slightly different form of property stress in Down Under, where the Reserve Bank of Australia’s (RBA) aggressive tightening cycle has raised concerns over households’ ability to stomach higher interest rates.

The International Monetary Fund (IMF) has indicated the country is liable to feel the effect of higher borrowing costs, at a time when a large chunk of home loans fixed at record-low rates during the pandemic are set to be rolled over to higher, floating rates. In Australia, more than 50% of mortgages have variable rates, according to the IMF.

The RBA warned in October that a small but growing number of households were in the early stages of financial stress. About 14% fixed-rate borrowers expected to face a rise in mortgage payments of more than 60% once their maturities expire, it said.

Data from the Australian Prudential Regulation Authority on banks’ residential property exposure show new non-performing loans climbing to a three-year high though they still remain relatively low. — Bloomberg

FILINVEST LAND, Inc. (FLI) has opened its latest amenity area for its Sandia Homes residential development in Tanauan City, Batangas.

Sandia Homes’ amenities include a clubhouse, basketball court, playground area, and a swimming pool.

“These amenities are more than just recreational spaces; they are designed to foster a sense of community, promote wellness, and enrich the lives of those who call Sandia Homes their home,” Ethel Balicanta, FLI vice-president, said in a statement.

FLI aims to provide “a complete living experience” to raise the well-being of residents, she added.

Named after the Sandia mountain range in New Mexico, Sandia Homes is a community development under the smart-value brand Future of FLI.

Sandia Homes currently has 266 units available for sale. Lot sizes range from 60 to 75 square meters.

The property is situated near the South Luzon Expressway with easy access to schools and churches. It is 10 minutes away from the Tanauan City and Sto. Tomas City proper. — M. H. L. Antivola

After decades of ever-swelling footprints, the size of Americans’ newly built homes has begun to shrink, as high mortgage rates and increased building costs nudge both developers and buyers to look for ways to trim expenses. The median single-family home completed in 2022 was 2,299 square feet, down from 2,467 in 2015.

I understand the frustration about more homes being squeezed in per neighborhood if you dreamed of having a big yard, but the size of homes around America today is outrageous. It’s likely that those in the millennial and Gen Z cohort who grew up in homes with spacious bedrooms, spare rooms earmarked for the occasional guest and as many bathrooms as bedrooms became acclimated to larger houses. But it’s time to readjust expectations of our own homes to the reality of the current housing market and the environmental toll of living in such big spaces. With the average household hovering at around 2.5 people, we just don’t need such large dwellings.

It has always boggled my mind that many Americans assume 2,000 square feet is needed to accommodate a family of four. I’ve spent my entire post-college adult life living in New York City — one of the areas in the United States known for compact living. I also spent nearly six years of my childhood living in Japan, another place famous for small but efficient living spaces.

The desire to have extensive square footage is a largely American phenomenon. (Not uniquely American, though. Australia, New Zealand and Canada all have large homes.) Twenty-seven states have an average home size of more than 2,000 square feet, according to the 2022 American Home Size Index, which analyzes Zillow data. The next nine states had square footage north of 1,900.

Compare those numbers with the 1960s, when the median square footage of a single-family home was 1,500 square feet, according to census data, despite generally larger family sizes.

In the 1960s, only 16.8% of homes had four or more bedrooms, and only 10.1% had 2.5 or more bathrooms. By 2009, around one-third of homes had four or more bedrooms and nearly half had at least 2.5 bathrooms, according to a Census Bureau paper. By 2015, 38% of homes had three or more bathrooms, a figure not even tracked until 1987.

What about the emergence of tiny houses or #vanlife, you say? Those fads, in part a reaction to the Great Recession and the housing market crash, attract a lot of attention for their novelty, but zoning laws and practical considerations mean they will likely remain niche causes.

Personally, I’m not so diehard about small space living that I want to live in a 500-square-foot tiny house (generally seen as the maximum to qualify for that designation) with my husband, dog and any future children. However, I do generally find it strange to prioritize square footage for things like massive primary bedrooms, when you spend so little waking time there, instead of allocating square footage to common spaces and storage and being able to reduce the overall size of a home.

Even if potential homebuyers are wary of losing square footage and lot size, there are two major perks. Reducing the size of your home has significant financial benefits with lower utility bills, likely lower property taxes and the need to buy less stuff to furnish your space. Homebuyers can also feel good about reducing their overall environmental impact.

Given the rise in climate anxiety and environmental engagement among millennials and Gen Z, the shift to smaller-space living is a way to truly put their money where their mouth is. — Bloomberg Opinion

Property firms are maximizing REIT benefits and we see more property firms utilizing REITs to fuel their expansion within and outside Metro Manila as well as extend their exposure into other property segments.

The Philippine REIT market is primed for further diversification and developers should be on the lookout for other assets that can be divested into their REIT companies. Colliers believes that the further diversification of the Philippine REIT market bodes well for property firms, investors, and the Philippine property market in general.

Moving forward, Colliers sees an aggressive expansion of REIT companies in the Philippines. We even see some firms exploring the feasibility of divesting other asset classes including business parks, data centers, as well as co-working and co-living facilities. We even recommend that firms explore the viability of infrastructure and renewable energy projects.

In our view, further expansion and diversification of the Philippine REIT landscape is likely to benefit the country’s infrastructure development plan. We even see it supporting the Marcos administration’s push to ‘Build, Better, More.’

REIT firms and stakeholders should be mindful of the regulatory environment that they are operating in and should be updated of the proposed amendments to the REIT Law and how new measures and provisions are likely to stall or advance the sector.

Colliers encourages property firms to further test the market to capture opportunities from a constantly evolving and developing Philippine REIT sector. Diversification will be the name of the game.

Colliers encourages the government to be more supportive of developers’ REIT undertaking. The challenge for lawmakers and members of Executive department is to foster an accommodating and inclusive regulatory framework to ensure that  Philippine REITs become among the most competitive in the region. The advancement of Philippine REIT should not be stalled by any regulatory gridlock.

MONITOR REIT LAW AMENDMENTS
The House of Representatives has approved on third and final reading a bill seeking to amend the REIT Law of 2009. The bill’s features include requiring REITs to reinvest their proceeds “within one year from receipt of proceeds realized by the sponsor or promoter.” REITs are also required to submit a reinvestment plan to the Securities and Exchange Commission and Philippine Stock Exchange and secure a certification annually to prove that it is compliant with its reinvestment plan.

Colliers encourages REIT developers to constantly monitor the progress of these proposed amendments. A counterpart bill has yet to be filed in the Senate.

DIVERSIFY PORTFOLIO
Developers with REIT firms have been divesting other asset classes into their REIT vehicles to take advantage of the property market’s rebound. At the height of the pandemic, developers only divested office assets. As the government relaxed COVID-related restrictions and more economic segments reopened, other property sectors such as retail, hotel, and industrial also saw gradual recovery, making them viable asset classes to be utilized for REIT listing.

