Friday, June 29, 2012

Int’l pressure mounts for more ‘green’ buildings in PH

INQUIRER - The construction and real estate industries have been called to shape up for the environment. While industrialization has long cast a gray pall over the planet, wealthy nations have also long been made aware of the consequences and have been implementing “green” building initiatives with international green rating systems.

The Asia-Pacific region is catching up in terms of these initiatives. The scale, pace and general trend of recent construction efforts have been geared toward efficient commercial real estate that complies with green building codes.

CBRE Philippines cited that an increasing number of building owners are retrofitting and upgrading existing buildings to improve their energy efficiency and environmental performance, among other things.
Now, there’s mounting pressure from the international business community, especially from foreign investors, on local locators to offer more green buildings in the country.

Joannie Mitchell, director for CBRE Philippines’ global corporate services, announced to the press during the June 20 mid-year report that international companies trying to invest in the country are looking for more environmentally sustainable structures to hold offices in.

Amid the presence of five LEED (Leadership in Energy and Environment Design)-certified buildings in the Philippines and 58 more projects currently registered for LEED certification, more building tenants have been encouraging their landlords to retrofit their buildings to be environmentally sustainable. Some multinational tenants have required landlords to retrofit their buildings for the latter to be able to secure the contract to lease.

Increased demand
Mitchell added that there has been a business demand for more green buildings, and from the viewpoint of corporate social responsibility, a moral imperative to build environmentally sustainable structures.
CBRE Philippines maintained that the surge in the number of green buildings would support the robust growth of the country’s property sector market.

“Fortune 500 companies, multinational corporations, and even local firms now consider green initiatives as prerequisites in their day-to-day maintenance and operations,” said Rick Santos, CBRE Philippines chair and CEO. “Through our global networks and resources, we have been strengthening the drive toward sustainable development which, as pointed out in several studies, could also benefit not only developers and the environment but also end-users—tenants, employees and residents—in the long run.”

A local rating, a counterpart of the LEED certification, has already been established by the Philippine Green Building Council. Called Berde, the certification means Building for Ecologically Responsive Design Excellence.

Another local rating has been formulated by the Philippine Green Building Initiative. This ratings body is composed of professional organizations such as United Architects of the Philippines, Institute of Integrated Electrical Engineers of the Philippines, Philippine Institute of Interior Designers, Geological Society of the Philippines, Heritage Conservation Society, International Council of Monuments & Sites, the Philippine Society of Ventilating Air-conditioning & Refrigerating Engineers.

Rating system
LEED, meanwhile, is a widely used international green rating system developed by the US Green Building Council.

The five LEED certified buildings are the Asian Development Bank, Nuvali One Evotech, Shell Shared Services Office, and Texas Instruments in Baguio and Clark.

Among the 58 projects currently registered for LEED certification are The Zuellig Building in Makati; BTTC Centre in Greenhills (both precertified Gold under the Core & Shell Program); Megaworld 8 Campus Building in Bonifacio Global City (which is pursuing Silver Certification under the Core & Shell Program); and Wells Fargo Headquarters in Bonifacio Global City, which is seeking Gold Certification under the Commercial Interiors Program.

Country           Registered
India                  1,283*
China                 589
South Korea     126
Hong Kong      55
Taiwan             45
Malaysia          42
Singapore        42
Philippines     38
Japan              36
Thailand         31
Sri Lanka       23
Vietnam         18
Bangladesh   16
Pakistan        9
Indonesia     7
Nepal            6
Cambodia    2
Macau          2
Bhutan        1
Total       2,371

CBRE Global Sustainability Team chart showing LEED-certified projects in various countries. To date, the Philippines has 5 LEED certified projects and 58 under registration. The figures only cover projects under the LEED rating system.


For latest update on real estate development and its RA 9646, the Real Estate Service Act of 2009, visit www.ra9646.com.

Philippine developers are out of sync with foreign retiree market

PRSEA - Philippine property developers must carry out more research in the retiree sector if they want to attract the foreign retiree market, according to the country’s retirement and healthcare sector.

The European Chamber of Commerce of the Philippines ECCP led Retirement and Healthcare Coalition (RHC) highlighted that property developers in the country must do more homework on their products and marketing if they want to appeal to foreign retirees.

Foreign retirees benefit from facilites such as on-site hotels, restaurants, entertainment, and medical centres.

“Sleeping villages”, whereby leisure, entertainment, health, and wellness services are absent are only scarcely available to this particular market, stated RHC executive director Marc Daubenbuechel.

