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Office space developers turn cautious amid rising vacancies

PHILIPPINE STAR/ MICHAEL VARCAS

By Jenina P. Ibañez, Reporter

NEW OFFICE supply this year could be lower than initially projected as developers avoid overbuilding while they await the recovery of the sector, Colliers Philippines said.

In a report, Colliers Philippines said that new office supply could reach 847,600 square meters (sq.m.) this year, down from the 878,200 sq.m. projection as developers try to prevent further increases in vacancies and rent corrections.

“Developers have become more prudent in their supply strategy to ensure that new supply matches actual demand as they await recovery,” the firm said.

The annual office space completion forecast from 2021-2025 was cut by three percent to 621,300 sq.m. Quezon City, Bay Area and Ortigas central business districts could account for almost half of the new supply during the period.   

“The supply pipeline is seen to be decreasing to the 500-600 (thousand) square meter level, which was the level of annual supply during the pre-POGO era,” Colliers Philippines Office Services and Tenant Representation Director Dom Fredrick Andaya said at a briefing on Friday.

Many Philippine Offshore Gaming Operators (POGOs), which had previously driven a surge in office space demand, have been vacating office spaces during the pandemic in response to travel restrictions and tax issues.

Office space transactions have recently improved, fueled by demand from outsourcing and traditional firms responding to lower base rents and higher quality spaces.

JLL Philippines in a briefing last week said lease volume levels are picking up in the office market compared to last year, although this remains low compared to pre-pandemic levels.

“There’s a lot more inquiries for Metro Manila requirements and also Metro Cebu,” JLL Philippines Head of Research and Consultancy Janlo de los Reyes said, noting improving corporate occupier sentiment as vaccination rates grow.

But vacancies still outpace transactions.

“In the first quarter of 2021, we shared that the level of vacant spaces was already decreasing, while the level of transactions significantly increased. But the surge in COVID-19 cases affected heavily the second quarter results,” Mr. Andaya said.

“That’s why we saw the level of vacated spaces climbing up again, which was caused mainly by significant lease cancellations by the POGOs and some other occupiers.”

Office space vacancies rose to 12.7% in the second quarter from 11% in the first three months of the year. Colliers revised its office vacancy projection to 15.6% by the end of the year from 12.5% amid weak pre-leasing and the completion of more spaces towards the end of 2021.

Net take-up for the year could reach only 85,800 sq.m., Colliers said, down from the earlier estimate of 351,000 sq.m.

Greenergy seals investment in ABS-CBN’s U-Pay

ABS-CBN Corp. announced on Monday that it executed a share purchase deal with Greenergy Holdings, Inc. for its acquisition of the media company’s 51 million shares of stock in e-money issuer and remittance firm U-Pay Digital Technologies, Inc.

“ABS-CBN… informs the investing public that the parties have executed the share purchase agreement today for (Greenergy Holdings’) acquisition of ABS-CBN’s 51 million shares of stock in U-Pay Digital Technologies with a par value of P1 per share, at a price of its total par value of P51 million,” the listed media company said in a disclosure to the stock exchange.

ABS-CBN added that there is also a payment of “additional consideration of P3 million for disbursement of fees and charges due on U-Pay’s governmental permits and licenses, reimbursement for the pre-operating expenses advanced by the media company to U-Pay, and assignment to U-Pay of ABS-CBN’s rights and interests to the marks and all other intellectual property rights [it] created and developed.”

The media company said the closing date of the transaction is subject to the completion of certain conditions precedent to closing, including the issuance by the Bangko Sentral ng Pilipinas (BSP) of a letter of no objection to the acquisition of the shares, which should not be later than Sept. 30.

In a separate disclosure, Greenergy Holdings said its board of directors approved the company’s move to enter into a share purchase agreement with ABS-CBN, “which would result in the company owning 51% of the outstanding capital stock of U-Pay.”

“U-Pay is a fintech company engaged in the business of customer and merchant e-wallet/e-money services and other related services, operating a platform therefore, as well as advertising, producing, distributing, and marketing products and services that are connected to the operations of said business,” Greenergy Holdings said.

The listed holding company also said U-Pay has an e-money issuer license issued by the BSP and is registered to operate as a remittance and transfer company.

On Monday, shares in ABS-CBN inched up by 0.54% or six centavos to P11.22 each, while those of Greenergy Holdings rose 2.99% or seven centavos to P2.41 apiece. — Arjay L. Balinbin

Cybergate Galleria Cebu targets IT-BPM firms

CYBERGATE Galleria Cebu is located within the Robinsons Galleria Cebu Destination Estate along General Maxilom Avenue, Cebu City.