Non-traditional asset classes such as infrastructure projects (including toll roads), cold and self-storage facilities, data centers, and hospitals can also be infused into the property firms’ REIT vehicles to further attract more investors.

Developers should also explore the viability of other asset classes that generate recurring income such as co-working spaces and co-living facilities. Firms in other Asian countries even infuse business parks into their REITs and the feasibility of this asset class should also be explored moving forward.   

ASSESS OPTIMAL REIT PORTFOLIO MIX
Colliers believes that developers should assess the ideal portfolio mix that will provide the optimal yield for investors. Property firms should consider divesting asset classes that will provide highest dividend to investors based on these asset classes’ performance in the market.

Office and industrial are usually part of developers’ portfolio mixes but property firms should also look at other viable assets in the future, including retail and hotel.

LAUNCH OF RETAIL REITs
Colliers believes that property developers with retail footprint should consider divesting malls into their REIT portfolio especially now that the retail segment is recovering.

Malls generate recurring income and are now a viable REIT asset class as vacancies are declining and lease rates are starting to increase.

In our view, developers should carefully assess which retail outlets to add to their REIT portfolio and should consider projected mall space absorption as well as profiles of retailers willing to take up brick-and-mortar spaces.

Developers should take advantage of renewed interest from foreign retailers as well as continued growth of Philippine economy, mainly driven by personal consumption.

Joey Roi Bondoc is the research director at Colliers Philippines. Martin Aguila is a senior research analyst at Colliers Philippines.

MCDONALD’S Philippines said it will open its entire portfolio of 60 new stores next year with Green & Good elements, alongside an additional flagship store, as part of its commitment to environmental responsibility.

The company will have 160 Green & Good stores by yearend, surpassing its goal of 130, Adi T. Hernandez, assistant vice-president for corporate relations and impact at McDonald’s Philippines, told reporters on the sidelines of its seventh flagship launch at Ayala Cresendo, Tarlac last week.

“Green & Good is test and learn,” she said on creating tailor-fit environment-friendly innovations per store. “We get to really experiment around these stores to find which are the best stores to integrate certain solutions.”

Green & Good is a local McDonald’s sustainability initiative which considers green building solutions, utility efficient solutions, packaging and waste disposal, and sustainable active mobility (Bike & Dine areas), depending on store specifications, Ms. Hernandez noted.

Ms. Hernandez said the Green & Good stores are “very much a local platform and framework,” noting that other markets come here to learn from the example of McDonald’s Philippines.

The flagship store construction in Tarlac includes 25% recycled steel building frames, eco-pavers and bricks made from 1-2 kilograms of shredded plastic, and synthetic fiber for reinforcement bars.

John Jo Camacho, business development group manager at McDonald’s, noted how 7-8% of the store’s energy consumption is supplied by its 24 kilowatt-hour (kWh) peak solar panel rooftop, where 3,000 kWh is saved monthly.

The store also reduces electric consumption through its photo and motion sensors, solar lampposts (3,100 kWh/year), LED lights (3,625 kWh/month), a variable refrigerant flow aircon system (9,000 kWh/year), low-power water heater (530 kWh/month), and heat reflective glass panels.

Additionally, it minimizes water consumption through its low-flow urinals (46,000 liters/year) and rainwater harvesting tanks (6,000 liters/year).

Ms. Hernandez said sustainable solutions must be present in all segments of the value chain, from construction to actual operations. “If not, it’s going to be a one-off thing.”

“It’s not only better for the environment, it will also yield returns in the long run,” she added on McDonald’s way of business moving forward in the next year.

While a Green & Good store is about 15% more expensive than a regular store, Mr. Camacho noted the cost can be recovered in six to seven years.

Ms. Hernandez said McDonald’s is eyeing sites in mixed-use developments for its next stores.

“It’s more of the discipline needed to track, study, and learn from the data that we’re able to get from our Green & Good stores,” she noted as a primary challenge in fulfilling the company’s sustainability goals.

“There’s still a lot of opportunity from us to harness and process the data to make better solutions.”

However, she said Green & Good has made it easier for the company to onboard 80 crew members per store. “They understand the cause.”

McDonald’s Philippines is set to close the year with 50 new stores and 740 stores in total, according to Ms. Hernandez.

The two properties are located within the NUSTAR Resort, a nine-hectare, world-class integrated resort.

The NUSTAR Convention Center, which opened in June, is the largest and most modern convention center in Visayas and Mindanao. It has three ballrooms — the NUSTAR Grand Ballroom, the Fili Ballroom, and the NUSTAR Ballroom — as well as nine well-equipped meeting spaces which occupy a total area of 7,378.2 square meters (sq.m.).

Fili Hotel, the country’s first homegrown five-star hotel brand, is owned and operated by Robinsons Hotels and Resorts.

“What makes the NUSTAR Convention Center so enticing is its versatility,” Cristina Ong-Cruz, director for marketing and sales of Fili Hotel, said. “At our NUSTAR Grand Ballroom, for example, our clients and prospects are simply enthralled with the elegant, pillarless space that can comfortably seat 1,760 guests in a banquet setup, while even more can be accommodated in a theater setup, with up to 3,290 guests or delegates.”

The 492.8-sq.m. Fili Ballroom has a capacity of 340 guests in a round banquet setup.

The NUSTAR Ballroom, which offers 676 sq.m. of space, can seat 430 guests in a banquet setup or as many as 800 theater-style.

Fili Hotel has 379 rooms and suites. It also has a wide array of food and beverage outlets, such as Mott 32 modern Chinese restaurant; Xin Tian Di; Il Primo, an Italian-themed steakhouse; Fina; Fili Cafe; and Axis Bar.

“We are very excited to start bringing to life the fourth tower of AmiSa Private Residences. This development has a very special place to our hearts given its unique features and resort-like offerings. We believe our clients are also excited to call this haven their own where they can enjoy a relaxing life in Cebu,” RLC Residences Vice-President for Project Management Emmanuel Arce said in a statement.

Located at Punta Engano, AmiSa Private Residences is a leisure residential development. Units have balconies where residents can enjoy unobstructed views of the beach.

The first three towers of AmiSa Private Residences have been completed.

AYALA LAND, Inc. (ALI) broke ground on Thursday for its new 62-hectare eco-tourism estate called Arillo in Nasugbu, Batangas.

Arillo is ALI’s 52^nd estate — its first commercial and residential development on a mountainside, aiming to expand its footprint in the Western Batangas region, May P. Rodriguez, senior estate head at ALI, told reporters on the sidelines of the groundbreaking ceremony.

With its name pared down from the Spanish word amarillo, meaning yellow, Arillo is inspired by Mt. Batulao’s two highest peaks that turn yellow in December, which the site overlooks, Ms. Rodriguez said.

It is envisioned to be “a nature haven for life and leisure,” and a jump-off point for visitors and residents in the Tagaytay-Nasugbu area, she noted.

“Once built with the overnight facilities, those who are going up to Tagaytay for a daytrip can extend their stay with our amenities and attractions, and maybe go to Nasugbu for swimming on the next day,” she added.

