GAME CHANGERS AND TRENDS

GAME CHANGERS
AND TRENDS
IN THE REAL ESTATE INDUSTRY
CHARLIE RUFINO
CEO, THE NET GROUP
CHAIR, URBAN LAND INSTITUTE PHILIPPINES
A TALE OF THREE CITIES
Historic Manila
Makati CBD, Circa 1960s
Fort Bonifacio, Circa 2000s
PROPERTY VALUES
THE HOCKEY STICK THEORY
• Property Values follow the
shape of a hockey stick
• Early stage - credibility lag
• Terminal stage - “Irrational
Exuberance” – Alan Greenspan
TIME
PROPERTY VALUES
THE NEW PARADIGM. HOCKEY STICK GROWTH
Bonifacio
Makati
Manila
1950s
1960s
1990s
PROPERTY VALUES
THE GAME CHANGERS
Bonifacio
Makati
Manila
1950s
1960s
1990s
PROPERTY VALUES
MY JOURNEY
Bonifacio
Makati
Manila
1950s
1960s
1990s
PROPERTY VALUES
WATCH OUT FOR: REAL ESTATE BUBBLES
1997
Asian Financial Crisis
TIME
Source: Nostalgia Manila, Lou Gopal
HISTORIC MANILA: AVENIDA RIZAL – THEATER DISTRICT
Source: Video48
HISTORIC MANILA: AVENIDA RIZAL – THEATER DISTRICT
HISTORIC MANILA: ESCOLTA - THE FINANCIAL DISTRICT
MAKATI CITY: RIZAL THEATER – 1960S
Insular Life
Ayala Tower One
Rizal Theater
Makati Ave.
Makati Shangri-la Hotel today
The Peninsula Hotel today
Glorietta today
Source: Nostalia Manila, Lou Gopal, 2014
Ayala Ave.
MAKATI CITY: RIZAL THEATER – 1960S
Source: Jerms Estrada, Flickr
MAKATI CITY: 1960S
Legaspi Village
Salcedo Village
Ayala Ave.
Source: LPL Suites Greenbelt
CONCORD CONDOMINIUM (1971) – FIRST HIGH-RISE CONDO
Source: LPL Suites Greenbelt
CORINTHIAN PLAZA (1977) – FIRST CURTAIN GLASS WALL
RUFINO TOWER (1963 / 1993) – TALLEST STEEL STRUCTURE IN THE PHILIPPINES
AYALA AVE. CORNER V.A. RUFINO ST.
Source: Skyscrapercity,, Ricky Co 2016
FORT BONIFACIO (1996)
BONIFACIO GLOBAL CITY – MIRACLE MILE
Source: Skyscrapercity,, J. Santos 2015
NETROPOLIS – NET PARK, NET LIMA, ASCOTT BGC
28th St.
5th Avenue
4th Avenue
26th St.
NET PARK – RAIN WATER HARVEST
The NET Park
1,700 sqm
The gardens and
landscaping uses
recycled water
collected on site
Green Roof
2,500 sqm
Rooftop park also
has a rainwater
collection system
and for the
building
THE NET PARK – ADOPT A PARK
NET PARK – MID BLOCK ACCESS
Existing trail that
was incorporated
into the design of
the building and
street block to
provide a midblock pedestrian
access
NET PARK VIDEO
HMRID INDUSTRIAL PARK & LOGISTICS CENTER
- Flexible spaces
- Industrial/Office
- E-Fulfillment Centers
HMRID INDUSTRIAL PARK & LOGISTICS CENTER
TRENDS
IN
REAL ESTATE
LAND-USE INDUSTRY
ECONOMIC DEVELOPMENT
20th Century Model
21st Century Model
• Public sector leadership
• Public/Private Partnerships
• Shotgun recruitment strategy
• Laser recruitment strategy
• Low cost positioning
• High value positioning
• Cheap labor
• Highly trained talent
• Focus on what you don’t have
• Focus on what you do have
• Quality of life unimportant
• Quality of life critical
• Driven by transactions
• Driven by an overall vision
• Key infrastructure = Roads
• Key infrastructure = Education
TAX INCREMENT FINANCING (TIF)
TIF allows local governments to
invest in infrastructure and other
improvements and pay for them by
capturing the increase in property
taxes generated by the
development.
Target TIF towards:
– Industrial development
– Developing affordable housing
– Tourism zones/convention center
– Smart Growth
– Encouraging specific retail areas
BUSINESS IMPROVEMENT DISTRICT (BID)
A business improvement district (BID) is a defined area within which
businesses are required to pay an additional tax (or levy) in order to fund
projects within the district's boundaries. The BID is often funded primarily
through the levy but can also draw on other public and private funding streams.