A senior citizen’s residence needs to have special facilities catering to the needs and wants of those who live there, including amenities like a clubhouse, restaurant, grocery stores, swimming pools, activity centres, sports facilities, and on-site medical aid, said Daubenbuechel.

He advised that developers must re-modify their marketing strategy and cater for the needs of this particular market rather than looking for a quick fix sale. In achieving this, he advises that sincere connections or partnerships with tourism or retirement agencies are vital.

In global comparison of retirement projects, Daubenbuechel summarised: “Here in the Philippines, it is mostly focused on the real estate. They are not using tourism marketing tools and the only option in nearly all their projects is buying a property.”

“Foreign retirees that leave their home country do not want to live in an empty village. For them it is very important to be embraced by the new community. Those interested in moving to a senior citizen residence are usually very particular about the community they will be living in,” said Daubenbuechel.

According to the RHC executive director, a successful retirement village will offer and upkeep attractive and specific surroundings for residents who have particular expectations of their new foreign home.

In making the transition more appealing, Daubenbuechel cited a separate hotel or condotel within or nearby a village would offer visitor accommodation or provide an accommodating option for potential residents to use whilst they trial their possible future surroundings.

Long-term leases attract the retirement section which does not wish to make initial concrete residential decisions and would therefore more readily subscribe to a long-term lease.

“For foreign retirees, buying a property means they will be permanently tied to a new country they are not yet very familiar with. Giving them the option to have a long-term lease gives them the feeling of owning a property but at the same time retaining for them the option of moving back to their home country, if necessary,” concluded Daubenbuechel.


For latest update on real estate development and its RA 9646, the Real Estate Service Act of 2009, visit www.ra9646.com.

Increasing transparency across global real estate markets

PRSEA - Increased transparency in global real estates markets aids investors and occupiers, according to a report by Jones Lang LaSalle.

According to the 2012 Global Real Estate Transparency Index report, a staggering 90 per cent of markets have registered advances in real estate transparency, over the last two years.

Improved market data and performance measurement, as well as better governance of listed vehicles have driven advancements within the market.

Singapore and Hong Kong topped the global transparency tables.

The 2012 Global Real Estate Transparency Index calculated transparency in 97 real estate markets by analysing a total of 83 differing factors.

The report found that the US ranks as the world’s most transparent real estate market in 2012, followed closely by the UK and Australia.

Existing countries considered ‘Highly Transparent’ are the Netherlands, New Zealand, Canada, France, Finland, Sweden, and Switzerland.

Ranking under the ‘Transparent’ bracket were Hong Kong, Germany, Singapore, Denmark, and Ireland.
The ‘Semi-Transparent’ band consisted of the Philippines, Thailand, and Indonesia.

The Jones Lang LaSalle survey provides investors and corporate occupiers with data and analysis fundamental to transacting, owning, and operating in global markets.

The Index reiterated the ascent of the MIST (Mexico, Indonesia, South Korea, and Turkey) growth markets; all are amongst the leading improvers. Turkey consistently leads with the most improved transparency rate.

“While the world economy is still in recovery, the 2012 Index reveals that real estate investors and corporate occupiers are widening their activity across a broader range of markets. This cross-border activity encourages faster rates of transparency improvement in growth and emerging economies as the market opens up further to international competition and their real estate sectors embrace global best practices,” said Jacques Gordon, global head of strategy for LaSalle Investment Management.

Managing director of Singapore and Southeast Asia, Jones Lang LaSalle Chris Fossick, said: “The real estate markets in Southeast Asia have made significant inroads in improving their transparency over the past two years. Three out of the top ten improvers globally are from the region – The Philippines, Indonesia, and Vietnam.

“All three countries have improved on the back of greater availability of market data and changes in the regulatory and transaction processes. With the exception of Vietnam, most Southeast Asia markets are either in the transparent (Singapore and Malaysia) or semi-transparent band.

“This finding is echoed by the recent rise in direct foreign investments (FDI) into the ASEAN especially into Indonesia and the Philippines. The rise of FDI into ASEAN is testament of global investors’ confidence of the long-term growth potential in this region.”

He confirmed that whilst there are no Asian cities in the top ten highly transparent global markets, Hong Kong ranks the highest in Asia at 11. Singapore is closely behind, ranking at number 13.

“Both Singapore and Hong Kong have shown improvements in their overall global ranking with Hong Kong marginally ahead of Singapore as a result of more detailed market fundamental data,” said Mr Fossick.
The 2012 Index showed continued transparency deficiencies in many African, Middle Eastern and Latin American markets.