The property is about 75 kilometers away from the central business district of Makati — an almost two-hour drive via the SLEX-CALAX-Aguinaldo Highway, with the upcoming Cavite-Tagaytay-Batangas Expressway expected to reduce travel time by at least 30 minutes.

“By early next year, the leisure town center will be operational,” Anna Ma. Margarita B. Dy, president and chief executive officer of ALI, said on the first development phase, which also includes a café, horseback riding trails, and canyon trails for Mt. Batulao.

“We still want to activate the place first by selling the first few [12] lots,” Ms. Rodriguez said, adding that ALI is also eyeing six to eight restaurants to open along the facade of the property.

It has partnered with The Blue Leaf for a 5,000-square meter events place expected to be operational by 2026, and El Kabayo for horseback riding facilities in late first quarter of next year, Ms. Rodriguez said.

ALI may also tap Seda for the property’s first mountainside resort, she added.

“Only about 30% of the land is developable,” she noted on the need to maximize the site’s offerings and conserve the views through medium-rise buildings (MRBs), and not just residential lots.

“We are still talking to residential groups for [the construction of] MRBs… Our highest will be six floors.”

“It’s going to be very special,” Ms. Rodriguez noted that Arillo is selling its commercial lots at P100,000 per square meter, up from the P50,000-60,000 in Nuvali.

Additionally, Arillo has partnered with the Center for Conservation Innovation Philippines, Inc. to conduct biodiversity studies and implement sustainability programs in the area.

ALI is having conversations with Haribon Foundation for the Conservation of Natural Resources, Inc. for the adoption and conservation of five hectares in the Mt. Batulao area, which can be expanded in the future, according to Ms. Rodriguez.

DLI President Ricardo “Cary” F. Lagdameo told BusinessWorld that the company will develop a high-end horizontal project with a commercial component on a 4-hectare property in Puan.

“The plan right now is to offer lot only. We are trying to see if we can consolidate it with the other properties around the area. It’s an exclusive community, not density,” he said.

He said the company is planning to offer more than 60 lots.

DLI is currently in the process of securing permits for the project.

“It will all depend on permits, we are ready to start,” Mr. Lagdameo said.

Meanwhile, DLI is accelerating the construction of the other projects.

For its Bridgeport project in Caliclic, Island Garden City of Samal, DLI is already constructing the first out of the four buildings.

“We’re already on the second floor, it’s coming up,” Mr. Lagdameo said.

DLI’s newest mixed-use development, Bridgeport, features low-density condominium buildings, premium open lots, a condotel, commercial and dining areas, and an exclusive marina.

In Agriya, Mr. Lagdameo said they are already turning over houses to homeowners in the subdivision component.

Agriya is an 88-hectare agritourism development located in Panabo City, Davao del Norte. Agriya Panabo has four components: residential, commercial, institutional, and agritourism. — Maya M. Padillo

Sanremo Oasis, a mid-rise condominium, is part of City di Mare (CDM) along South Road Properties in Cebu City.

The Italian-inspired Sanremo Oasis has seven existing buildings consisting of 1,096 units.

“The eighth tower completes the residential cluster that currently takes up 3.4 hectares of CDM,” the company said in a statement.

Units at Sanremo Oasis range from studio units (22 square meters), one-bedroom units (28 sq.m.), and two-bedroom units (32 sq.m.).

It offers residents a resort-like lifestyle with amenities such as a swimming pool, pocket parks, fitness gym, basketball court, jogging trail, kids’ playroom, and a clubhouse. The eighth building will have a roof deck garden and retail strip.   

“Sanremo’s new residential tower at CDM addresses the increasing demand for residential options within South Road Properties which is rapidly becoming the next economic hub in the Queen City of the South as the local government continues developments within the district,” the company said.

South Road Properties is also a registered economic zone with the Philippine Economic Zone Authority.

The Ube Express service gives travelers a convenient, and accessible way to go to the airport.

The UBE Express terminal is located along Robinsons Galleria EDSA driveway. Each bus can accommodate up to 39 passengers and their luggage.

The bus leaves Robinsons Galleria for NAIA Terminal 1,2, 3 or 4 starting at 7 a.m. The bus departs NAIA Terminal 3 to Robinsons Galleria as early as 5:45 a.m.

The P150 fare can be paid through cash or Beep Card.

UBE Express also operates its point-to-point airport services in Robinsons Manila and Robinsons Sta. Rosa Laguna.

Robinsons Manila terminal is located along Midtown driveway beside Arya, while Robinsons Sta. Rosa Laguna terminal is located at the bus bay in front of the mall.

Follow Robinsons Malls Official, Robinsons Galleria and Robinsons Manila social media pages for more information and updates on Ube Express services and dispatch schedules.

THE WORLD EXPO might have a quaint quality for many in the English-speaking world — recalling events such as the 1982 World’s Fair in Knoxville, Tennessee, perhaps most familiar through its appearance in The Simpsons, where the exposition’s symbolic Sunsphere has become a disused storage site for wigs.

But in large parts of the world, the exhibitions are still big business — and increasingly, politically fraught. The expo is considered by many governments to be, along with the Olympic Games and football’s World Cup, one of the “big three” events that can elevate a country’s global standing.

That was the goal of South Korean President Yoon Suk Yeol, whose country has hosted two of the three events and aimed to complete the trifecta with a 2030 Expo in the second city of Busan. Despite enlisting boyband BTS and Gangnam Style performer Psy, as well as meeting nearly 100 world leaders to bolster support, Busan’s bid was trounced by Riyadh in a vote last week that shocked the country, with Saudi Arabia claiming 119 ballots to 29. (Rome fared even worse, with 17.)

Riyadh’s oil wealth may have helped, with plans to spend $7.8 billion on the expo as the country touts itself as a tourism destination. Images from the disastrous World Scout Jamboree held in South Korea this summer won’t have helped. Nonetheless, Mr. Yoon’s administration is now facing serious political blowback, with the already unpopular leader forced into a humiliating apology. “Everything was due to my own shortcomings,” he told reporters. “I am very sorry for having disappointed the citizens of Busan, as well as the rest of the nation.”

Further east, officials in Japan’s second city of Osaka are facing similar concerns. Advance tickets went on sale last week for the 2025 World Expo, which starts in less than 500 days. The 1970 event there is fondly remembered for drawing a near-record 64 million visitors, with Taro Okamoto’s unnerving Tower of the Sun statue remaining an instantly recognizable icon of glories past. The city is trying to recapture that magic with Myaku-Myaku, a multi-eyed Lovecraftian monster serving as the expo’s immediately recognizable mascot.

But all’s not well. Amid soaring construction costs, some countries have withdrawn their participation in Osaka. The projected budget has nearly doubled, and netizens and opposition politicians are calling for a cancellation. A poll last month found more than two-thirds of those surveyed agreed that expo isn’t needed; in another, some 69% polled said they don’t want to attend the event.

