Valuation Report - MREIT INC. Festive Walk 1B Towers 1 2 FINAL SIGNED

Prepared for:
MREIT, INC.
2022-03MV: Festive Walk 1B -
Festive Walk Road
Iloilo Business Park, Mandurriao District
Iloilo City, Philippines
As of: 31 December 2021
Contact Details:
MREIT, INC.
18th Floor, Alliance Global Tower
36th Street corner 11th Avenue
Uptown Bonifacio, Taguig City
Attention: MR. KEVIN ANDREW L. TAN

President and Chief Executive Officer
Prepared by:
Santos Knight Frank, Inc.
10/F Ayala Tower One & Exchange Plaza
Ayala Avenue, Makati City, Philippines
Santosknightfrank.com
T: +632 7752 2580
F: +632 7752 2571
In compliance with SEC Memorandum Circular #2, Series of 2014, Santos Knight Frank, Inc. has been issued Certificate of Accreditation No. 011, effective up to 20 March 2022.
Executive summary
The executive summary below is to be used in conjunction with the valuation report to which it forms part and is
subject to the assumptions, caveats and bases of valuation stated herein and should not be read in isolation.
Address Festive Walk 1B, Festive Walk Road, Iloilo Business Park, Mandurriao District, Iloilo City,
Philippines.
Description The Property comprises land (leasehold), leasehold improvements including building
machinery & equipment identified as Festive Walk 1B, a PEZA-registered, Grade A Office
Building located on the southeast side of Festive Walk Road, just across One and Two
Global Center, some 300 meters southwest from the corner of Festive Walk Road and Taft
Street (Iloilo City - Aleosan Road).
Area for Land 5,991 sq.m.

Lease
Gross Floor Area 19,416.75 Gross Leasable Area 14,702.71

Occupancy 91% WALE 2.86 years
Ave. Lease Rate PhP576/ sq.m/ month
CLIENT MREIT, INC.
Tenure Building and building machinery & equipment - Freehold

Land - Leasehold (25 years, renewable for another 25 years)
MARKET VALUE PhP1,510,000,000

(Income Approach) ONE BILLION, FIVE HUNDRED TEN MILLION PHILIPPINE PESOS
Valuation date 31 December 2021
Date of Issue 18 March 2022
Valuation report │ Festive Walk 1B, Iloilo Business Park, Iloilo City │ 2022-03MV Page 1
Prepared for: MREIT, Inc. │ 31 December 2021
Contents
Executive summary 1
1 Instructions 3
Engagement of Santos Knight Frank 3
Scope of enquiries & investigations 4
Valuation basis 4
2 The Property 6
Location 6
Land Details 7
Description of Leasehold Improvements 9
Accommodation 9
Condition 10
Services 10
Tenancies 10
Roadways and Access 11
Environmental Considerations 12
Highest and Best Use 12
Photographs 12
3 Valuation 13
Methodology 13
Income Approach 14
Valuation basis 17
Valuation date 17
General Assumptions 18
Market Value 18
Appendices
Appendix 1 - Assumptions, Limiting Conditions and Disclaimers
Appendix 2 - Letter of Engagement
Appendix 3 - General Terms of Business
Appendix 4 - Master Development Plan
Appendix 5 - Photographs
Appendix 6 - Valuation Calculation (Income Approach - DCF)
1 Instructions
Engagement of Santos Knight Frank
Instructions 1.1 We refer to our Letter of Engagement dated 26 January 2022, to provide a
Valuation Report on the opinion of Market Value using Income Approach of that
certain Property consisting of land (leasehold), leasehold improvements, and
building machinery & equipment identified as Festive Walk 1B located along
Festive Walk Road, within Iloilo Business Park, Mandurriao, Iloilo City,
Philippines, (“the Property”). A copy of that document is attached herein as
Appendix 2.
1.2 This valuation has been carried out by Santos Knight Frank, Inc. (“Santos Knight
Frank” or “SKF”), in accordance with our General Terms of Business for
Valuations (“General Terms of Business”), as attached as Appendix 3.
Client 1.3 Our client for this instruction is MREIT, Inc. (“the Client”).
Valuation 1.4 This valuation has been undertaken in accordance with the International
standards Valuation Standards, as well as other local standards.
Purpose of 1.5 You have confirmed that this valuation is for the purpose of possible asset
valuation infusion to MREIT, Inc.
Conflict of interest 1.6 We confirm that we do not have any material connection or involvement giving
rise to a conflict of interest and are in a position to provide an objective and
unbiased valuation.
1.7 We are acting as external and independent valuers in this engagement.
Responsibility to 1.8 Our valuation report is only for the use of our Client and for the purposes for which
third parties are stated herein, and no liability is accepted to any third party for the whole or
any part of its contents.
Disclosure & 1.9 Except for the purposes which are stated herein, neither the whole nor any part
publication of this valuation nor any reference thereto may be included in any published
document, circular or statement nor published in any way without our prior written
approval of the form or context in which it may appear.
Limitations on 1.10 No claim arising out of or in connection with this valuation report may be brought
liability against any member, employee, partner, director or consultant of Santos Knight
Frank, Inc. Those individuals will not have a personal duty of care to any party
and any claim for losses must be brought against Santos Knight Frank, Inc.
1.11 Santos Knight Frank, Inc.’s total liability for any direct loss or damage caused by
negligence or breach of contract in relation to this instruction and valuation report
is limited to the amount of the level of our fee, specified in the Letter of
Engagement, a copy of which is attached as Appendix 2. We do not accept
liability for any indirect or consequential loss (such as loss of profits).
1.12 The above provisions shall not exclude or limit our liability in respect of fraud or
for death or personal injury caused by our negligence or for any other liability to
the extent that such liability may not be excluded or limited as a matter of law.
Expertise 1.13 The valuation process was performed by Marvin A. Santos under the
supervision of Jacqueline T. Guerta and Jesus Constance M. Castro, both
licensed Real Estate Appraisers. The Principal Signatory on behalf of Santos
Knight Frank, Inc. and who also reviewed the Valuation Report, is Wenceslao D.
Fuentes, Jr., also a licensed Real Estate Appraiser. We confirm that the above-
named Licensed Real Estate Appraisers are registered with the Professional
Regulation Commission (“the PRC”), having sufficient current knowledge of the
particular market and the skills and understanding to undertake the valuation
competently.
Vetting 1.14 This report has been vetted as part of Knight Frank global standards.
Scope of enquiries & investigations
Inspection 1.15 At the time of valuation due to COVID 19, there was a travel restriction within
the locality where the Property is located. Thus, following instructions from the
Client, no actual inspection of the Property was conducted. You should note that
this significantly limits the extent to which reliance can be placed upon this
valuation report
Investigations 1.16 The extent of enquiries/investigations made is set out in our General Terms of
Business. In carrying out this instruction we have undertaken verbal and
internet-based enquiries referred to in the relevant sections of this report. We
have relied upon this information as being accurate and complete.
Information 1.17 In this report, we have been provided with information by the Client. We have
provided relied upon this information as being materially correct in all aspects. In
particular, we detail the following:
• Vicinity Map, Floor Plans and Floor Area Tabulations
• Building Profile
• Master Development Plan
• Draft Lease Contract
• Rent Roll
• Financial Statements
• Income and Expense Projections
• Historical and Current Occupancy
1.18 In cases where we were not provided with documents or information, we did our
own enquiries as outlined and stated in the report. Any assumptions in lieu of
the lack of information is also set out in the relevant sections of this report.
Valuation basis
1.19 In accordance with your instructions, we have provided an opinion of value on
the basis of Market Value.
Market Value (MV) 1.20 Our valuation is made on the basis of Market Value which is defined under IVS
2019 as “the estimated amount for which an asset or liability should exchange
on the valuation date between a willing buyer and a willing seller in an arm’s-
length transaction, after proper marketing and where the parties had each acted
knowledgeably, prudently and without compulsion.”
In this definition, it is assumed that any transaction shall be based on cash or