ROBINSONS LAND Corp. (RLC) is targeting information technology-business process management (IT-BPM) firms with its new office building in Cebu City.

In a statement, RLC said Cybergate Galleria has been declared as a special economic zone by the Philippine Economic Zone Authority (PEZA) through a presidential proclamation issued in April.

The Gokongwei-led developer is hoping to take advantage of the preference of many outsourcing firms to take up spaces in PEZA-registered buildings.

“We anticipate that locating in PEZA ecozones will still be a top consideration for the IT-BPM sector due to the agency’s professionalism and one-stop shop nature,” RLC Senior Vice-President and Office Buildings General Manager Jericho Go said in a statement.

The Cybergate Galleria is now ready to be turned over to tenants looking to expand in Cebu.

“Locating in a new building like Cybergate Galleria in Cebu ensures that huge investments being made by tenants on fit-out and IT infrastructure may be recovered. Companies could sign-up long-term leases and/or have multiple lease renewals in newer buildings,” Mr. Go said.

Located within a 5-hectare mixed-use complex along General Maxilom Avenue, the 13-storey Cybergate Galleria Cebu has nine office floors, which are now ready for occupancy. It covers a total gross leasable area of 19,500 square meters (sq.m.).

The building has floor plates of about 2,100 sq.m., which give tenants more flexibility to design their workspaces. It is equipped with 100% back-up power and has multiple telecom providers.

“Cybergate Galleria Cebu has round-the-clock CCTV surveillance and security, supported by fire alarm detection system, fire sprinklers, and smoke detectors,” Mr. Go said.

The building is located next to the Robinsons Galleria Cebu, a Summit Hotel and the upcoming three-tower Galleria Residences Cebu.

DoubleDragon to buy back up to P500-M common shares

DOUBLEDRAGON Properties Corp. will be buying back up to P500-million worth of the company’s common shares through “internally generated funds.”

“The buyback program will commence on 30 July 2021 and end on 30 July 2022, and shall be effective until the amount allocated for the said program has been fully utilized or as may otherwise be determined by the company,” DoubleDragon Properties told the exchange on Monday.

Should the company use all of the budget for the share buyback program, it may repurchase up to 48.17 million shares for the P10.38 per share price as of July 29.

It is said to be 2.03% of the company’s total outstanding shares, which stands at nearly 2.37 billion.

Its board of directors approved of the share buyback program on Friday. The company expects the program to improve shareholder value.

The company also said the program aims “to manifest confidence in the company’s value and prospects through the repurchase of the common shares of the company and through the return of a portion of the company’s capital to its shareholders.”

DoubleDragon Properties said the program will be implemented through the open market using the trading facilities of the Philippine Stock Exchange.

“The share buyback program will not affect any of the company’s prospective and existing projects and investments,” the company clarified.

On Monday, shares of DoubleDragon Properties at the stock exchange went up by 1.98% or 20 centavos to close at P10.30 each. — Keren Concepcion G. Valmonte

Pinoy filmmakers participate in Locarno Film Festival

AFTER it was canceled last year because of the ongoing coronavirus pandemic, the Locarno Film Festival in Switzerland will be held this year, with live screenings to be held at the Piazza Grande, as well as online screenings from Aug. 4 to 14.

The Locarno Film Festival, which has been held annually in August since 1946, is celebrating its 74th year.

This year there will be one Filipino film in competition, and  three non-competition Filipino films.

Competing in the Concorso Cineasti del Presente (Filmmakers of the Present Competition), a section dedicated to emerging directors, is Carlo Francisco Manatad’s Kun Maupay Man It Panahon (Whether the Weather is Fine).

The film, starring Daniel Padilla, Rans Rifol, and Charo Santos-Concio, follows a mother and son struggling to survive Typhoon Yolanda that devastated Tacloban, Leyte in 2013.

“This is more focused on the journey of three people,” the film’s director said during an online press conference on July 29 held via Zoom, hosted by the Film Development Council of the Philippines (FDCP). “It’s more focused on the story of the mother and the son, not just trying to survive, but the journey of finding freedom,” said Mr. Manatad

OPEN DOORS PROGRAM
This year’s Locarno Open Doors program will showcase films from Mongolia and the Southeast Asian region for the third and final year. The program consists of the Open Doors Hub, Open Doors Lab, and Open Doors Screenings to be held simultaneously from Aug. 6 to 10.