You wonder why some even bother trying. Politicians rarely get rewarded for hosting successful events but are left holding the bag for those that go badly. Former Japanese premier Yoshihide Suga navigated the coronavirus pandemic to successfully stage the Tokyo Olympic Games in 2021, and despite vocal opposition beforehand, polls afterward found 70% agreed they had been worth holding. That didn’t help Mr. Suga’s own ratings, though, with the leader resigning shortly after.

Big events are hard to pull off. But that doesn’t mean organizers are wrong to try. Osaka might not get the 64 million visitors of 1970, but it’s still expected to get 28 million in 2025. As my colleague Matthew Brooker has noted over the 2012 London Olympics, while it might not have been the most efficient use of money, it was the only one that was available.

Skepticism over the World Expo in particular goes back to the very first event, in 1851, which Ultra-Tory politician Colonel Charles Sibthorp denounced as “one of the greatest humbugs, frauds and absurdities ever known.” It was a success nonetheless, with the Crystal Palace that hosted the “Great Exhibition” becoming an iconic London destination for decades. Many expo locations have similarly avoided passing into parody like the Sunsphere, from the Eiffel Tower to Seattle’s Space Needle. In Japan’s case, the grounds of the 2005 Nagoya Expo have recently been reborn as Ghibli Park, while Yumeshima, the artificial island set to host the Osaka event, will become the site of the country’s first casino.

Just as the 2010 Shanghai Expo helped showcase China to the outside world, 2025 similarly comes at a good moment for Osaka. A run-down city center has been transformed over the past decade, aided by tourist dollars. This will be capped next year when a former cargo yard near the city’s main station, a massive stretch of prime real estate that has lain shamefully dormant for three decades, will finally reopen as a park and multiuse development.

Busan, which also frequently lives in the shadow of the larger capital of Seoul, could do with the same boost — and should return for a 2035 bid, as officials are hinting. Indeed, Asian nations should grab these events when they’re available, because increasingly they’re going to freer-spending Middle Eastern countries instead.   

Following Qatar’s success in 2022, the 2034 World Cup is almost certain to head to Saudi Arabia in a controversially uncontested bid. The country will also host the FIFA Club World Cup this year and the finals of the revamped Asia Champions League for up to five years. While competing with the oil wealth of these rivals is impossible, there are also other failures that have nothing to do with spending: In the case of the Winter Olympics, while it’s not Middle Eastern countries that are taking over, bad press from bid-rigging during the Tokyo Games tanked Sapporo’s bids, with the Hokkaido city likely to lose out not just on the 2030 Winter Olympics, but also 2034.

Public wariness is understandable. But we’ve seen time and again how pre-event doom over major events fails to materialize — from the supposed “Olympic variant” of Covid-19 that would spread from the Tokyo Games, to the feared “beer shortage” during the 2019 Rugby World Cup. Neither happened. Osaka should celebrate its hosting — and despite the current skepticism, the public should back it. Busan, too, should regroup for a 2035 bid. Neither nation might have the chance again soon. — Bloomberg Opinion

In a statement, the property development arm of the ICCP Group said it is developing new housing projects as it seeks to capitalize on the “ongoing resurgence” of the real estate market in several regions.

“As these regions undergo economic revitalization and grapple with the persistent housing backlog, Pueblo de Oro anticipates a surge in demand for both residential and commercial properties. The company’s foresight aligns with its dedication to meeting the evolving needs of the market,” the company said.

Earlier this year, Pueblo de Oro officials said it was planning to invest P13.5 billion in projects in Cagayan de Oro, including Masterson Mile Towers.

Masterson Mile Towers is a high-end, high-rise condominium project comprising five buildings. The company tapped Gensler and Associates from Singapore, and Casas+Architects for the project.

The company is also set break ground on the 31-hectare Southridge development, which is patterned after  Silicon Valley in California.

The company is also expanding in Batangas with the P1.8-billion Pueblo de Oro Courtyards Lipa and P1.7-billion Pueblo de Oro Westwoods Heights Batangas City. These projects will offer single detached and single attached houses for the middle-income market.

In Cebu province, Pueblo de Oro is earmarking P1.2 billion for PDO Townhomes Carcar. The economic housing community is scheduled to be launched in October 2024.

Pueblo de Oro is the residential development arm of the ICCP Group, which has business interests in financial services and property management.

Q3 TRANSACTIONS UP 15%
As of the first nine months of 2023, office space deals in Metro Manila reached 501,200 square meters (5.4 million square feet), up 2% year on year. We recorded 227,300 sq.m. (2.4 million sq.ft.) of office transactions from traditional occupants followed by outsourcing companies with 185,100 sq.m. (2.0 million sq.ft.) of closed deals.

In the third quarter of 2023 alone, we recorded 196,600 sq.m. (2.1 million sq.ft.) of office deals, up 15% quarter on quarter. Companies that employed flight-to-value strategies accounted for more than a third of closed deals during the quarter followed by expansion and new set-ups.

The Bay Area, Ortigas central business district (CBD) and Makati CBD dominated transactions in the nine-month period, accounting for 56% of total office deals in Metro Manila. Among the notable deals in the third quarter of 2023 include spaces occupied by Philippine Amusement and Gaming Corp. (PAGCOR) and TSA Group in the Bay Area, Bytedance in Fort Bonifacio, Greatwork in Ortigas CBD and Singa Ship Management in Makati CBD.

SUSTAINED PROVINCIAL DEALS
We continue to record office space deals outside of Metro Manila. In the third quarter of 2023, office transactions reached 66,200 sq.m. (712,300 sq.ft.), higher than the 56,100 sq.m. (603,600 sq.ft.) of deals posted in the second quarter of 2023. As of the first nine months of 2023, provincial deals reached 148,500 sq.m. (1.6 million sq.ft.), up 3%. Cebu accounted for nearly half of the total deals outside of the capital region followed by Pampanga (22%) and Laguna (8%).

Some of the notable transactions outside Metro Manila during the quarter include office space taken up by Foundever, Sansan Global Development and Kuehne & Nagel in Cebu, Ubiquity Global Services in Bacolod, and Afni Philippines in Laguna, the company’s first foray outside Metro Manila.

SUPPLY-DRIVEN VACANCY
The vacancy rate as of the third quarter of 2023 rose to 18.7%, up from 18.4% in second quarter of 2023 as we recorded the completion of 202,100 sq.m. (2.2 million sq.ft.) of new office space and new lease terminations from Philippine Offshore Gaming Operators (POGO).

By end-2023, we expect vacancy to rise to 21.2% as we still project the delivery of about 276,400 sq.m. (3.0 million sq.ft.) of new supply in the fourth quarter of 2023. In 2024, vacancy is still likely to remain elevated as we project new supply to continue outstripping demand.

Net take-up in the third quarter of 2023 reached 17,200 sq.m. (185,100 sq.ft.). Net absorption as of the first nine months of 2023 reached 154,000 sq.m. (1.7 million sq.ft.), up 50% from 102,500 sq.m. (1.1 million sq.ft.) a year ago. Colliers retains its projection of 220,000 sq.m. (2.4 million sq.ft.) net take-up in 2023.