its equivalent consideration. Our valuation has been made on the assumption
that the owner sells the Property on the open market without the benefit of a
deferred terms contract, leaseback, joint venture, management agreement or
any similar arrangement which would affect the value of the Property.
It is further assumed that title to the Property is good, marketable and free from
liens and encumbrances, and that fee simple ownership is transferable.
The values shall be free and clear of all mortgages, without regard to VAT
payments, gains taxes, transfer taxes, recording fees, etc. and expressed in the
local currency (PhP). No allowances are to be made for any disposal costs or
liabilities, or for taxation upon sale.
Valuation date 1.21 The valuation date is 31 December 2021.
2 The Property
Location
Address 2.1 The Property is identified as Festive Walk 1B, an office building located on the
southeast side of Festive Walk Road, just across One and Two Global Center,
within Iloilo Business Park, Mandurriao District, Iloilo City, Philippines.
The Property is situated about 80 meters southeast from Megaworld Boulevard,

some 300 meters southwest from the corner of Festive Walk Road and Taft Street
(Iloilo City - Aleosan Road), in the immediate vicinity of Iloilo Museum of
Contemporary Art (ILOMOCA), around 380 meters northeast from Dayton
Avenue, and approximately 6.0 kilometers northwest from Iloilo City Hall.
Below is a satellite image of the district courtesy of Google Maps showing the
Property and its relation to the immediate vicinity.
SITE
Note: Image courtesy of Google Maps.
2.2 The street plan below shows the location of the Property.
SITE
Neighborhood 2.3 The Property is located in Iloilo Business Park, a 72-hectare mixed use, master
planned development by Megaworld Corporation. It is located on the site of the
former Iloilo Airport, in Mandurriao District. The Park is an integrated township
project featuring a commercial district, a lifestyle mall, office buildings catering to
business process outsourcing firms, boutique and deluxe hotels, residential
condominiums and a convention center.
Some of the notable developments in the nearby areas include SM City Iloilo,
Gaisano Capital Iloilo, Ateneo de Iloilo, QualiMed Hospital, Avida Towers Atria,
Atria Park District, Western Visayas Medical Center, and Robinsons Place Jaro,
among others.
Accessibility 2.4 The Property fronts Festive Walk Road, a secondary road that connects to
Megaworld Boulevard on the west and Taft Street (Iloilo City - Aleosan Road) on
the northeast, providing excellent access to other major sections of the metropolis.
Public transport like jeepneys and taxicabs are available throughout the day along
Megaworld Boulevard.
Other community centers like post office, churches, hospitals, and public and
private schools are likewise accessible from the Property.
Land Details
Draft Contract of 2.5 We were provided with a copy of the Draft Contract of lease dated 03 February
Lease 2022 covering the underlying land, executed by and between Megaworld
Corporation, as the Lessor, and MREIT, INC, as the Lessee.
Some of the salient details of the contract are as under:
• The land lease period shall commence upon the issuance of

MREIT shares in the name of Megaworld Corporation via property
for share swap. This Contract and shall expire twenty-five (25)
years thereafter (Initial Lease Period) unless sooner terminated as
provided in the contract, with the Lessee having the option to
renew for twenty-five (25) years (Renewed Lease Period) on such
terms and conditions mutually acceptable to the parties.
• As consideration for the lease, Lessee shall pay the lessor Rent
equivalent to:
From 01 July 2023 to 30 June 2025: Two and a Half
Percent (2.5%) of gross rental income for office and
retail properties; and
From 01 July 2025 onwards: Five Percent (5%) of gross
rental income for office and retail properties
• The rent is exclusive of Value Added Tax (VAT), Documentary
Stamp Taxes (DST) and other taxes accruing by reason of the
execution of this Contract, which shall be borne by the Lessee.
The VAT shall be included in the payment of the Rent to Lessor.
The five percent (5%) Expanded Withholding Tax (EWT) shall be
withheld by the Lessee from the Rent and timely remitted to the
Bureau of Internal Revenue (BIR) for credit to Lessor. Lessee shall
furnish Lessor with the corresponding withholding tax certificate
for the sums withheld. The tax rates are subject to the prevailing
law at the time of payment. Should the tax rates increase during
the term of this Contract, the rent corresponding to the net amount
to be received by Lessor by virtue of this Contact, shall not in any
case be reduced;
• The rent payable to the Lessor is due every quarter in arrears. The
rent shall be paid in the form of manager’s check of a reputable
bank acceptable to the Lessor at Lessor’s main office or at any
other convenient place designated by Lessor, on or before the 5th
day of the succeeding quarter, without need of notice or demand;
• All Estate Dues shall be timely and fully paid by the Lessee to the
Estate Association on their due dates pursuant to the rules and
regulations adopted by the Estate Association.
Based on other information provided by the Client, below are additional

details of the contract:
• Rent payment commencement date is on July 1, 2023;

• Area for Land Lease is 5,991 sq.m. Reportedly, it forms part of Lot
5, Pcs-06-005277 covered by Transfer Certificate of Title No. 095-
2010001062 with an area of 12,420 sq.m., issued in favor of
Megaworld Corporation.
Tenure 2.6 As evidenced by the Contract of Lease above, ownership rights to the Land is
leasehold.
Terrain 2.7 The terrain of the land is assumed generally flat. Its finished elevation is assumed
slightly higher than the existing grade of the fronting roads.
Description of Leasehold Improvements
Improvements and 2.8 Based on documents provided to us by the Client, this is an office building
Machinery & identified as Festive Walk 1B, described below:
Equipment
Festive Walk 1B –
This is a four (4)-storey, PEZA-registered, Grade A, reinforced
concrete-framed office building with LGU Safety Seal. Construction of
the building was reportedly completed sometime in year 2018. Based
on documents provided, the building is currently leased by APEX
MGW, Inc., RMS Collect Phil., Inc., Don Chua – Samgyupsal,
Megaword Corp., and MDSS Crossway. Ground floor is presently
being utilized for retail purposes.
Architectural details and/or finishes of the building consist of

reinforced concrete footings and foundations, reinforced concrete
floor slabs at all levels, reinforced concrete columns, girders and
beams construction. External finishes consist of mainly concrete
hollow block walls of plastered cement / painted finish. Interior finishes
comprise of porcelain tiles floor finish on common areas and
walkways, gypsum board on metal framing ceiling, tempered clear
glass on aluminum frame windows, and glass panel, flush-type, steel
and PVC-type doors.
The building is provided with mechanical and electrical services such

as elevators, air conditioning and ventilating system, cooling tower,
standby power supply, electrical power and distribution system,
domestic water supply system, overhead water tank, fire-fighting &
fire protection system, and CCTV & security monitoring. The building
is painted and provided with complete electrical lighting and plumbing
facilities. Based on the floor area tabulation provided to us by the
Client, the building has a total gross floor area of about 19,416.75
sq.m.
Tenure 2.9 We were advised that the Client owns the improvements described above. As
stated, the land is covered by a Lease Agreement. We have, however, treated
the improvements as freehold.
Accommodation
Measurement 2.10 Based on the information provided to us by the Client, the building has a total
gross floor area of approximately 19,416.75 sq.m.
Condition
Scope of 2.11 As we have not done an ocular inspection of the Property, we have assumed that
Inspection the Property is free from urgent or significant defects or items of disrepair.
2.12 Likewise, we have not been able to carry detailed on-site measurement to verify
the site and gross floor areas of the Property and we have no reason to doubt
the truthfulness of the areas shown on the documents provided to us.
2.13 For the machinery, our assessment was based on the premise that the machinery
is in a condition commensurate with age and normal usage.
2.14 Machinery and/or equipment were disclosed to us as complete units i.e.,