Ranking lowest, under the ‘opaque’ market were: Venezuela, Mongolia, Tunisia, Ghana, Iraq, Pakistan, Algeria, Belarus, Angola, Nigeria, and Sudan.

National director of Global Research at Jones Lang LaSalle, Jeremy Kelly said: “While steady progress in real estate transparency has been made during the past two years, much still needs to be done. The pace of regulatory and legal reform has been slow, and we have seen limited improvement on the transparency of transition processes, despite recognition by government and industry bodies that transparent real estate markets are necessary.”

Looking ahead, Kelly speculated on the presiding issues likely to lead to further transparency results in the next update of 2014. He cited that a growing recognition in many emerging economies that the current lack of performance indicators and accurate market information is hindering inward investment and crippling the development of competitive domestic real estate sectors.

Property sustainability characteristics will affect lease and investment decisions; growing from a marginal criterion to a critical decision-making input. This will result in greater transparency of energy efficiency and Green Building benchmarking.

The ongoing financial crisis, particularly in Europe, will motivate regulators, central banks, foreign investors, and other real estate professionals towards better transparency, in the process offering more public data on real estate debt and monitoring lenders more closely.


For latest update on real estate development and its RA 9646, the Real Estate Service Act of 2009, visit www.ra9646.com.

Philippine property gates open to a wider market

PRSEA - Widening the property pathways to a broader market has returned continuous growth in the Filipino residential sector, reported CBRE Philippines.

An energy efficient building offers economic attractions.


CBRE chairman and CEO Rick Santos said there is a major transformation underway across the Filipino housing sector. “The Philippines is experiencing democratisation in the housing sector – from a nation of renters to owners – based on low interest rates and financing schemes,” said Santos.

Bank-lending rates continue on a downward trend, according to Santos. Increasing affordability of funds for housing acquisitions supports the strong demand in the residential sector.

He said: “The liquidity in the market enables developers to provide more affordable payment terms to buyers. The low cost of borrowing is likewise spurring development expansions in the residential/housing industry.”

A single-digit mortgage rate has enabled Filipinos to purchases property as opposed to the only option of renting property. Santos confirmed that monthly rents for an average household in Metro Manila now stand in line with house and lot or residential condominium products now available to a broader market base.

The modern Filipino household is becoming condominium residents, Santos offers, this correlates with the pace of urban living.

“As a result, demand for affordable condominium units continues to grow year-on-year,” Santos said.

The property management firm also highlighted the development of green buildings in supporting the growth of the country’s property market, reported Business Mirror.

“Fortune 500 companies, multinational corporations, and even domestic firms now consider green initiatives as prerequisites in their day-to-day maintenance and operations.

“Through our global networks and resources, we have been strengthening the drive towards sustainable development which, as pointed out in several studies, could also benefit not only developers and the environment but also end-users – tenants, employees, and residents – in the long,” pointed out Santos.

To date, there are five Philippine buildings that have been awarded Leadership in Energy and Environmental Design (LEED) status. Presently there are however, 58 projects currently registered for LEED certification.

The sustainability agenda will continue to grow in importance in the real estate sector, according to Santos.

“As the outsourcing and off-shoring sector gains strength in the country, we see more occupiers and developers prioritising flight to quality, with green buildings becoming more the norm than the expectation,” said Santos.

Developed by the US Green Building Council, LEED covers several areas: new construction, core and shell, existing buildings, commercial interiors, homes, and neighbourhood developments.

CBRE Philippines director global services Joanie Mitchell said the scale, pace, and general trend of recent construction in the Asia-Pacific region has been aimed at efficient commercial real estate in compliance with green building codes.

Mitchell said: “While development of green spaces may entail additional costs at the onset, this investment in green building is recoverable and is expected in the long run through decreased operating costs, increased return on investment through higher tenant/customer retention and renewal, rental premium, and increased building/asset value.”

In a 2011 update by CBRE on Current Trends in Green Real Estate, it was noted that from an occupiers’ perspective today, occupying green buildings is an important step towards achieving corporate sustainability objectives.


For latest update on real estate development and its RA 9646, the Real Estate Service Act of 2009, visit www.ra9646.com.

Transparency in global real estate markets increases

PROPERTY MAGAZINE - A biennial index released today by Jones Lang LaSalle and LaSalle Investment Management reveals that recovering real estate markets have prompted renewed impetus to transparency improvements following a slowdown in progress during the financial crisis in 2008 and 2009. Nearly 90 percent of markets have registered advances in real estate transparency during the past two years, driven by improving market fundamentals data and performance measurement, combined with better governance of listed vehicles.