RENTS TO DROP BY 2% IN 2023
In the third quarter of 2023, average office lease rates in Metro Manila dropped by 0.5% quarter on quarter.

While some business districts (i.e., Fort Bonifacio and Makati CBD) continue to see a recovery in rents, other submarkets with significant amount of available spaces such as the Bay Area and Alabang are likely to experience further decline in rents.

In 2023, we projected rents to drop by another 2%, after plunging by 37% from 2020 to 2022. Rental behavior is still dependent on a variety of factors including but not limited to building occupancy, landlord portfolio vacancy, size of the requirement, lease term etc.

Kevin Jara is associate director for office services – tenant representation at Colliers Philippines.

Rick Santos, chairman and chief executive officer of Santos Knight Frank, said investor confidence in the Philippines under the Marcos administration has lifted the real estate market despite high interest rates.

“The luxury residential space is one of several sectors where we’re seeing encouraging market activity. Pent-up demand for prime properties, the return of the residential leasing market, and the tight supply of developments have contributed to significant price appreciation especially in central business districts,” he said in a statement.

Knight Frank’s Prime Global Cities Index showed prime residential prices in Metro Manila surged by 21.2% year on year, and by 19% in the last six months.

This is faster than Dubai, where luxury residential prices increased by 15.9% in the 12-month period and 12.3% in the six-month period.

In Shanghai, prices jumped 10.4% in the 12-month period while prices went up by 6.5% in Mumbai and 5.5% in Madrid.

Prices have not been dampened by the Philippine central bank’s aggressive tightening campaign that brought interest rates to a 16-year high.

According to Santos Knight Frank data, the most expensive residential project in Metro Manila is Banyan Tree Residences by TransAsia at P800,000 per square meter (sq.m.). Balmori Suites by Rockwell Land is the second-most expensive at P600,000 per sq.m.

At the same time, Santos Knight Frank said local buyers are expected to continue looking for second homes, mostly in leisure properties in Metro Luzon.

As of the third quarter, 41% of condominium units sold in Luzon were leisure developments mostly in tourist destinations such as Tagaytay, and Batangas.

The remaining 59% were traditional condominium units in urban areas in Luzon.

NREA’s new national president Red J. Rosales will deliver speech outlining his plans and programs for 2024.

Aside from Mr. Rosales, the association’s officers-elect for 2024 include Imelda C. Magtoto, board chair; Ruth Marie Atienza, board vice chair; Ma. Lorena Sales, executive vice-president; Jovi Francis Tupaz, VP-internal; Ador Tolentino, VP-external; Zeny Fruto, VP-chapters; Loudette Carlos, secretary general; Nicole Choa, treasurer; Jeffrey Bongat, auditor; and Christian Mulingbayan, PRO.

Rafael M. Fajardo, board member of the Professional Regulatory Board for Real Estate Services, will be the special guest and resource speaker at the meeting.

The meeting will be held from 11 a.m. to 2 p.m. at the Makati Sports Club in Salcedo Village, Makati City.

The Cities Climate Finance Leadership Alliance said cities are on the frontline of climate hazards and responsible for three quarters of global emissions, but multilateral development banks (MDB) needed to adopt new strategies to address a gaping financing gap.

Cities were receiving only 1% of the climate finance they required, which is estimated to be as high as $5.4 trillion per year up to 2030, according to the study, the first ever review of urban finance from major multilateral development banks.

The proportion of MDB financing dedicated to urban-related climate projects stood at $62 billion from 2015 to 2022, or 21% of the total, despite rapid rates of urbanization across the globe, the study said after analyzing data from 815 urban climate-related projects financed by MDBs over the period.

Though they are among the most climate-vulnerable, cities in sub-Saharan Africa, the Middle East and North Africa received an especially low share of urban climate finance, with the study citing issues like creditworthiness and restricted access to capital markets.

It called on development banks to make more concessional funding available in order to de-risk investments. — Reuters

Colliers continues to record deals from traditional and outsourcing firms implementing a mix of flight to quality and flight to cost measures.

For the first nine months of the year, office transactions outside Metro Manila recorded flattish growth, with Cebu, Pampanga, and Laguna cornering bulk of closed transactions.

Moving forward, we see greater opportunities for expansion in key areas outside Metro Manila as occupants maximize the second and their tier cities’ skilled talent pool and improving infrastructure network.

Colliers encourages occupiers to continue complementing their workplace strategies with flexible workspace options. Landlords should remain flexible in offering commercial terms to capture demand from occupiers considering flight-to-value measures. Landlords should also align with occupiers’ environmental, social, and governance (ESG) and diversity, equity, and inclusion (DE&I) goals and continue implementing innovative programs to further support their tenants’ return-to-office (RTO) initiatives.

ALIGN WITH ESG AND DE&I GOALS
With the heightened importance on sustainability and inclusivity in the workplace, landlords must align with tenants on their ESG and DE&I goals.

Colliers encourages landlords to be more proactive in implementing and promoting ESG and DE&I elements within building amenities and common areas. This can be in the form of green features and certifications, landscaping, renovation of shared facilities and landlord-initiated events that support the wellness and productivity of employees.

TENANT ENGAGEMENT ACTIVITIES
As companies are now encouraging their employees to return-to-office, landlords have a role to play in rekindling the attractiveness of return-to-office, which can be done through tenant engagement events that promote the well-being of employees.

Landlords may take advantage of creating events around the coming holidays.

AMPLIFY FLIGHT-TO-VALUE STRATEGY
Based on Colliers’ third quarter 2023 data, several companies implemented flight to quality/cost strategies.

Among these are traditional and outsourcing firms that took up spaces in Fort Bonifacio, Makati central business district (CBD), and Ortigas CBD. These firms took advantage of a market that remains tenant-leaning and maximized the opportunity to lease new, high quality office spaces in major business districts at lower rents.

Colliers believes that given the prevailing market conditions, opportunities remain for tenants to implement flight-to-quality strategies at a lower cost due to decreased rents brought about by the pandemic.

In our view, now is an opportune time to secure space in locations with substantial supply of new and quality office spaces. Given the current stock of vacant spaces and new office towers to be completed in the next 12 months, we encourage tenants to consider office spaces in Fort Bonifacio and Ortigas CBD.

Occupiers may also consider flexible workspaces in either their flight-to-value strategy or rationalization of their current office real estate. Colliers encourages occupiers to review their real estate strategies ahead of lease expiry to take advantage of high vacancy in the market, especially with our still elevated forecast for 2023 and 2024.

(To be concluded next week)

Kevin Jara is associate director for office services – tenant representation at Colliers Philippines.

SUPPORTING the recycling value chain in the Philippines takes a whole village, given the lack of infrastructure for sustainable practices.