Alyx Ayn Arumpac’s documentary Aswang and the short films Excuse Me, Miss, Miss, Miss by Sonny Calvento and Next Picture by Cris Bringas, will be part of the non-competitive section of the Open Doors Screenings. The Southeast Asian Open Doors short films entries will be available for viewing online  via https://play.locarnofestival.ch/page/open-doors-shorts/.

Sophie Bourdon, the Head of the Open Doors program, said that one of the challenges in this year’s edition was scouting for talents and filmmakers through correspondence online.

“Cinema is a human adventure. The digital tool is wonderful because it allows us to keep the connection,” she said.

Aside from previously mentioned movies, Filipino director E. Del Mundo and producer Pamela Reyes’ film Sam will be part of the Open Doors Hub, a six-day tailored program that will give filmmakers access to group discussions and networking activities. Meanwhile, producer Stelle Laguda will participate in the Open Doors Lab, a producer-centric six-day training program to hone their skills and awareness in the international marketplace.

“We are always very eager to discover new talent. The Philippines is among the countries where we may find distinctive voices [and] talents,” Ms. Bourdon said. “Locarno is a festival where we are really keen on showing how filmmaking is a never-ending process… We are always eager to show new ways of filmmaking

“I hope this experience can inspire you to enrich your filmmaking,” she added.

FDCP Chairperson and CEO Mary Liza Bautista Diño-Seguerra stressed the importance of representation of Filipinos and their stories on a global stage.

“When your films are in these festivals, it means that the kind of filmmaking that we do does not just resonate with the local audience but with the global audience. So, it’s very important for our cinemas to find audiences not just in the Philippines but all over the world,” Ms. Diño-Seguerra said. “This is exactly what cinema does — for us to speak and represent our stories — represent what the Philippines is, the many facets about us, through our filmmakers and their films.”

She added that for the Philippines to be chosen as part of the film festival “creates a reputation among the international stakeholders to look into the Philippines.”

For more information on the Locarno Film Festival 2021 and the participating films and projects, visit the official website at www.locarnofestival.ch. To view the Southeast Asian film entries for the Open Doors Shorts, visit https://play.locarnofestival.ch/page/open-doors-shorts/. — Michelle Anne P. Soliman

Treasury bills fetch mixed rates on bets of slower July inflation

BW FILE PHOTO
THE GOVERNMENT made a full award of the Treasury bills on Monday even as yield movements were mixed ahead of the release of inflation data. — BW FILE PHOTO

THE GOVERNMENT made a full award of the Treasury bills (T-bills) it offered on Monday after rates moved sideways on expectations of slower inflation in July.

The Bureau of the Treasury (BTr) raised P15 billion as planned via the T-bills it auctioned off on Monday, with total bids reaching P50.76 billion or almost thrice as much as the offer volume. This was also bigger than the P43.027 billion in tenders seen last week.

Broken down, the Treasury borrowed P5 billion as planned via the 91-day papers from P16.252 billion in tenders. The average rate of the three-month debt inched up by 0.3 basis point (bp) to 1.053% from 1.05% in the previous auction.

The government also raised P5 billion as programmed from the 182-day T-bills after total bids for the tenor reached P19.48 billion. The six-month debt fetched an average rate of 1.401%, down by 0.6 bp from 1.407% previously.

Lastly, the BTr made a full P5-billion award of the 364-day securities it offered on Monday after the papers attracted P15.032 billion in bids. The one-year debt was quoted at an average rate of 1.632%, 0.6 bp lower than last week’s 1.638%.

National Treasurer Rosalia V. de Leon said T-bill rates moved sideways on expectations that inflation in July fell within the central bank’s 2-4% target.

A BusinessWorld poll of 15 analysts last week yielded a median estimate of 4% for July headline inflation amid lower meat prices after the government eased import tariffs. This is expected to offset the higher costs of oil and other food items.

If realized, this would mark the first time inflation would fall within the 2-4% target of the central bank since the 3.5% headline print in December. This would also be slower than the 4.1% rise in June but still faster than the 2.7% logged a year ago.

The Philippine Statistics Authority will report official July inflation data on Aug. 5, Thursday.

Meanwhile, a bond trader said demand for the T-bills was muted, with no “new” investors coming in as the players seen during Monday’s auction were mostly the holders of papers maturing this Wednesday.

“Further downside is expected to be limited as investors would rather extend to the two- to five-year space,” the trader said in a Viber message.