machinery and/or equipment are meant to include all parts and accessories
normally comprising the unit.
Comments 2.15 We have assumed that the Property is in sound order and free from structural
faults, rot, infestation or other defects, and that the services are in a satisfactory
condition.
Ground conditions 2.16 We have not been provided with a copy of a ground condition report for the site.
We have assumed that there is no adverse ground or soil conditions and that the
load bearing qualities of the site are sufficient to support the building.
Services
2.17 We have assumed that main supplies of electricity and water are provided to
the Property. Telephone communication facilities are likewise assumed
available. Sewer and drainage are believed to be discharged to the building’s
sewerage system.
Tenancies
Tenancy 2.18 We have been provided with the tenancy information by the Client and have
Information relied on the information as being correct. We made reference to this alongside
the Contract of Leases made available to us. No additional verification has been
undertaken.
2.19 Based on the rent roll provided, total leasable area is 14,702.71 sq.m.
2.20 The Property currently has a mix of Business Process Outsourcing (BPO)
companies and some retail tenants. Based on the figure below which
summarizes the tenancy profile of the Property, BPOs currently take up 82% of
the Property’s leasable area while retail tenants are at 9%.
Source: SKF/MREIT
2.21 As of 31 December 2021, the Property is about 91% occupied with a Weighted
Average Lease Expiry (WALE) of 2.86 years. It has been noted that certain
portions of the leased areas will expire in the years 2023, 2025 and 2026 with
53%, 2% and 45% of leased area respectively.
Source: SKF/MREIT
Roadways and Access

Roadways 2.22 Based on a copy of Master Development Plan provided to us, the Property
enjoys frontage along Festive Walk Road. A copy of the said Master
Development Plan is attached herewith as Appendix 4.
As appearing in images from Google Maps, Festive Walk Road is about 12

meters wide, concrete-paved and provided with curbs and gutters, cemented
sidewalks and underground drainage system.
Access 2.23 In reporting our opinion of value, we have assumed that there are no third-party
interests between the boundary of the Property and the abutting roads and that
accordingly the Property has unfettered vehicular and pedestrian access.
Environmental Considerations
Flooding 2.24 Being situated within a well-planned commercial business district, we are
ascertained that the Property is not within an indicative floodplain and that there
is therefore a minimal risk of flooding.
Contamination 2.25 As stated in the General Terms of Business, investigations into environmental
matters would usually be commissioned from suitably qualified environmental
specialists. Santos Knight Frank, Inc. is not qualified to undertake scientific
investigations of sites or buildings to establish the existence or otherwise of any
environmental contamination, nor do we undertake searches of public archives
to seek evidence of past activities which might identify potential for
contamination.
2.26 Subject to the above, we have not been made aware of any uses conducted at
the Property that would give cause for concern as to possible environmental
contamination. Our valuation is provided on the assumption that the Property is
unaffected.
Highest and Best Use

2.27 “Highest and Best Use” is defined as the most profitable likely use to which a
property can be put. The opinion of such use may be based on the highest and
most profitable continuous use to which the Property is adapted and needed, or
that use of land which may reasonably be expected to produce the greatest net
return to land over a given period of time. Alternatively, it is that use, from among
reasonably probable and legal alternative uses, found to be physically possible,
appropriately supported, financially feasible, and which results in highest land
value.
2.28 Considering the Property’s size, shape, topography, current zoning classification
and the prevailing land uses and development in the area, we are of the opinion
that the existing commercial land development is the highest and best use of
the Property. Market and economic conditions are supportive of this continued use.
Photographs
Outside Views of Festive Walk 1B (Pictures provided by the Client)
Interior Views of Festive Walk 1B (Pictures provided by the Client)
Interior Views of Festive Walk 1B (Pictures provided by the Client)
2.29 Other photographs of the Property are attached at Appendix 5.
3 Valuation
Methodology
Valuation 3.1 The purpose of this appraisal is to estimate the Market Value of the Property. In
Rationale any given valuation exercise, market value can be arrived at using either one or
a combination of the three (3) approaches to value, namely: Market (or Direct
Sales Comparison) Approach, Income Approach, and the Cost Approach. The
determination of the appropriate approach for a given property is based on the
quality and quantity of data available, particularly its relevance to the Property
under appraisement. If more than one valuation approach is utilized, the resulting
values are reconciled to produce a final value conclusion.
3.2 Due to the nature of the Property and the purpose of this appraisal, we have used
the Income Approach to value. The Market (or Direct Sales Comparison)
Approach and Cost Approach were not used.
Income Approach
3.3 The Income Approach is applicable to the valuation of income producing
properties, business enterprise as well as the valuation of intangible assets.
This approach measures the current value of an asset by calculating the
present value of its future economic benefits by discounting expected cash
flows at a rate of return that compensates the risks associated with the
particular investment.
Discounted Cash 3.4 The discounted cash flows, or DCF valuation is the most popular
Flow Analysis fundamental approach in valuing the future economic benefits of a projected
income stream. DCF measures actual yield rather than paper income for the
asset/business owner and the analysis of DCF is widespread and mandatory
in the various fields of business making DCF-based valuation ideal.
3.5 The valuation process, briefly stated, consists of the following:

• Estimation of the revenues generated;
• Estimation of the costs and expenses related to the operations of the
development;
• Estimation of an appropriate discount rate; and
• Discounting process using an appropriate discount rate to arrive at
an indicative market value
Discount Rate 3.6 The discount rate was computed using the build-up method - calculated by
adding together the different variables. The basic formula for the traditional build-
up model is:
Discount Rate = Rf + P + MR + LR
Where Variable Proxy Statistic
Rf Risk Free Rate PDEX Risk Free Rate
P Equity Risk Premium Country Risk
MR Management Risk
LR Liquidity Risk
The variables that were used to generate the Discount Rate are exhibited in the
table below, along with the sources and/or dates as at or nearest the 31
December 2021 valuation date.
Risk Free Rate (10Y) 4.82% As of 31 December 2021, BVAL PDEX