Collaborations are needed for the country to harness its potential for a circular economy of used beverage cartons (UBCs), Catherine Chua, sustainability manager at processing and packaging solutions firm Tetra Pak Philippines, said in an e-mail interview with BusinessWorld.

“To make this efficient, it is essential for all stakeholders to participate in the process,” she said.

“These stakeholders include consumers who separate materials at the source, individuals responsible for collection and sorting, and those who promote sustainability and recycling with their respective areas,” she added.

A report from the United Nations Environment Programme showed the recycling rates in the Philippines is only 20-33% for paper, 23-42% for plastic, and 30-70% for aluminum — all of which make up UBCs.

“Regional waste management schemes, such as intermunicipal cooperation and public-private partnerships, are amongst the effective measures,” the Economic Research Institute for ASEAN and East Asia said in an article last year on increasing recycling rates.

Tetra Pak has partnered with Del Monte Foundation for the Cartons for Communities program where private organizations, local government units (LGUs), schools, private communities, and junk shops can work together to foster environmental and community stewardship in the country.

The initiative covers the implementation of carton collection and recycling programs, development of recycling facilities and technologies, public awareness campaigns, and UBC donations, Ms. Chua noted.

Recycled UBCs are transformed into Poly AI boards and kraft paper products for household items like tables and chairs, she added.

“[It] seeks to raise awareness among Filipinos about the importance of carton recycling, expand collection infrastructure, reduce the environmental impact of carton waste, inspire businesses to adopt sustainable practices, and promote a circular economy for cartons in the Philippines,” Ms. Chua said.

The Cartons for Communities initiative employs a top-down engagement strategy to further its cause, she noted.

This involves working closely with the administrations of schools and private communities to provide information and education communication materials. Specialized collection bins are also placed in designated areas, with competitions and incentive programs running to encourage participation.

For LGUs, it conducts field visits and discusses feasibly integrating UBCs into its existing waste management system.

Junk shops are also incentivized, with a network being built to ensure UBC profitability and identify opportunities for greater operational efficiency.

To reduce the environmental footprint of its packages, Tetra Pak has used wood fibers, sugarcane, and recycled polymers.

“We are testing a fiber-based barrier as a replacement for the aluminum foil layer in our aseptic packages,” Ms. Chua said on the company’s food-safe packages.

“Initial test results indicate that packages with this type of barrier have the potential to significantly reduce carbon dioxide emissions compared to traditional aseptic cartons,” she added on pushing for carbon-neutral production and distribution.

Beyond environmental responsibility, Ms. Chua noted Tetra Pak also working toward economic feasibility through affordable packaging solutions for brand owners.

With the Canadian economy showing signs of a slowdown, money markets are pricing in the first interest rate cuts since March 2020 as soon as April, which would bring down mortgage costs.

Still, more home buyers took out fixed-rate mortgages in September compared with a year ago, eschewing variable rate mortgages where the interest rate varies based on current market rates. Fixed-rate loans also offer among the lowest rates available now.

The trend is being driven by homeowners preferring stability in monthly expenses rather than betting on lower rates ahead that might lower payments, after being stung by a prediction by the BoC in the early days of the COVID-19 pandemic that backfired on them.

“If you’ve got a mortgage or if you’re considering making a major purchase… you can be confident rates will be low for a long time,” BoC Governor Tiff Macklem said in July 2020 after slashing interest rates to a record low, helping prompt a housing boom that led to Canadians racking up mortgage debt over the subsequent two years.

Since then, the central bank has raised the key interest rate to a 22-year high of 5% in July. Now with more than C$900 billion ($656.07 billion), or 60%, of residential mortgages at Canada’s big banks likely to be renewed in the next three years, homeowners are having to choose between fixed or variable rate loans.

“It is tricky,” said Sophie Tremblay, an aviation professional from Montreal. “You don’t know what is the best decision to make and right now the banks are fully pushing us to go into a fixed and lock that instead.”

She said she is already thinking about her mortgage renewal even though it is three years away, given her current payments barely cover interest on her five-year variable mortgage.

Roughly half of new mortgages in early 2022 were variable-rate ones, but that number dropped to just 6% in August 2023, according to Canada’s housing agency. The share of fixed rate loans among five-year and three-year mortgages rose to 68% in August compared with 32% a year ago.

In the first three weeks of November, 79% of mortgage seekers in Canada opted for a fixed mortgage, said Hanif Bayat, CEO of financial data firm Wowa Leads.

Borrowers have turned cautious after recent rate predictions turned out wrong, but loans based on variable rates may still be popular in the next couple of years as markets gear up for rate cuts in the next two years, he said.

NEW ERA
National Bank analysts wrote in a research note this month that acceptance of rates staying ‘higher-for-longer’ might lead some to lock in rates and avoid as much uncertainty as possible.

“BoC officials are helping to ingrain this, telling Canadians to brace for an era of higher borrowing costs,” the note added.

More recently, BoC Deputy Governor Carolyn Rogers this month said Canadians should plan for higher rates, warning rates might not return to low levels seen in the pre-pandemic era as geopolitical risks such as the conflict in the Middle East have added more uncertainty to the global economy.

Asked about families making decisions based on Mr. Macklem’s 2020 comments that rates would stay low for a long time, the BoC pointed to Ms. Rogers’ comments in November that decisions at the time were made to “support an economy that had effectively been shut down” and that “two years was a long time for interest rates to be at the level they were.” — Reuters

HOTEL: PRIMING THE PHILIPPINES AS A REGIONAL MICE HUB
The reinvigorated hotel sector remains as one of the most vibrant property segments in the country. Foreign arrivals are likely to breach the Tourism department’s target for 2023 while the domestic market continues to lift occupancies and daily rates. The return of business travelers and in-person corporate events have also been propping up the demand for meetings, incentives, conferences & exhibitions (MICE) facilities.

Colliers believes that the bolstered leisure sector will continue to expand given the record-high supply of new keys in 2023. Stakeholders should seize opportunities by building more MICE facilities to maximize the return of in-person events; developing more homegrown hotel brands or acquiring foreign ones; and aligning programs and offerings with the Tourism department’s refreshed strategy.

By the end of 2023, Colliers projects average occupancy in the capital region to reach 65% partly driven by holiday spending as well as year-end MICE activities. Metro Manila occupancy is now near pre-COVID level. In 2019, average occupancy peaked at 70%, before plummeting to 20% in 2020 due to COVID disruptions arising from mobility restrictions.

In our view, the leisure sector is one property segment likely to benefit from the government’s push to improve transport infrastructure. The expansion and modernization of international and regional airports should support developers with a hotel footprint across the country.

INDUSTRIAL: MANUFACTURING LOCATORS TO BENEFIT the INDUSTRIAL SECTOR
The Philippines recorded record-high investment pledges in the first half of 2023. This is a positive for the Philippine industrial sector as these projects are likely to take up industrial space and warehouses in the next 12 to 24 months. Industrial parks in central and southern Luzon continue to entice investors and the continued expansion of developers’ industrial footprint should further boost the Philippines’ competitiveness as a manufacturing hub in Asia.