On Tuesday, the BTr will auction off P35 billion in reissued 10-year Treasury bonds (T-bonds) with a remaining life of nine years and 11 months.

The Treasury is looking to raise P200 billion from the local market this month: P60 billion via weekly offers of T-bills and P140 billion from weekly auctions of T-bonds.

The government wants to borrow P3 trillion from domestic and external sources this year to help fund a budget deficit seen to hit 9.3% of gross domestic product. — Beatrice M. Laforga

SMDC rolls out vaccines to residents, employees

SM DEVELOPMENT Corp. (SMDC) said around 1,200 residents of its four condominiums in Quezon City have been inoculated against the coronavirus disease 2019 (COVID-19), as part of efforts to support the government’s vaccination program.

SMDC partnering with the Quezon City government and the Philippine Red Cross to bring COVID-19 vaccines to the residents of Mezza Residences, Mezza II Residences, Grass Residences, and Trees Residences, all in Quezon City.

In a statement, SMDC President Jose Mari Banzon said there was a need to join the vaccination campaign after an informal survey revealed majority of its condominium residents have not availed of the government’s inoculation program yet.

The amenity areas were turned into vaccination venues, while some medical doctors and nurses, who are also residents of SMDC properties, volunteered to help.

SMDC said it is planning to expand its vaccination drive to other projects by partnering with local government units and the Philippine Red Cross.

Jollibee launches two new stores in California

JOLLIBEE Foods Corp. recently opened branches in two new locations in California as the company accelerates its expansion in North America.

“California is where we first opened our doors in America more than two decades ago, and we look forward to continue building our presence here in this beautiful region,” Maribeth D. Dela Cruz, president of the Jollibee group for North America, Philippine brands, said in a statement on Monday.

The company launched the Jollibee Bakersfield store at 5520 Stockdale Highway, while the Jollibee Torrance branch is located at 20100 Hawthorne Boulevard.

Jollibee said California is still one of the company’s best performing locations in the region. Its first Jollibee store in the US was opened in 1998 in the state’s Daly City.

Jollibee has opened in eight new locations in North America since the start of the year.

The company is now operating 66 stores in the region, with 49 stores located in Arizona, California, Florida, Hawaii, Illinois, Maryland, Nevada, New Jersey, New York, Texas, Virginia, and Washington. Jollibee also has 17 stores in Canada based in Alberta, Manitoba, Ontario, and Saskatchewan.

It aims to reach 500 restaurants across North America in the next five to seven years.

The company said it will be launching new stores in California, Downtown Chicago, Philadelphia, Orlando, New Jersey, and Manhattan in the coming months.

Jollibee will also be opening branches in Toronto Yonge and Broadway, Calgary CrossIron Mills, Winnipeg, and Vancouver.

On Monday, its shares at the local bourse declined by 0.74% or P1.40 to close at P188.60 apiece. — Keren Concepcion G. Valmonte

Police in China detain Canadian pop star Kris Wu over rape allegation

SINGER Kris Wu — INSTAGRAM.COM/KRISWU/

BEIJING —  Police in China said they have detained a 30-year-old Canadian man surnamed Wu on suspicion of committing rape, with state media identifying him as Chinese-born pop singer Kris Wu.

Mr. Wu was being investigated over accusations made online of  “tricking young girls into having sex with him,” according to a statement by police in the Chaoyang district of the Chinese capital Beijing late on Saturday.

Mr. Wu was publicly accused last month by an 18-year-old Chinese student of inducing her and other girls, some of them under the age of 18, to have sex with him.

The student told Chinese media last month that Mr. Wu had lured her into having sex when she was 17 after plying her with liquor. A police statement last month said the student was invited by Mr. Wu’s team to his house for casting in music videos. Mr. Wu has previously denied the accusation and was not immediately contactable on Sunday.

Mr. Wu’s studio did not immediately respond to a request for comment. His law firm did not answer calls. The Canadian embassy in Beijing did not immediately respond to an e-mailed request for comment.

It was not immediately clear whether Mr. Wu’s arrest was linked to the student who made the accusations in July.

Mr. Wu made his Hollywood debut in the 2017 sci-fi film XXX: Return of Xander Cage and was previously a member of K-pop group EXO.

At least a dozen brands including Porsche and Bvlgari had cut ties with Mr. Wu after the accusation, which have caused a social media storm in China.

Chinese state media have indicated that Mr. Wu’s celebrity status and foreign citizenship are unlikely to help his case.