Equity Risk Premium 3.00% As of 22 October 2021, OECD
Management Risk 0.80%
Liquidity Risk 0.90%
3.7 The following assumptions were used to arrive at the Discount Rate using the
Build-Up Method.
Risk Free Rate 3.8 For purposes of this valuation, we have adopted, as risk-free rate, the 10-year T-
bond rate from PDEx. The Philippine Dealing & Exchange (PDEx) system
appointed Bloomberg as technology partner for the electronic trading and
surveillance system for the government and corporate bonds traded in its market.
PHP BVAL Reference Rates replaced the PDST Reference Rates which were
then calculated and published daily by PDEx. The PHP BVAL Reference Rate
dated 31 December 2021 - the valuation date, was used for this valuation
exercise (image shown below).
Equity Risk 3.9 We adopted the country risk premium estimated by the Organisation for
Premium Economic Co-operation and Development (OECD) at 3%. The Country Risk
Classification Method measure the country credit risk and is based on two
components: the Country Risk Assessment Model which produces a
qualitative assessment of the country credit risk based on the payment
experience of the participants, their economic and financial situation; and the
qualitative assessment of the Model which considers the political risk and
other risk factors. Shown below is an excerpt of said table.
Management & 3.10 The Management Risk refers to the estimated premium to compensate for
Liquidity Risk the burden of management, while the Liquidity Rate refers to the ease (or
the difficulty) with which an investment can be sold or made. A review was
done and we have arrived at the following: Management Risk was classified
into four categories, with the corresponding rates: Poor – 1.2; Average – 1.0;
Above Average - 0.90 and Excellent - 0.80 while Liquidity Risk has three (3)
categories: Poor –1.2; Average – 1.0; and Good – 0.90. After the said review,
we deemed it appropriate to use 0.80% for Management Risk and 0.90% for
Liquidity Risk.
Resulting 3.11 Resulting Discount Rate used for this valuation is 9.52%, or say, 9.5%.
Discount Rate
Capitalization Rate 3.12 A discount rate is used to calculate the present value of future projections of
a benefit stream when growth varies from year to year. However, if growth
is estimated to remain constant at throughout the life of the investment, a
capitalization rate is often used. In its most basic form, the relationship
between discount rate and capitalization rate can be summarized as follows:
Capitalization Rate = Discount Rate – Growth
For purposes of this valuation, a long-term growth rate of 4.5% has been
assumed, thus resulting to a Capitalization Rate of 5.0%.
Key Financial 3.13 We relied on the historical and projected assumptions brought about by our
Assumptions research and as provided by the Client. These financials were analysed to
ensure reasonableness by comparing projected revenue growth rates and
other operating expenses based on historical performance. Based on
interviews with the representatives of the company, projections were
prepared to reflect the current and expected future market conditions.
a. Revenues
Cashflow
i. projection starts in 2022 for a period of 10 years.
The
ii. revenues come from the rental of office units and retail units. In
estimating the annual rents of the subject units, we have adopted the
contract rents as appearing in the copy of the rent roll and lease contracts
provided to us by the Client for the occupied units. After the expiration of the
contract, we assume renewals for a period of 5 years.
Aside
iii. from the monthly rentals from leasable areas, revenues likewise include
CUSA Dues which are likewise charged to the tenants monthly on a per sq.m.
basis. These dues are for common and/ or shared utilities, facilities and services.
It iv.
would be important to note that as the building administrators, they collect
the said dues as a cost recovery mechanism for all expenses related to the
day-to-day operations of the building and its common areas.
Occupancy
v. assumptions were based on the actual performance of the
Property as well as the prevailing trend in the subject area taking into
consideration the forecasted effect of the global pandemic in the office
market. We have further assumed a vacancy allowance for the whole
cashflow period to account for unanticipated vacancies brought about by
early terminations and non-renewals, and rental concession requests from
tenants. Average vacancy allowance assumed in the cashflow is 10%
Wevi. used actual escalation rates indicated in the rent roll for all existing
leases up until their lease expires. After which, an average escalation of 5%
was then be applied year on year until the end of the cash flow.
b. Cost & Expenses
Operating
i. Costs and Expenses are assumed to be an average of
approximately 15% of the Total Net Revenues. Operating costs and
expenses included are basically divided in to two – direct operating expenses
and other operating expenses. Direct operating expenses include the
following: association dues (for non-occupied leasable spaces), real property
taxes (if applicable) and land lease payments. On the other hand, other
operating expenses include the following: PM & FM expenses, general and
admin expense and business taxes.
These percentage allocations were from the historical and projected

performance of the Property.
Annual
ii. Capital Expenditures (CAPEX) for the entire cashflow period, on the
other hand, was assumed to be 3% of the Net Leasing Revenues. CAPEX
are expenditures that would create future benefits to the Property/business.
It is usually incurred when the property owner spends to add value to the
existing fixed asset that would allow an extension of the asset’s life beyond
its normal useful years.
Resulting Market 3.14 a. Earnings Before Income Tax, Depreciation and Amortization (EBITDA) for
Value the whole duration of the cashflow shall be discounted at the derived
Discount Rate of 9.5%.
b. The sum of discounted cashflows of the Property represents the Market
Value of the Property.
The Discounted Cashflow showing the estimated Market Value of the Property
is attached as Appendix 6.
Valuation basis
Market Value 3.15 Market Value is defined in the 2019 International Valuation Standards as:
“The estimated amount for which an asset or liability should exchange on the
valuation date between a willing buyer and a willing seller in an arm’s length
transaction after proper marketing and where the parties had each acted
Valuation date
Valuation date 3.16 The valuation date is 31 December 2021.
General Assumptions
Assumptions 3.17 Our valuation is necessarily based on a number of assumptions which have been
drawn to your attention in our General Terms of Business, Letter of Engagement
and within this report.
Key Assumptions 3.18 Whilst we have not provided a summary of all these assumptions here, we would
in particular draw your attention to a key assumption that we relied on a very
considerable extent on the information provided by the Client and have assumed
that documents provided to us such as contract of lease, gross floor area
tabulation, floor plans, building tenancies and other relevant matters are factual.
We were also advised by the Client that no material facts have been omitted from
the information provided.
3.19 We have assumed that the title of the Property is clean and free of any liens and
encumbrances.
Special 3.20 As instructed by the Client, Parking Level is excluded in the valuation coverage.
Assumptions We have thus derived the Market Value of the Building using Income Approach
by excluding the revenues the parking generates.
3.21 In applying Income Approach to value, we have considerably relied on the

information provided to us by the Client which includes the following: lease
contracts, revenue and expense projections, historical and projected
occupancies. Upon expiration of contracts, we estimated the lease rates based
on the acceptable escalations in the market.
Revenue and expense items without adequate supporting documents were not
considered in the financial projections.
Market Value
3.22 Premised on the foregoing, we are of the opinion that the Market Value of the
Property, valued as of 31 December 2021, is:
PhP1,510,000,000 (ONE BILLION, FIVE HUNDRED TEN MILLION

