Leasing
Guidelines
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Introduction
Cushman & Wakefield and our partners have prepared this leasing guideline to assist and help
educate our Corporate Clients with their real estate decision-making process. While reviewing the
contents of this book, it is important to remember that different regions in different countries have
their own culture, real estate practices and policies. We have endeavored to provide the highlights
for every major market, but we strongly encourage our clients to contact the local Cushman &
Wakefield office or Client Solutions team member if there are any questions or conflicting
information within this guide.
Cushman & Wakefield have made every effort to make this leasing guide as accurate as possible.
Cushman & Wakefield accepts no responsibility if this should prove not to be the case and no
warranty or representation, express or implied, is made to the accuracy or completeness of the
information contained herein. Since this document has been created to be a guide, it should also be
understood that every transaction will be different in respect to the terms entered into through
negotiations with individual landlords.
Josemari C. Cuervo
Cuervo Far East, Inc.
5F S&L Building
101Esteban cor. Dela Rosa Sts.
Legaspi Village, Makati City
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Lease Terms
Rent Free Months One (1) to three (3) months for fit-out
Service Charges, Repairs
Internal Tenant
and Insurance
Usually net usable area. Whole floor tenants may be the exception
Measuring Practice wherein gross areas are the usual measuring
practice.
Legislation
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Rental Rates and Costs
Who pays for the brokerage fee and what is the typical fee?
Landlords usually pay for the brokerage fees equivalent to one (1) months face rent but this may
vary on market conditions. It is unusual for Landlords to pay for rent renewals or rent review.
Lease Terms
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Do tenants have automatic sublet or assignment rights?
No. Subletting rights have to be negotiated with the Landlord. Landlords do not usually agree to
sublet leased premises except for lessee affiliates, subsidiaries, or in case of mergers.
What is required at the commencement of the lease and what costs are associated with it?
Landlords usually require rental advance payments, security deposits, vetting fees and construction
bond for fit-out. Rental advance payments and security deposits may vary but are usually equivalent
to three (3) months respectively.
What kind of expansion options for growth of space can a tenant typically negotiate?
Landlords may be willing to grant rights of first refusal for premises within the same floor or
contiguous floors above or below the leased premises. However, Landlords do not give these rights
over long periods. Six (6) months to one (1) year is usual.
Is it possible to terminate leases? What is the process and are there penalties?
Yes if it is negotiated in the lease agreement. Tenants will have to send notice to pre-termination
usually 90 days prior and a penalty is due to the Landlord usually through the forfeiture of the
security deposit plus additional three (3) to six (6) months penalty.
At the conclusion of a lease term, what is the process for handing back the space?
The Tenant is responsible to turnover the premises in the same condition as it was at the
commencement of the term, subject to normal wear and tear. However, it is usual if the premises
were leased to the Tenant bare of improvements that the Tenant is required to retain all hard
improvements such as the ceiling, walls and fixed partitions back to the Landlord. Inventory checks
are also usually done prior to turning back the unit to the Landlord.
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Are permits required?
Yes. Usually the architect or interior designer will have to apply for all the necessary permits first
from the building management and from the local government as well. Renovations are not
exempted from these permits.
Is there a shortage of any construction item or any items that aren’t available?
No. Manila has a vast resource of construction materials. Lead times only exist for imported modular
office partitions and systems.
Fit Out Costs
What is the typical cost for fitout, basic telecom/ cabling, furniture, etc. for an international
firm?
Costs may vary depending on the design, finish, IT requirement, cabling, construction schedule, etc.
Usually the following prices may be anticipated.
Building Systems
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What is the typical floor size and ceiling height?
Floor sizes may vary from building to building in Manila. Grade-A office buildings have floor areas of
1,000 sq.m. to 2,000 sq.m. While lower grade office buildings often range from 500 sq.m. to 900
sq.m. Ceiling heights also vary but Grade-A offices have ceiling heights of 2.65 to 2.85 m. with
raised flooring and 2.40 m for lower grade office buildings and those without raised flooring.
Legal System
Who is the typical landlord, for example, a large institution, insurance firm, individual, etc?
Typical landlords are usually local developers such as Ayala Land, Megaworld Corporation, and
Filinvest Land. Banking institutions such as RCBC, Pbcom, Unionbank, and insurance firms like
Philamlife and Insular Life also have developed and lease out Grade-A Buildings.
This report contains information available to the public and has been relied upon by Cushman & Wakefield on the basis that it is accurate and complete. Cushman &
Wakefield accepts no responsibility if this should prove not to be the case. No warranty or representation, express or implied, is made to the accuracy or completeness of the
information contained herein, and same is submitted subject to errors, omissions, change of price, rental or other conditions, withdrawal without notice, and to any special
listing conditions imposed by our principals.
Copyright © 2003 Cushman & Wakefield (HK) Limited
All Rights Reserved
Company Licence No. C-002429
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