“Foreign nationality is not a talisman, no matter how famous he is, there is no immunity. Whoever breaks the law will be punished by law,” said the Communist Party-owned People’s Daily on a social media posting on Saturday evening that referred to the case. — Reuters

BDO swings to profit in Q2 on lower loss provisions

BDO UNIBANK, Inc. returned to profitability in the second quarter as it significantly reduced its provisions for credit losses, which it ramped up at the start of the coronavirus pandemic in 2020.

The bank booked a net income of P11.043 billion in the second quarter, based on its quarterly financial report released on Monday. This is a turnaround from the P4.502-billion net loss it recorded in the same period of 2020.

This brought the bank’s net income for the first semester to P21.451 billion, surging by 403% from the P4.252 billion booked a year earlier amid increased non-interest income and lower loan loss provisions, BDO said in a statement.

This translated to a return on average common equity of 10.75% as of June from 2.27% in the same period last year, while return on average assets also improved to 1.26% from 0.26%.

“BDO’s solid balance sheet, healthy capital position, and sustained earnings performance put the bank in a good position to leverage on the country’s economic recovery,” it said.

The bank’s net interest income in the April to June period dropped 2.9% to P32.423 billion from P33.418 billion a year earlier mainly due to lower interest income from loans and other receivables. Its net interest margin was at 4.06% in the first semester, down from 4.36% a year ago.

Meanwhile, non-interest income in the same period dipped 0.9% to P14.311 billion from P14.442 billion a year ago. This was on the back of higher gains from service charges, fees and commissions as well as insurance premiums, which helped offset a decline in trading gains.

Operating expenses increased 7% to P29.88 billion in the second quarter from P27.927 billion, mainly caused by the rise in costs related to its life insurance business.

Provisions for impairment losses declined by 80% to P3.85 billion in the second quarter from the P20.174 billion it set aside a year ago as a preemptive move against delinquencies expected amid the pandemic. This brought the bank’s credit provisions to P6.8 billion in the first semester, down by 69.6% against the P22.4 billion posted in the same period of 2020.

The bank’s loans were flat at P2.3 billion at end-June due to “sluggish demand.” Its gross nonperforming loan (NPL) ratio stood at 3.1%, which BDO said was still lower than its “worst-case” projection of 4-5%. NPL cover was at 100%.

On the other hand, total deposits with the bank inched up by 3.8% to P2.7 trillion as of June from P2.6 trillion a year ago, driven by the 13% growth in current account, savings account (CASA) deposits for a CASA ratio of 84%. Time deposits, meanwhile, dropped 14%.

BDO’s capital base was at P412.7 billion as of June. Its capital adequacy ratio was at 14.99%, up from 13.82% last year, while its common equity Tier 1 ratio stood at 13.9%, both well above the minimum regulatory requirements.

The Sy-led lender’s shares closed at P105.40 apiece on Monday, up by P3.40 or 3.33% from its previous finish. — L.W.T. Noble

Ayala opens facilities for gov’t services

SEVERAL Ayala Malls are now hosting government facilities that offer passport services and national ID registration.

Glorietta Mall in Makati opened a courtesy lane facility for the Department of Foreign Affairs’ Temporary Offsite Passport Services. The site exclusively caters to overseas Filipino workers with valid or existing contracts, senior citizens, pregnant applicants, children below 7 years old, persons with disabilities, and solo parents.

Several Ayala Malls are hosting facilities for the Philippine Statistics Authority’s PhilSys Step 2 national ID registration. These are: Manila Bay, Circuit, Cloverleaf, Vertis North, Fairview Terraces, Harbor Point, MarQuee Mall, and The District Imus.

SOCResources property arm to break ground for second condo tower

THE wholly owned property unit of SOCResources, Inc. will be holding its groundbreaking ceremony for the second tower of the Anuva Residences development in Muntinlupa City.

In a disclosure to the exchange on Monday, the company said SOC Land Development Corp. will begin the construction for the condominium project’s Azalea Tower on Aug. 5.

Plans for the third and fourth towers of the Anuva Residences are said to be ongoing, with a sales launch tentatively set for 2022.

The company also broke ground for the second phase of its horizontal development, Althea Residences, in Biñan City in Laguna last March.

SOCResources said it is considering other sites in Pasay City, Quezon City, Baguio City, and the provinces of Pampanga, Laguna, Cavite, Batangas, and Rizal for its future developments.

On Monday, shares of SOCResources at the local bourse went up by 4.29% or three centavos to close at P0.73 apiece. — Keren Concepcion G. Valmonte

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