PHILIPPINE PESOS).
Calculation 3.23 We attach a copy of our valuation calculations at Appendix 6.
Note: The outbreak of the Novel Coronavirus (COVID-19), declared by the World Health Organization as a “Global Pandemic”
on 11th March 2020, has impacted global financial markets. Travel restrictions have been implemented by many countries. In
the Philippines, market activity is being impacted in all sectors. As at the valuation date, we consider that we can attach less
weight to previous market evidence for comparison purposes, to inform opinions of value. Indeed, the current response to
COVID-19 means that we are faced with an unprecedented set of circumstances on which to base a judgement. Our valuation
is therefore reported on the basis of “material valuation uncertainty” per IVS 103 of the International Valuation Standards.
Consequently, less certainty – and a higher degree of caution – should be attached to our valuation than would normally be
the case. Given the unknown future impact that COVID-19 might have on the real estate market, we recommend that you
keep the valuation of this property under frequent review.
Value forwarded …………………………… PhP1,510,000,000
Signatures
For and on behalf of
SANTOS KNIGHT FRANK, INC.
__________________________________ ___________________________
JESUS CONSTANCE M. CASTRO, CPV® JACQUELINE T. GUERTA, CPV®
Director Director
Licensed Real Estate Appraiser Licensed Real Estate Appraiser
PRC Reg. No. 423 PRC Reg. No. 949
Date Issued and Validity: 04/14/2011 - 12/22/2022 Date Issued and Validity: 07/19/2011 - 05/04/2023
PTR No. 8883632 - 01/26/2022; Makati City PTR No. 8883629 - 01/26/2022; Makati City
TIN 185-543-916 TIN 901-308-499
Reviewed (but not undertaken by):
________________________________
WENCESLAO D. FUENTES, JR., CPV®
Director
Licensed Real Estate Appraiser
PRC Reg. No. 422
Date Issued and Validity: 08/20/2020 - 04/15/2023
PTR No. 8883634 - 01/26/2022; Makati City
TIN 117-704-257
Appendix 1 - Assumptions, Limiting Conditions and Disclaimers
Basis of Value Our valuation is made on the basis of Market Value which is defined under IVS 2019 as “the estimated amount for which an asset or liability should exchange
on the valuation date between a willing buyer and a willing seller in an arm’s-length transaction, after proper marketing and where the parties had each acted
In this definition, it is assumed that any transaction shall be based on cash or its equivalent consideration. Our valuation has been made on the assumption
that the owner sells the Property on the open market without the benefit of a deferred terms contract, leaseback, joint venture, management agreement or any
similar arrangement which would affect the value of the Property.
It is further assumed that title to the Property is good, marketable and free from liens and encumbrances, and that fee simple ownership is transferable.
The values shall be free and clear of all mortgages, without regard to VAT payments, gains taxes, transfer taxes, recording fees, etc. and expressed in the
local currency (PhP). No allowances are to be made for any disposal costs or liabilities, or for taxation upon sale.
Property Rights The rights appraised in this report are the property rights in fee simple, free and clear. "Fee simple" is defined as absolute ownership, without limitations to
appraised any particular class of heirs or restrictions, but subject to the limitations of eminent domain, escheat, police power and taxation.
We assume that the fee simple interest is marketable and in compliance with the applicable laws of the Philippines.
Fractional When the study contains a valuation relating to an estate in land that is less than the whole fee simple estate, the value reported for such estate relates to a
Interests: fractional interest only in the real estate involved, and the value of this fractional interest plus the value of all other fractional interests may or may not equal
the value of the entire fee simple estate which is considered the whole.
When the valuation report contains an allocation of the total valuation between land and building improvements, such allocation applies only under the existing
program of utilization. The separate valuations for land and building cannot be used in conjunction with any other valuation/appraisal and will be invalid if so
used.
Assumptions: The valuation is based on the condition of the economy and the purchasing power of the Philippine Peso as of the effective date of valuation.
We have assumed that the floor areas provided us have been calculated in accordance with engineering standards, and assumed herein to be true and
correct.
Any maps or plot plans reproduced and included in the report are intended only for the purpose of showing spatial relationship. They are not necessarily
measured surveys or measured maps, and we will not be responsible for topographic or surveying errors. The appraiser has made no survey of the Property.
No liability will be assumed for soil conditions, bearing capacity of the subsoil or for engineering matters related to proposed or existing structures.
Information Legal descriptions, including leases, information, maps, signed or unsigned surveys, estimates and opinions furnished or made available to the appraiser and
Supplied contained in this study were obtained from sources considered reliable and believed to be true and correct. However, no responsibility for accuracy and legality
By Others of such items furnished can be assumed by the appraiser.
Information provided by informed local sources, such as government agencies, financial institutions, Realtors, buyers, seller and others, was weighed in the
light in which it was supplied and checked by secondary means; however, no responsibility is assumed for possible misinformation.
Legal Issues: This valuation assumes no responsibility for the validity of legal matters affecting the Property. The ownership history reported in this valuation is based on
the appraiser’s research of public records, which are assumed to be accurate and complete. It is not the intent of the valuation to offer a legal opinion of title.
It is further assumed that the Property has good title, responsible ownership and competent management. Any liens or encumbrances which may now exist
have been disregarded.
The appraiser is not required to give testimony or attendance in court by reason of this valuation, with reference to the Property in question, unless
arrangements have been previously made.
Liability: The liability of Santos Knight Frank, Inc. and its directors and employees is limited to the addressee of this report only. No accountability, obligation or liability
to any third party is accepted. In the event we are subject to any liability in connection with this engagement, regardless of legal theory advanced, such liability
will be limited to the amount of fees we received for this engagement.
Environmental It is assumed that there is full compliance with all applicable Philippine environmental regulations and laws unless non-compliance is stated, defined, and
Conditions: considered in this appraisal report.
Town Planning: It is assumed that all applicable zoning and use regulations have been complied with, unless a nonconformity is stated, defined and considered in the study.
It is also assumed that all required licenses, certificates of occupancy, consents, or other legislative or administrative authority from the Philippine government
or private entity or organization have been or can be obtained or renewed for any use on which the value estimate contained in this study is based.
Condition of We have inspected the improvements and structures. However we have not carried out a structural survey nor tested any of the services or facilities, nor have
Improvements: we inspected unexposed or inaccessible portions of the building, and are therefore unable to state that these are free from defect, rot, infestation, asbestos or
other hazardous material. We have therefore, viewed the general state of repair of the Property and advise that we did not notice any obvious signs of structural
defect or dilapidations. Furthermore, the Property appears to be in reasonable condition having regard to its age and use and unless otherwise stated.
We also assume that the building complies with all relevant statutory requirements in respect of matters such as sanitary, building and fire safety regulations
and standards.
Valuation Santos Knight Frank uses any one or a combination of the Market Data Approach, the Cost Approach, and the Income Capitalization Approach. Each
Methodology: methodology begins with a set of assumptions. The result is the best estimate of value Santos Knight Frank can produce, but it is an estimate and not a
prediction or guarantee and it is fully dependent upon the accuracy of the assumptions as to income, expense and market conditions. These primary
methodologies use market derived assumptions, including rents, yields and discount rates, obtained from analyzed transactions. We do not represent
ourselves as experts for data, such as economic, demographic or construction costs, which has been obtained from external sources.
Others: This report and valuation shall be used only in its entirety and no part shall be used without the whole report. It may not be used for any purpose other than
the intended purpose mentioned herein. Possession of this report or any copy thereof does not carry with it the right of copying or publication. All copies will
originate from Santos Knight Frank, Inc. and will be signed and dated as such. Neither the whole nor any part of the report or any reference to our name, our
valuation and our report may be included in any document, circular or statement nor published without our prior written consent to the form and context in
which it may appear.
The delivery and acceptance of this report completes this assignment.
Valuation report │ │ Festive Walk 1B, Iloilo Business Park, Iloilo City │ 2022-03MV Appendices 1
Appendix 2 - Letter of Engagement
Valuation report │ │ Festive Walk 1B, Iloilo Business Park, Iloilo City │ 2022-03MV Appendices 2
Valuation report │ Festive Walk 1B, Iloilo Business Park, Iloilo City │ 2022-03MV Appendices 3
Appendix 3 - General Terms of Business
General Terms of Business for Valuation Services
These General Terms of Business (the “General Terms”) and our 2.2. Philippine courts shall have exclusive jurisdiction to settle any
Letter of Engagement (the “Letter”), together form the agreement dispute or claim (including non-contractual disputes or claims)
between you and us (the “Agreement”). References to “you”, “your” arising out of or in connection with this Agreement or its subject
etc. are to persons or entities who are our client and, without prejudice matter or formation or any Valuation. This will apply wherever the
to clauses 3 and 4 below, to any persons purporting to rely on our relevant property or the client, or any relevant third party, is located
Valuation. or the service is provided.
Unless the context otherwise requires, all other terms and expressions 3. Limitations on liability
used but not defined herein shall have the meaning ascribed to them in 3.1. Subject to clause 3.7, our maximum total liability in connection with