Colliers is cognizant of the government’s efforts to entice more investors. In our view, there should be a strong public-private partnership in attracting more foreign investments. Developers should assess the requirements of potential industrial locators and remain aggressive in offering concessions to raise industrial space absorption within their facilities. Industrial parks should also feature township components, including residential and commercial developments.

In our view, masterplanned communities that offer industrial spaces and warehouses will remain attractive given the pavement of roads, cheaper utility costs, as well as customization of warehouses and related facilities.

Meanwhile, we see Central Luzon rising as a viable alternative industrial location. Among the firms that recently announced plans to expand in the region include Shera Building Solutions in Teco Industrial Park in Pampanga, Envirotech in Clark Freeport Zone and StBattalion in New Clark City in Capas, Tarlac.

In our view, the modernization of Clark International Airport and the completion of the proposed Subic-Clark Cargo Railway will likely support the expansion of industrial activities in Central Luzon. Definitely for industrial activities there is nowhere to go but up — north!

Colliers believes that the expansion of industrial spaces in central and southern Luzon is a plus, especially for manufacturers that are planning to open facilities in the Philippines. This is particularly important for the foreign manufacturers that the Marcos administration is luring to establish plants in the country.

OFFICE: FLIGHT-TO-QUALITY AND SUSTAINABILITY DOMINATES OCCUPANTS’ LEASING STRATEGY
Metro Manila recorded a marginal rise in office vacancy due to the completion of new office buildings and spike in vacated spaces in the third quarter of 2023. Colliers continues to record deals from traditional and outsourcing firms, implementing a mix of flight-to-quality and flight-to-cost measures.

For the first nine months of the year, office transactions outside Metro Manila recorded flattish growth, with Cebu, Pampanga, and Laguna cornering the bulk of closed transactions. Going forward, we see greater opportunities for expansion in key areas outside Metro Manila as occupants maximize the second and third tier cities’ skilled talent pool and improving infrastructure network.

Colliers encourages occupiers to continue complementing their workplace strategies with flexible workspace options. Landlords should remain active in offering high quality buildings at a discount to enable tenants to implement flight-to-quality measures. Landlords should also continue implementing innovative programs to further support their tenants’ return-to-office (RTO) initiatives.

Based on Colliers’ third quarter 2023 data, several companies implemented flight to quality/cost strategies. Among these are traditional and outsourcing firms that took up spaces in Fort Bonifacio, Makati central business district (CBD), and Ortigas CBD. These firms took advantage of a market that remains tenant-leaning and maximized the opportunity to lease new, high quality office spaces in major business districts at lower rents.

Colliers believes that given the prevailing market conditions, opportunities remain for tenants to implement flight-to-quality strategies at a lower cost due to decreased rents brought about by the pandemic. In our view, now is an opportune time to secure space in locations with substantial supply of new and quality office spaces. Given the current stock of vacant spaces and new office towers to be completed in the next 12 months, we encourage tenants to consider office spaces in Fort Bonifacio and Ortigas CBD. Occupiers may also consider flexible workspaces in their flight-to-value strategy. Colliers encourages occupiers to review their real estate strategies ahead of lease expiry to take advantage of high vacancy in the market, especially with our still elevated forecast for 2023 and 2024.

In our view, sustainable and green buildings will remain attractive especially among major multinational and outsourcing firms. These office towers will account for an estimated 56% of new office buildings from 2023 to 2025, further expanding the options of tenants across Metro Manila.

Joey Roi Bondoc is the research director for Colliers Philippines.

CITADINES ROCES Quezon City by The Ascott Limited is aiming to be fully operational by the middle of January next year.

“We are looking at mid-January next year (for full operations),” Citadines Roces Quezon City Assistant Residence Manager Thea Karissa Peregrino said during an interview last week.

The serviced residence, located along Don A. Roces Avenue in Quezon City, was initially set to open in December.

“But by the middle of December, many clients will already be lost since they always book in advance. We don’t want the customer experience to suffer,” she said.

Ms. Peregrino said she expects Citadines Roces to have a 60% occupancy rate during the first three months of its operation. 

“It is conservative. We don’t want to oversell,” she said.

Citadines Roces is the brand’s first property in Quezon City, but the seventh Citadines in the Philippines. The property offers 200 suites ranging from studio, one-bedroom, and two-bedroom apartments.

“Before, the trend was really more on the long-staying guests. But now, it is getting 60:40 or 50:50 split with staycation and weekenders,” Ms. Peregrino said.

Citadines Roces has function rooms that could accommodate up to 200 guests. Other amenities include an all-day dining restaurant, function spaces for meetings and events, a swimming pool, a fully equipped fitness center, and a resident’s lounge. The parking area can accommodate 114 vehicles.

The property is aimed at business and leisure travelers searching for a comfortable and convenient getaway experience within Metro Manila.

“We have 26 floors. Guest rooms are from the 10^th until the 25^th floor. The function room is on the ninth, and the amenities and the reception on the eighth floor. Then we also have a restaurant on the ground floor,” Ms. Peregrino said.

She said the property is already seeing demand from offices of media companies and government agencies in the area.

“We saw a potential because of the media outfits (located here). We don’t have that in Makati. Also, the government offices nearby and multinational companies. There are also many customers from Japan and Korea who are possibly looking for an alternative accommodation within Quezon City,” Ms. Peregrino said.

The service residence is also targeting staycationers and long-stay guests.

“In a hotel, you don’t have the cooking aspect. You don’t have the kitchen hubs. You don’t have the washer and dryer. Here in our service apartment, you have all that in the convenience of your room,” she added.

The Citadines brand is under The Ascott Limited, which is the lodging business unit of Singapore-based real estate developer CapitaLand Limited.

teamLab, an international collective of artists, set a Guinness World Record by attracting more than 2 million visitors in 2019 to their Borderless museum on the Odaiba island in Tokyo Bay. The name refers to digital art pieces that blend into each other and encourage guests to wander at their own pace.

The attraction closed last year ahead of redevelopment of the site by Mori Building, one of Japan’s leading developers. It is due to reopen in February in Mori’s new Azabudai Hills complex in central Tokyo.

“To be able to create this kind of large space in which we can exhibit is what’s really important to us,” teamLab founder Toshiyuki Inoko said in an interview on Friday.

The relocation is part of Mori’s strategy of placing cultural attractions in integrated business and residential projects. The 330 meters (1,082 feet) Mori JP Tower is due to open next week, with adjacent shopping arcades, residential towers, medical facilities, and a school in various states of construction.

Several pieces of the new Borderless facility are nearing completion, including “Flowers and People,” a continuous computer projection of blooming and scattering petals, and “Bubble Universe,” a mirrored room of twinkling bulbs that appear to extend into infinity.

teamLab has developed a global reputation for its experimental and interactive set pieces that meld images and senses. Previous projects in Tokyo featured digital art mixed with a sauna experience and a laser light show enhanced performance of Giacomo Puccini’s opera “Turandot.”