REAL ESTATE INVESTMENT TRUST (REIT)
A REIT is a type of security that invests in real
estate through property or mortgages and
often trades on major exchanges like a stock.
REITs provide investors with an extremely
liquid stake in real estate. They receive special
tax considerations and typically offer high
dividend yields.
Consider for the Philippines:
• REITs are a stabilizing force in the real
estate market during times of economic
uncertainty.
• REITs support national economic growth
(Generated 1M jobs in the US in 2015)
• REITs are accessible to all investors at
all income levels
• 30 countries have adopted the U.S.
approach to REITs, including Australia,
Canada, France, Germany, Great Britain,
India, Japan, Mexico and Singapore
YOUNG PEOPLE / MILLENNIALS
• Getting married later or not at all
• Postponing home ownership
• Own fewer cars and drive less
• Are concentrating in major urban
areas and “cool” towns
• Favor walkable neighborhoods
• Adept with technology and social
networking
• More tolerant
• Use social media/internet to make
buying decisions
SHARING / CO-WORKING SPACES
NAVY YARD, PHILADELPHIA – ADAPTIVE RE-USE
•
•
Headquarters of Urban Outfitters
Adaptive Re-Use
Unique, unconventional
work spaces
DRIVER-LESS CARS AND THE END OF PARKING
1111 LINCOLN ROAD – MIAMI, FLORIDA
SOUL OF THE COMMUNITY STUDY
“Communities with the
highest levels of
attachment to place also
have the strongest
economies.”
Source: Knight Foundation. 2010.
BGC GREENWAY – COMMUNITY ASSET
WALKABLE, COMPACT NEIGHBORHOODS
• Promote Health – the average
resident weighs 6-10lbs, less
than residents of car
dependent neighborhoods.
• Save Money – Transportation
is the 2nd largest household
expense
• Foster Connection – studies
show that every 10 minutes
spent in a car commute
reduces time spent in
community activities by 10%
• Increases Value– Every one
point increase in Walk Score
equates to a $600 to $3000 USD
increase in value
• Commercial Premiums – A new
study by Real Capital Analytics
(RCA) shows significantly greater
appreciation for commercial
properties in “highly walkable
locations” vs “car dependent
locations” (125% appreciation vs
22%)
BUILDING HEALTHY PLACES TOOLKIT
ULI’s Building Healthy Places Toolkit:
Strategies for Enhancing Health in
the Built Environment outlines
21 evidence-supported
recommendations for enhancing
health outcomes in real estate
developments.
Developers, owners, property
managers, designers, investors, and
others involved in real estate
decision making can use the report’s
recommendations and strategies to
create places that contribute to
healthier people and communities,
and to enhance and preserve value
by meeting growing desires for
health-promoting places.
DOWNLOAD A FREE E-COPY: bhptoolkit.uli.org
GABE KLEIN , TRANSPORTATION PANEL AND PITCH BATTLE FOR
PLANNING & LOGISTICS – JUNE 13, 2016 11:30-2PM
ULI HEALTHY PLACES AWARDS
ULI Philippines Healthy Places
Awards recognize the outstanding
and innovative Projects that
advance design strategies and
focus on the development of
environments that promote healthy
living in our region.
July 14, 2016
Bonifacio Global City
FREE
TO NOMINATE ANY COMPLETED
REAL ESTATE PROJECT
Send nominations to
[email protected]
Nominees and winners will be
recognized at an awards ceremony
and reception on The ULI Building
Healthy Places Awards will have
four categories in the Leadership in
Healthy Design and Performance
Award:
• Residential
• Commercial
• Institutional
• Other/Miscellaneous
“NEVER DOUBT THAT A SMALL
GROUP OF COMMITTED
INDIVIDUALS CAN CHANGE THE
WORLD. INDEED, IT IS THE ONLY
THING THAT EVER HAS.”
– MARGARET MEAD
WHAT ARE THE NEXT GAME CHANGERS?
WHERE IS THE NEXT HOCKEY STICK AND WHEN?
PROPERTY VALUES
Gaming?
REITs?
E-Commerce?
BPOs
??????
Condos
Bonifacio
Historic
Center
Makati
Manila
1950s
1960s
1990s
FUTURE
THANK YOU
Charlie Rufino
CEO, The NET Group
Chair, Urban Land Institute Philippines