the Letter. or arising out of this Agreement and/or its subject matter and/or the
Valuation is limited to our total service fees as set out in the Letter.
When used herein or in the Letter, the term “Valuation” shall mean any
valuation report, advance report, supplementary report or 3.2. Subject to clause 3.7, we will not be liable for any loss of profits or
subsequent/update report, produced pursuant to our engagement and for indirect or consequential loss or damages.
any other replies or information we produce in respect of any such report
and/or any relevant property. Any words following the terms 3.3. Subject to clause 3.7, any limitation on our liability will apply
“including”, “in particular” or any similar expression shall be construed however such liability is or would otherwise have been incurred,
as illustrative and shall not limit the sense of the words preceding those whether in contract, tort (including negligence), for breach of
terms. statutory duty, or otherwise.
All of the terms set out in these General Terms shall survive termination 3.4. Except as set out in clauses 3.5 and 4.7 and 4.8 below, no third
of the Agreement. party shall have any right to enforce any of the terms of this
Agreement.
1. Santos Knight Frank, Inc.
1.1. Santos Knight Frank, Inc. (“Santos Knight Frank”, “our”, “us”, 3.5. No claim arising out of or in connection with this Agreement may be
“we”) is a Philippine corporation with Securities and Exchange brought against any Santos Knight Frank Person. Those
Commission (SEC) Registration Number A199818549. individuals will not have a personal duty of care to you or any other
person and any such claim for losses must be brought against
1.2. Our registered office is at 10/F Ayala Tower & Exchange Plaza, Santos Knight Frank, Inc. Any Santos Knight Frank Person may
Ayala Avenue, Makati City where a list of members may be enforce this clause but the terms of this Agreement may be varied
inspected. by agreement between the client and Santos Knight Frank, Inc. at
any time without the need for any Santos Knight Frank Person to
1.3. Any representative of Santos Knight Frank, Inc. described as consent.
Director is either a member or an employee of Santos Knight Frank,
Inc. and is not a member of the Board of Directors. The term 3.6. No claim, action or proceedings arising out of or in connection with
Director has been retained because it is an accepted way of the Agreement and/or any Valuation shall be commenced against
referring to senior professionals. The term “Santos Knight Frank us after the expiry of the earlier of (a) two years from the Valuation
Person” shall, when used herein, mean any member, employee, or Date (as set out in the relevant Valuation) or (b) any limitation period
consultant of Santos Knight Frank, Inc. prescribed by law.
1.4. Our Tax Identification Number (TIN) is 201-626-570-000. 3.7. Whether or not specifically qualified by reference to this clause,
nothing in the Agreement shall exclude or limit our liability in respect
1.5. The details of our professional indemnity insurance will be provided of fraud, or for death or personal injury caused by our negligence or
to you on request. negligence of those for whom we are responsible, or for any other
liability to the extent that such liability may not be so excluded or
1.6. Santos Knight Frank, Inc., being a corporation, is regulated by the limited as a matter of applicable law.
Philippine Securities and Exchange Commission (SEC). It is also
an SEC-accredited asset valuer. In accordance with reportorial 4. Purpose, reliance and disclosure
filings with the SEC, it may be necessary to disclose valuation files 4.1. The Valuation is prepared and provided solely for the stated
to them. By instructing us, you give us your permission to do so. purposes. Unless expressly agreed by us in writing, it cannot be
Where possible we will give you prior notice before making any relied upon, and must not be used, for any other purpose and,
such disclosure, although, this may not always be possible. We will subject to clause 3.7, we will not be liable for any such use.
use reasonable endeavours to limit the scope of any such
disclosure and to ensure any disclosed documents are kept 4.2. Without prejudice to clause 4.1 above, the Valuation may only be
confidential. relied on by our Client. Unless expressly agreed by us in writing the
Valuation may not be relied on by any third party and we will not be
1.7. Valuations will be carried out in accordance with the 2019 edition of liable for any such purported reliance.
the International Valuation Standards (IVS) by valuers who conform
to its requirements and with regard to relevant statutes or 4.3. Subject to clause 4.4 below and for the stated purposes, the
regulations. Our senior valuers are Real Estate Appraisers licensed Valuation is confidential to our Client and must not be disclosed, in
and regulated by the Philippine Professional Regulation whole or in part, to any third party without our express written
Commission (PRC). consent (to be granted or withheld in our absolute discretion). No
liability is accepted to any third party for the whole or any part of any
2. Governing law and jurisdiction Valuation disclosed in breach of this clause.
2.1. The Agreement and any dispute or claim (including non-contractual
disputes or claims) arising out of or in connection with it or its subject 4.4. Our appraisers are not required to give testimony or attendance in
matter or formation or any Valuation shall be governed by and court by reason of this Valuation with reference to the property in
construed in accordance with Philippine laws. question, unless arrangements have been previously made.
4.5. Except for the stated purposes, neither the whole nor any part of the 7. Entire agreement
Valuation and/or any reference thereto may be included in any 7.1. The Agreement, together with any Valuation produced pursuant to
published document, circular or statement nor published in any way it (the Agreement and such documents together, the “Contractual
whatsoever whether in hard copy or electronically (including on any Documents”) constitute the entire agreement between you and us
website) without our prior written consent and approval of the form and supersedes and extinguishes all previous agreements,
and context in which it may appear. promises, assurances, warranties, representations and
understandings between you and us, whether written or oral,
4.6. Where permission is given for the publication of a Valuation, neither relating to its subject matter.
the whole nor any part thereof, nor any reference thereto, may be
used in any publication or transaction that may have the effect of 7.2. Subject to clause 3.7 above, you agree that in entering into the
exposing us to liability for actual or alleged violations of SEC Agreement you do not rely on, and shall have no remedies in
Memorandum Circular No. 2, series of 2014 (Guidelines on Asset respect of, any statement, representation, assurance or warranty
Valuations) or Republic Act No. 8799 (Securities Regulation Code), (whether made innocently or negligently) that is not expressly set
as amended and its Implementing Rules and Regulations. out in the Contractual Documents. You further agree that you shall
have no claim for innocent or negligent misrepresentation based on
4.7. You agree that we, and/or any Santos Knight Frank Person, may any statement set out in the Contractual Documents.
be irreparably harmed by any breach of the terms of this clause 4
and that damages may not be an adequate remedy. Accordingly, 7.3. The Letter and these General Terms shall apply to and be
you agree that we and/or any Santos Knight Frank Person may be incorporated in the contract between us and will prevail over any
entitled to the remedies of injunction or specific performance, or any inconsistent terms or conditions contained or referred to in your
other equitable relief, for any anticipated or actual breach of this communications or publications or which would otherwise be
clause 4. implied. Your standard terms and conditions (if any) shall not
govern or be incorporated into the contract between us.
4.8. You agree to indemnify and keep fully indemnified us, and each
relevant Santos Knight Frank Person, from and against all liabilities, 7.4. Subject to clause 3.7 and clause 6, no addition to, variation of,
claims, costs (including legal and professional costs), expenses, exclusion or attempted exclusion of any of the terms of the
damages and losses arising from or in connection with any breach Contractual Documents will be valid or binding unless recorded in
of this clause 4 and/or from the actions or omissions of any person writing and signed by duly authorised representatives on behalf of
to whom you have disclosed (or otherwise caused to be made the parties.
available) our Valuation otherwise than in accordance with this
clause 4. 8. Assignment
8.1. You shall not assign, transfer, mortgage, charge, subcontract,
5. Knight Frank network declare a trust over or deal in any other manner with any of the rights
5.1. Santos Knight Frank, Inc. is a member of an international network and obligations under the Agreement without our prior written
of independent firms which may use the “Knight Frank” name consent (such consent to be granted or withheld in our absolute
and/or logos as part of their business name and operate in discretion).
jurisdictions outside the Philippines (each such firm, an
“Associated Knight Frank Entity”). 9. Force majeure
9.1. Neither party shall be in breach of this Agreement nor liable for delay
5.2. Unless specifically agreed otherwise, in writing, between you and in performing, or failure to perform, any of its obligations under this
us: (i) no Associated Knight Frank Entity is our agent or has Agreement if such delay or failure results from events,
authority to enter into any legal relations and/or binding contracts on circumstances or causeswhich could not be foreseen, or which,
our behalf; and (ii) we will not supervise, monitor or be liable for any though foreseen, were inevitable.
Associated Knight Frank Entity or for the work or actions or
omissions of any Associated Knight Frank Entity, irrespective of 10. Our fees
whether we introduced the Associated Knight Frank Entity to you. 10.1.Without prejudice to clause 10.3 below, you become liable to pay
our fees upon issuance of the Valuation. For the avoidance of
5.3. You are responsible for entering into your own agreement with any doubt, unless expressly agreed otherwise in writing, the payment of
relevant Associated Knight Frank Entity. our fees is not conditional on any other events or conditions
precedent.
5.4. This document has been originally prepared in the English
language. If this document has been translated and to the extent 10.2.If any invoice remains unpaid after 30 days of the date on which it
there is any ambiguity between the English language version of this is presented, we reserve the right to charge interest, calculated
document and any translation thereof, the English language version daily, from the date when payment was due until payment is made
as prepared by us shall take precedence. at 3%
6. Severance 10.3.If we should find it necessary to use legal representatives or