“We as team want to create something that makes people feel that the continuity itself is something beautiful,” Mr. Inoko said. — Reuters

Quezon City Mayor Joy G. Belmonte and Robinsons Land Corp. Executive Vice-President and Business Unit General Manager Faraday D. Go led the lighting of the mall’s 40-foot-tall golden Christmas tree.

The life-size Belen, which depicts the nativity of Jesus Christ with Mary, Joseph, and the three kings, is located along Gen. MacArthur Avenue. This is a holiday tradition observed by Araneta City since 1991.

With the theme “City of Firsts, Your Home This Christmas,” Araneta City will hold many Christmas events and activities, including a Parolan bazaar and a grand fireworks display on Fridays to Sundays at 7 p.m. Santa Claus and friends will also have a meet-and-greet and parade at Araneta City malls every weekend.

The government also plans to review unemployment benefits for seniors, they said.

Budget Minister Thomas Cazenave told La Tribune that the government wants to reduce the amount of office space occupied by the administration by 25%.

“There is real leverage for savings there, in particular given the new ways of working,” he said, referring to the increase in home working following the COVID-19 pandemic.

He said the ratio of office space area per civil servant is 24 square metres (258 square feet), far above private industry standards, and the government wants to reduce that to 16 square metres.

“We may also consider real estate sales,” he added.

Asked about whether the government could achieve its target of reducing the unemployment rate from 7% to 5% by 2027, Finance Minister Bruno Le Maire said this would require reviewing social policies, notably unemployment benefits.

“We have worked hard to move from 9% to 7%, but to move to 5%, courageous choices need to be made… All the schemes that feed seniors’ unemployment must be reviewed,” Le Maire said.

Cazenave also confirmed that the government will seek an additional 12 billion euros of spending cuts for the 2025 budget, as discussed with Prime Minister Elisabeth Borne on Thursday.

“We confirm spending cut targets of 16 billion euros ($17.5 billion) for the 2024 budget, and we are already preparing 12 billion of savings for the 2025 budget,” he said, adding that the government was still aiming to reduce its deficits to 4.4% of GDP in 2024 and 3.7% in 2025. — Reuters

The Philippine central bank on Oct. 27 raised the basic policy rate to 6.5% from 6.25%. This is likely to raise mortgage rates imposed by banks and affect the overall appetite for residential units.

Asset classes that generate recurring income, including retail and hotels, are benefiting from a personal consumption-backed economic rebound. Developers should now take a closer look at various property segments and identify which sectors to focus on. Specific property subsectors continue to outperform other subsegments.

Colliers believes that economic growth for the remainder of the year will likely be led by personal consumption, and this should further prop up retail and hotel segments. Greater office space take-up will partly hinge on business expansions within and outside Metro Manila, while residential demand will partly depend on remittances sent home by Filipinos working abroad as well as investors’ overall appetite for the upscale and luxury residential developments.

There are several opportunities in the market despite some persistent headwinds. Colliers is still optimistic that property stakeholders will be able to enjoy a strong finish towards the end of 2023 as opportunities still remain for selected property segments.

Developers should be able to plan ahead to take advantage of the Philippine property sector’s growth for the long term. Property firms should be mindful of new economic policies and programs likely to be implemented by the government starting 2024 and closely observe how these will redefine the regulatory environment for Philippine property stakeholders.

RESIDENTIAL: DEVELOPERS BANK ON DEMAND FOR RESORT-ORIENTED PROPERTIES
Condominium leasing continues to recover across Metro Manila, especially with the return of more expatriates. Local employees gradually returning to on-site work also contribute to improved leasing especially in major business districts including Makati central business district, Ortigas Center, and Fort Bonifacio. Pre-selling demand has been recovering year on year, driven by the mid-income segment, but developers remain cautious of new launches especially given the substantial ready-for-occupancy (RFO) units and the elevated vacancies in the secondary market.

Colliers retains its earlier forecast that rents and prices will continue to improve for the remainder of 2023 but the substantial completion of new condominium units in 2024 is likely to exert a downward pressure on rents and prices next year.

Colliers has been seeing the expansion of resort or leisure-themed projects outside Metro Manila, and we project the launch of similar projects as property firms cater to a rising demand from a discerning and affluent market. Colliers believes that to stoke the market, attractive and flexible payment terms and promos should continue to be offered by developers. Green and sustainable features should also be integrated and highlighted as demand for these features rose at the height of the pandemic. This is also an opportune time for unit owners to upgrade and renovate to capture demand from returning expatriates.

RETAIL: SUSTAINING FOOTFALL AS IMPACT OF REVENGE SPENDING DISSIPATES
The impact of revenge spending across the country is starting to dissipate so the challenge for mall operators and retailers now is to sustain footfall and consumer spending. Colliers sees holiday-induced spending partly offsetting this projected slowdown. We are optimistic of sustained interest from retailers, especially those interested in occupying brick-and-mortar mall space in prime locations across major business districts in Metro Manila. We are projecting a slight increase in vacancy starting 2024 due to substantial delivery of new mall space.

Colliers believes that mall operators and retailers should cash in on holiday spending across the country. Holiday marketing initiatives should be amplified while mall operators should use the festive season as an opportunity to reactivate activity centers and curate events to attract more mallgoers and entice shoppers to spend more. Developers with upcoming malls should carefully assess the retail mix that they will offer to consumers. While operators and retailers continue to welcome more customers in-store, both should work together in improving the omnichannel shopping experience of Filipino consumers.

(To be concluded next week)

Joey Roi Bondoc is the research director for Colliers Philippines.

“Our focus on environmentally responsible practices drives us to adopt renewable energy sources, on top of efforts to decrease our overall energy consumption. By installing solar panels in our commissaries, logistics centers down to our stores, we are able to harness energy that is friendlier to the planet so that future generations may continue to enjoy it,” Ernesto Tanmantiong, Jollibee Group president and chief executive officer, said in a statement.

Since 2014, the Jollibee Group has been expanding its use of solar power. As of end-2022, the company has equipped 28 stores with solar panels, including 19 Jollibee, seven Chowking, and two Mang Inasal branches.

The company said solar panel integration also improves cost-efficiency of business operations by delivering 5-35% of the store’s energy needs.

This year, Jollibee said 16 stores will integrate solar panels in their operations. Next year, the company plans to add another 20 stores, bringing the total to 64.

Jollibee is also installing solar panels in two of its state-of-the-art commissaries in Canlubang, Laguna, with expected completion by Dec. 30, 2023. Installation of solar panels at Jollibee Worldwide Services Logistics Center is on track to be completed by the second quarter of 2024.

“The implementation of solar panel systems across two manufacturing sites and a logistics center presents an exciting opportunity to harness clean energy. This initiative will effectively transform approximately 18% of the total energy consumption at these three facilities into renewable energy sources,” Jollibee Group Chief Sustainability and Public Affairs Officer Jose Miñana, Jr. said.