The 2012 Global Real Estate Transparency Index, a proprietary Jones Lang LaSalle survey that calculates transparency in 97 real estate markets worldwide by weighting 83 different factors, provides investors and corporate occupiers with data and analysis critical to transacting, owning and operating in global markets. The Index also assists governments and other industry organizations interested in improving transparency.

Among key findings from the report:
• The United States ranks as the world’s most transparent real estate market in 2012, followed closely by the United Kingdom and Australia. Also in the ‘Highly Transparent’ category: Netherlands, New Zealand, Canada, France, Finland, Sweden and Switzerland.

• The Index reaffirms the ascent of the MIST growth markets (Mexico, Indonesia, South Korea and Turkey), which all feature among the leading improvers. Turkey once again leads in transparency improvement.

• Regionally, Latin America has seen the strongest progress in transparency. Brazil’s Tier 1 cities rank second globally in transparency improvement and now sits in the ‘Transparent’ category. Mexico sits in third position globally (in terms of progress).

• The gap in transparency between Western Europe and some of the main Central European markets has been virtually eliminated as core CEE markets approach the mainstream. Poland, for example, has transparency levels comparable to Western Europe and is now considered by some investors as a ‘core’ market.

• Environmental sustainability has emerged as an important transparency factor with the United Kingdom, Australia and France the most transparent markets in terms of real estate sustainability. The UK has a long history of building energy efficiency systems and introduced the world’s first Green Building rating system. Australia has been the test bed for new environmental laws, regulations and incentives.

“While the world economy is still in recovery, the 2012 Index reveals that real estate investors and corporate occupiers are widening their activity across a broader range of markets. This cross-border activity encourages faster rates of transparency improvement in growth and emerging economies as the markets open up further to international competition and their real estate sectors embrace global best practices,” said Jacques Gordon, global head of strategy for LaSalle Investment Management, the investment management arm of Jones Lang LaSalle.

Chris Fossick Managing Director of Singapore and South East Asia, Jones Lang LaSalle commented: “The real estate markets in South East Asia have made significant inroads in improving their transparency over the past two years. Three out of the top 10 improvers globally are from this region – The Philippines, Indonesia and Vietnam. All three countries have improved on the back of greater availability of market data and changes in the regulatory and transaction processes. With the exception of Vietnam, most South East Asia markets are either in the transparent (Singapore and Malaysia) or semi-transparent band (The Philippines, Thailand and Indonesia). This finding is echoed by the recent rise in direct foreign investments (FDI) into the ASEAN especially into Indonesia and the Philippines. The rise of FDI into ASEAN is testament of global investors’ confidence of the long term growth potential in this region.

He continued: “Whilst there are no Asian cities yet in the top 10 highly transparent markets globally, Hong Kong ranks the highest in Asia at 11 with Singapore closely behind at 13. Both Singapore and Hong Kong have shown improvements in their overall global ranking with Hong Kong marginally ahead of Singapore as a result of more detailed market fundamental data.”

Notably, the 2012 Index highlights continued transparency deficiencies in many African, Middle Eastern and Latin American markets. Nations scoring the lowest on transparency, the so-called opaque markets, include Venezuela, Mongolia, Tunisia, Ghana, Iraq, Pakistan, Algeria, Belarus, Angola, Nigeria and Sudan. Many of these countries were scored for the first time in this edition of the Index.

Jeremy Kelly, National Director, Global Research at Jones Lang LaSalle, said: “While steady progress in real estate transparency has been made during the past two years, much still needs to be done. The pace of regulatory and legal reform has been slow, and we have seen limited improvement on the transparency of transaction processes, despite recognition by government and industry bodies that transparent real estate markets are necessary.”

Kelly cited four main forces that are expected to drive further progress in transparency through the next update in 2014:

• The growing recognition in many emerging economies that the current lack of performance indicators and accurate market information is hindering inward investment and hampering the development of competitive domestic real estate sectors.

• The ongoing credit and sovereign wealth crises, particularly in Europe, will motivate regulators, central banks, foreign investors and other real estate professionals towards better transparency, in the process offering more public data on real estate debt and monitoring lenders more closely.

• As recent corruption scandals come to light (often involving the permit process for commercial real estate development), governments will pay closer attention to the circumstances that engender under-the-table payments.

• The role of properties’ sustainability characteristics will play an increasing role in leasing and investment decisions, growing from a marginal criterion to a critical decision-making input. Such concerns will force greater transparency of energy efficiency and Green Building benchmarking.


For latest update on real estate development and its RA 9646, the Real Estate Service Act of 2009, visit www.ra9646.com.