If any provision of the Agreement is invalid, illegal or unenforceable, collection agents to recover monies due, you will be required to pay
the parties shall negotiate in good faith to amend such provision so all costs and disbursements so incurred.
that, as amended, it is legal, valid and enforceable and, to the
greatest extent possible, achieves the intended commercial result 10.4.If an appraisal analysis is ordered and the assignment is cancelled
of the original provision. If express agreement regarding the before completion, we reserve the right to receive compensation,
modification or meaning or any provision affected by this clause is by way of damages, in an amount equal to 70% of the total fee for
not reached, the provision shall be deemed modified to the the assignment.
minimum extent necessary to make it valid, legal and enforceable.
If such modification is not possible, the relevant provision shall be 10.5.If you delay the instruction by more than 30 days or materially alter
deemed deleted. Any modification to or deletion of a provision the instruction so that additional work is required at any stage or if
under this clause shall not affect the validity and enforceability of the we are instructed to carry out additional work that we consider (in
rest of this Agreement. our reasonable opinion) to be either beyond the scope of providing
the Valuation or to have been requested after we have finalised our
Valuation (including, but not limited to, commenting on reports on
title), we will charge additional fees for this work. Such additional 18. Boundaries
fees will be calculated on the basis of a proportion of the total fee by Any maps or plot plans reproduced and included in the report are
reference to reasonable time and expenses incurred. intended only for the purpose of showing spatial relationship. They
are not necessarily measured surveys or measured maps, and we
10.6.Where we agree to accept payment of our fees from a third party, will not be responsible for topographic or surveying errors. The
such fees remain due from you until payment is received by us. appraiser has made no survey of the property. No liability will be
assumed for soil conditions, bearing capacity of the subsoil or for
11. Anti-bribery and corruption and Anti-Money Laundering engineering matters related to proposed or existing structures.
We agree that throughout the term of our appointment we shall:
19. Planning, highway and other statutory regulations
(a) comply with all applicable laws, statutes, regulations, and codes 19.1.Enquiries of the relevant planning and highways authorities in
relating to anti-bribery and corruption and Anti-Money respect to matters affecting properties, where considered
Laundering laws (the “Relevant Requirements”); appropriate, are normally only obtained from the corresponding
government agency. We can only state whatever current conditions
(b) not engage in any activity, practice or conduct which would may be. We recommend that formal written enquiries should be
constitute an offense; undertaken by your lawyers who should also confirm the position
with regard to any legal matters referred to in our Valuations.
(c) maintain anti-bribery, anti-corruption, and anti-money
laundering policies to comply with the Relevant Requirements 19.2.It is assumed that all applicable zoning and use regulations have
and any best practice relating thereto; and been complied with, unless a nonconformity is stated, defined and
considered in the study. It is also assumed that all required licenses,
(d) promptly report to you any request or demand for any undue
certificates of occupancy, consents, or other legislative, regulatory,
financial or other advantage of any kind in connection with the
or administrative authority from the Philippine government or private
performance of our services to you.
entity or organization have been or can be obtained or renewed for
12. Portfolios any use on which the value estimate contained in this study is
Properties comprising a portfolio, unless specifically agreed with based.
you otherwise, will be valued separately and upon the assumption
19.3.We assume that the premises comply with all relevant statutory
that the properties have been marketed individually and in an
requirements including environmental, building, fire, and sanitation
orderly manner.
regulations.
13. Land Register inspection and searches
20. Property insurance
We are not required to undertake searches, validations or
Our Valuation assumes that each property would, in all respects, be
inspections of any kind for title or price paid information in any
insurable against all identifiable risks.
publicly available land registry.
21. Building areas and age
14. Title and burdens
Where so instructed, areas provided from a quoted source will be
We will assume, unless specifically informed and stated otherwise,
relied upon. Any dimensions and areas measured on location or
that each property has good and marketable title and that all
from plan/s are calculated and are quoted to a reasonable
documentation is satisfactorily drawn and that there are no unusual
approximation, with reference to their source. Where the age of the
outgoings, planning proposals, onerous restrictions or local
building is estimated, this is for guidance only.
authority intentions which affect the property, nor any material
litigation pending. 22. Structural condition
Building, structural and ground condition surveys are detailed
15. Disposal costs and liabilities
investigations of the building, the structure, technical services and
No allowance is made in our Valuation for expenses of realisation
ground and soil conditions undertaken by specialist building
or for taxation which may arise in the event of a disposal and our
surveyors or engineers and fall outside the normal scope of a
Valuation is expressed as exclusive of any VAT that may become
valuation. Since we will not have carried out any of these
chargeable. Properties are valued disregarding any mortgages or
investigations, we are unable to report that any property is free of
other charges, including commissions.
any structural fault, rot, infestation or defects of any other nature,
16. Sources of information including inherent weaknesses due to the use in construction of
We rely upon the information provided to us by you, as to details of deleterious materials. We do reflect the contents of any building
tenure and tenancies, planning consents and other relevant survey report provided to us in advance, or any defects or items of
matters, as summarised in our Valuations. Legal descriptions, disrepair of which we are advised or which we note during the
including leases, information, maps, signed or unsigned surveys, course of our ocular inspections but otherwise assume properties
estimates and opinions furnished or made available to the appraiser to be free from defect.
and contained in this study were obtained from sources considered
23. Ground conditions
reliable and believed to be true and correct. However, no
Unless informed otherwise in writing, we assume there to be no
responsibility for accuracy and legality of such items furnished can
adverse ground or soil conditions and that the load bearing qualities
be assumed by the appraiser.
of the sites of each property are sufficient to support the building
17. Identity of property to be valued constructed or to be constructed thereon.
We will exercise reasonable care and skill (but will not have an
24. Environmental issues
absolute obligation to you) to ensure that the property, identified by
24.1.Investigations into environmental matters by suitably qualified
the property address in your instructions, is the property inspected
environmental specialists would usually be commissioned by most
by us and contained within our valuation report. If there is ambiguity
responsible purchasers or chargees of higher value properties or
as to the property address, or the extent of the property to be valued,
where there was any reason to suspect contamination or a potential
this should be drawn to our attention in your instructions or
future liability. Furthermore, such investigation would be pursued to
immediately upon receipt of our report.
the point at which any inherent risk was identified and quantified
before a purchase proceeded. Where we are provided with the
conclusive results of such investigations, on which we are instructed
to rely, these will be reflected in our Valuations with reference to the 28. Build cost information
source and nature of the enquiries. We would endeavour to point In the provision of valuation services we do not hold ourselves out
out any obvious indications or occurrences known to us of harmful to have expertise in assessing build costs. Where our instruction
contamination encountered during the course of our valuation requires us to have regard to build cost information, for example in
enquiries. the valuation of properties with development potential, we strongly
recommend that you supply us with build cost and other relevant
24.2.However, we are not environmental specialists and therefore we do information prepared by a suitably qualified construction cost
not carry out any scientific investigations of sites or buildings to professional, such as a quantity surveyor. The Valuation will be
establish the existence or otherwise of any environmental stated to have been arrived at in reliance upon the build cost
contamination, nor do we undertake searches of public archives to information supplied to us by you. In the absence of any build cost
seek evidence of past activities which might identify potential for information supplied to us, we may have regard to published build
contamination or any other environmental searches. If we are not cost information. Build costs produced using this approach must be
provided with the results of appropriate investigations as outlined assumed to be unreliable or inaccurate; any reliance which can be
above and where there is no obvious indication of harmful placed upon our Valuation in these circumstances is severely
contamination, our Valuation will be provided on the assumption restricted. Specialist professional advice on the build costs should
that the relevant property is unaffected. Where we are informed that be sought by you. If you subsequently obtain specialist build cost
contamination is suspected or confirmed, but adequate advice, we recommend that we are instructed to review our
investigation has not been carried out and made available to us, Valuation.
then the Valuation will be qualified only by reference to it.
29. Reinstatement assessments
25. Minerals, timber, airspace etc. A reinstatement assessment for insurance purposes is a specialist
Unless specifically agreed otherwise in writing and so stated within service and we recommend that separate instructions are issued
the main body of the relevant Valuation, we do not value or attempt for this specific purpose. If an indication is required as a check
to value or take into account any potential income stream or other against the adequacy of existing cover this should be requested and
beneficial or detrimental effect or other factor relating to will be so stated in the body of the relevant Valuation. Any indication
undiscovered or unquantified mineral deposits, timber, airspace, given is provided for guidance only and must not be relied upon as
sub-ground space or any other matter which would not be openly the basis for insurance cover. In any event, our reinstatement
known in the market and considered to have value. assessment should be compared with the owner’s and if there is a
material difference, then a full reinstatement valuation should be
26. Legal advice reconsidered.
26.1.We are appointed to provide valuation opinion(s) in accordance with
our professional duties as Appraisers. The scope of our service is 30. Comparable evidence
limited accordingly. The valuation assumes no responsibility for the Where comparable evidence information is included in our
validity of legal matters affecting the property. It is not the intent of Valuation, this information is often based upon our oral enquiries
the valuation to offer a legal opinion of title. Any liens or and its accuracy cannot always be assured, or may be subject to
encumbrances which may now exist have been disregarded. We undertakings as to confidentiality. However, such information
are not qualified legal practitioners and we do not provide legal would only be referred to where we had reason to believe it or where
advice and any statements made by us, or advice given, in a legal it was in accordance with our expectation. In addition, we have not
context should be construed accordingly. inspected comparable properties.
26.2.Where appropriate we will liaise with your legal advisors. However, 31. Valuation bases
we accept no responsibility for any work carried out by them and we Valuations are carried out on a basis appropriate to the purpose for
will not be liable for anything contained in legal documentation which they are intended and in accordance with the relevant
prepared by them. definitions, commentary and assumptions. The basis of valuation
will be agreed with you and specified in the Letter and in the relevant
26.3.Where we consider it is necessary for the provision of the Valuation Valuation.
and/or specifically agree to do so, and any additional fees we
require for this work are agreed, we will read legal documents Important Notice
(including leases, licences etc.), however, (save for any comment
concerning the impact of our interpretation of such documents on If you have any queries relating to this Agreement please let us
value) our interpretation of such documents cannot be relied upon know as soon as possible, and in any event before signing the
to be legally correct. Where we do interpret legal documents, we Letter and/or giving us instructions to proceed.
will, for the purposes of providing our Valuation, assume our
interpretation to be correct. Your instructions to proceed, preferably signing on the space
provided for under the Letter, will constitute your acceptance to
27. Loan security use our services on the terms of the Agreement.
Where instructed to comment on the suitability of property as a loan
security we are only able to comment on any inherent property risk. Accordingly, our commencement of work pursuant to your
Determination of the degree and adequacy of capital and income instructions shall constitute acceptance of your offer and as
cover for loans is the responsibility of the lender having regard to such establish the contract between us on the terms of the
the terms of the loan. Agreement.
Appendix 4 - Master Development Plan
SITE
SITE
Appendix 5 - Photographs
Machinery and Equipment
Pictures provided by the Client
Appendix 6 - Valuation Calculation (Income Approach - DCF)
PROFESSIONAL PROFILE
Bong D. Fuentes, Jr. is a Director of Santos Knight Frank, Inc. under

