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September 8, 2017

Ayala completes purchase of 49% of Zalora PH

The Ayala group has completed its acquisition of a 49-percent stake in the country’s leading e-commerce platform Zalora Philippines from Global Fashion Group (GFG). GFG announced on Thursday the transfer of the shares in Zalora to the country’s oldest business house. Conglomerate Ayala Corp., through its wholly-owned subsidiary, AC Ventures Holding Corp., invested in ZALORA Philippines alongside wholly-owned subsidiaries Ayala Land, Bank of the Philippine Islands and Globe Telecom. “This acquisition allows Ayala to capture the growing opportunities in e-commerce,” Ayala Corp. said. More than 1,000 international, local and private-label fashion brands are currently available on ZALORA Philippines, including a range of international high street brands including Mango, Abercrombie & Fitch, Boss, Calvin Klein and popular local brands such as Bench, CLN and Penshoppe. “This partnership will allow ZALORA Philippines to keep investing in brand acquisition, marketing, and logistics infrastructure and will leverage Ayala’s key businesses representing some of the country’s leading companies in banking, telecommunications and retail business,” CFG said.
(Source: Philippine Daily Inquirer, 31 August 2017)

Online shopping in the country has been gaining traction with major developers such as Ayala and SM partnering with online shopping platforms and logistics firms such as Zalora, Lazada, and 2Go to reach far-flung areas that are slowly becoming hotspots for online shopping. Amazon’s recent launch in Singapore is indicative of the growing interest in the Southeast Asian region as an e-commerce hub given the people’s surging disposable incomes. However, dilapidated road and air transport infrastructure raise the cost of doing business and hinder online shopping and logistics firms from making massive investments. For mall operators, we propose that they future-proof their businesses by cashing in on the increasing popularity of online shopping. Online retail shops should be easy to navigate and offer wide-ranging payment solutions. We also suggest that developers complement their online businesses by acquiring logistics and warehousing businesses. This enables retailers to effectively execute last-mile deliveries.

Online job hiring eases, ends 6-month upswing

Online job hiring in the Philippines ended its six-month growth streak after it posted a two percent decline in July, the first time for the year, an online research firm said. Based on the latest Monster Employment Index (MEI), the July online recruitment figure represented a decrease from the six percent growth in June. "With growing competition from China’s presence in the global outsourcing sector, outsourcing activities within the Philippines have eased, shaking the nation’s economy and contributing in part to the overall decline in hiring activity," managing director for Asia-Pacific and Middle East Sanjay Modi said. "Weak remittances and trade deficits have weakened the peso value, seeing the currency plunge to an 11-year low and further affecting hiring confidence," he added. The advertising, market research, public relations, media and entertainment sector fared the worst, with a 17 percent year-on-year decline. Other industries that registered decline are education, and engineering, construction and real estate. In terms of occupational groups, human resource and administrative occupations continued to exhibit the steepest decline across all occupational groups, at a 16 percent year-on-year decline. Purchase, logistics and supply chain also went down 12 percent while marketing communications decreased eight percent.
(Source: The Philippine Star, 03 September 2017)

Despite the slowdown in online job hiring, employment figures released by the Philippine Statistics Authority (PSA) continue to improve. According to the Philippine Statistics Authority (PSA) there were 40.27 million employed Filipinos as of April 2017. The figure is higher than the 39.35 million Filipinos with jobs as of January of this year. Employment opportunities generated by ICT, Financial services, and administrative and support sub-sectors reached 4.39 million as of April 2017, up 8% from 4.05 million in January 2017. Metro Manila corners bulk of these new employment opportunities given that it accounts for nearly 40% of the country’s economic output. The continued creation of employment opportunities in the country bodes well for the office sector as jobs are the greatest drivers of office space take up.

DoubleDragon to spend over P4 billion for industrial hubs, hotels

DoubleDragon Properties Corporation plans to spend P4.8 billion to develop 100,000 square meters (sqm) of industrial leasing hubs and 5,000 hotel rooms across the Philippines by 2020. DoubleDragon president Edgar "Injap" Sia II said on the sidelines of the company's annual stockholders' meeting that funding for these ventures will primarily come from the planned sale of P7.5 billion worth of shares, slated before the end of 2017. Sia said DoubleDragon is slated to open its 1st industrial leasing hub before the end of the year. This is located in a one-hectare lot within the Luisita Industrial Park in Tarlac. Under the plan, DoubleDragon will build two industry hubs each in Northern Luzon, Southern Luzon, the Visayas, and Mindanao. These industrial hubs will primarily cater to fast food companies looking for commissaries and cold storage facilities. It will also target manufacturing firms and logistics firms looking for warehouses. At the same time, DoubleDragon is looking to build 5,000 hotel rooms across the country, primarily through its JinJiang and Hotel 101 brands. P2.7 billion from the share sale will also be set aside for land banking activities for expansions plans beyond 2020.
(Source: Rappler, 30 August 2017)

Colliers believes that the Northern and Central Luzon corridor is a viable hub for industrial park development. The sustained flow of manufacturing investments into the country is enticing developers to apportion a significant fraction of their landbank for industrial parks. Among the emerging locations north of Manila are Ayala’s industrial park within its Alviera township in Porac, Pampanga and Filinvest’s 100-hectare industrial park within the Clark Green City. We believe that the viability of DoubleDragon’s industrial park in Tarlac will be supported by the improvement of infrastructure network between the country’s capital and the Northern and Central Luzon.  Among the factors we see sustaining the demand for industrial space in the country is the rising attractiveness of the Philippines as an investment hub in the region. We also see the sector's growth being sustained by the expansion of existing locators such as British consumer product manufacturer Dyson and Taiwanese electronics firm Kinpo Group; Filipino conglomerates' (e.g. Ayala and San Miguel Corporation) diversification into manufacturing; and expansion of consumer base brought about by ASEAN integration.



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