Market for High End Residential Condos in M-Mla

Market Study Findings Preliminary Report for Design Purposes : 

Market Study Findings Preliminary Report for Design Purposes Proposed High Rise Residential Condominium Project Cuevas Group of Companies 1

MACRO DRIVERS OF THE REAL PROPERTY MARKET: 

MACRO DRIVERS OF THE REAL PROPERTY MARKET Demand Demand as proxied by the value of real estate transactions net of inflation is determined by: The state of the economy as measured by the Gross Domestic Product (GDP) Price of Real Estate Bank lending rate Supply Supply as proxied by the value of new construction net of inflation The state of the economy as measured by the Gross Domestic Product (GDP) Price of Real Estate 2

WHAT DRIVES RESIDENTIAL BUYER CHOICES: 

WHAT DRIVES RESIDENTIAL BUYER CHOICES Philippine residential properties have seen tremendous improvements in design and quality . Residential buyers are seen to be more discerning of these residential properties due to their exposure to the superior standards and architecture in the countries they have been to. Prospective buyers of Philippine residential properties go to developers that: have a good track record; locate projects in places that are accessible to transport lines as well as to urban amenities; build classy units whatever the market level – value for money; and deliver their products on time. As such, residential condominium buildings and units have taken on a compendium of aesthetically-pleasing forms that approximate those that are found in First World countries but at the same time incorporating uniquely Filipino flavors . 3

SIMULATION MODEL: 

SIMULATION MODEL A statistical model was estimated from 1998 to 2011 data. The model tracked the performance of the real property market with only less than 1% error on the demand side and a 6.3% error on the supply side. 4

EXISTING CONDITIONS IN THE HIGH-END RESIDENTIAL CONDOMINIUM MARKET: 

EXISTING CONDITIONS IN THE HIGH-END RESIDENTIAL CONDOMINIUM MARKET Demand Larger inventories in the Makati CBD has caused vacancy rates to go as high as 9% as of the 1 st Quarter 2011 and is expected to rise to 11% by the end of 2011. However, in the Eastwood sub-market in the QC area, it has remained stable at 3% considering the limited supply in the QC area. Take-up is high in the premium grade units. Supply As of end of 2010, the supply of high-end residential condominiums in Metro Manila is estimated at 39,383 units of which 88.1% are in the Makati- Taguig area and only 11.9% in the Quezon City area, mostly in the Eastwood area. 70% of the units are studio and 1 bedroom units. 5

FORECAST CONDITIONS IN THE HIGH-END RESIDENTIAL CONDOMINIUM MARKET: 

FORECAST CONDITIONS IN THE HIGH-END RESIDENTIAL CONDOMINIUM MARKET Vacancy rate will be below the 10% norm for a stable market over the next 5 years. Only 7% of the new supply is expected to be in the QC area so that vacancy in the area is expected to be stable at 3 to 4%. A 6.32% annual average increase in real estate prices in real terms (10.17% in nominal terms) is expected between 2011 and 2015. 6

Is the timing right for the proposed project?: 

Is the timing right for the proposed project? 7

Is the timing right for the proposed project?: 

Is the timing right for the proposed project? A more sophisticated spectral analysis of the same set of data strongly indicate a 7- year cycle in the new residential construction. 8

PRICING & SIZING OF COMPETITORS: 

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PRICING & SIZING OF COMPETITORS: 

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PRICING & SIZING OF COMPETITORS : 

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PRICING & SIZING OF COMPETITORS : 

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PRICING & SIZING OF COMPETITORS: 

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PRICING & SIZING OF COMPETITORS: 

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TARGET SELLING PRICE RANGE/UNIT: 

TARGET SELLING PRICE RANGE/UNIT Half of the units be in the PhP 2.5 to less than PhP 3.3 mi llion range in the 23 to 30 sq. m. size range. The other half be in the greater than PhP 3.3 to PhP 4.5 million range in the greater than 30 to 41 sq. m. in size range. 15

AMENITIES OF COMPETITORS: 

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AMENITIES OF COMPETITORS: 

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AMENITIES OF COMPETITORS: 

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AMENITIES OF COMPETITORS: 

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AMENITIES OF COMPETITORS: 

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AMENITIES OF COMPETITORS: 

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