the Valuations Group. His major functions include scheduling,
monitoring, and overseeing the various engagements of the Group,
and also supervises the valuation pertaining to Plant and Machinery.
He also has parallel involvement in Real Property appraisal, being a
Licensed Real Estate Appraiser. Other responsibilities include
business development for corporate and financial institution
accounts.
Prior to joining Santos Knight Frank, Inc., Bong was involved with
other appraisal companies like Sallmanns Phil., Inc. and Asian
WENCESLAO D. FUENTES, JR.
Appraisal Company, Inc. where he started his appraisal career. He
Director
was also involved with financial institutions like Bank of the Philippine
Islands (BPI) and the former Far East Bank & Trust Company. His
T: +632 7752 2580 experience in his field spans a period of almost twenty-one (21)
F: +632 7752 2571 years, and he has handled appraisal/valuation studies for all types of
Plant and Machinery and Real Property Valuation in the Philippines.
[email protected]
His experience in the valuation of Plant Machinery include
assignments in the People’s Republic of China (PROC), Hong Kong,
United Arab of Emirates, Malaysia and Thailand.
• Member, Philippine Society of Mechanical Engineers-Manila

Chapter

• Member, Philippine Association of Realty Appraisers


• Mechanical Engineer, PRC Registration No. 34962


• Real Estate Appraiser, PRC Registration No. 422


• Bachelor of Science in Mechanical Engineering, Polytechnic

University of the Philippines
Jesus Constance M. Castro is a Director of Santos Knight Frank

under the Valuations Group. Being a Licensed Real Estate
Appraiser, he helps handle and supervise the Real Estate Appraisers
of the Company, and helps formulate valuation policies and
procedures in the department.
Prior to joining Santos Knight Frank, Mr. Castro was involved with
General Appraisal Company (Phils.), Inc.. He started there as staff
appraiser sometime in 1995. Through the years, he has gained vast
experience in real estate valuation and attended several appraisal
JESUS CONSTANCE M. CASTRO
seminars enhancing his professional advancement. He held the
Director position of Vice President – Real Estate Division at the time of his
resignation with General Appraisal Company (Phils.), Inc.. During his
T 632.752.2580
more than 20 years experience in his field, he has been involved in
property valuation projects concerning different types of real estate
F 632.752. 2571
properties as well as different industries such as semi-conductors,
[email protected]
power generation, textile and garments, steel, mining, cement,
transportation, food and beverages and telecommunications and had
likewise gained expansive experience in personnel management and
development of client relations. He is now currently expanding his
expertise by being involved in business valuation, as well as light
machinery and equipment valuation.
• Member, Philippine Institute of Civil Engineers (PICE)

• Member, Phil. Association of Realty Appraisers, Inc. (PARA)
• Real Estate Appraiser PRC Registration No. 423
• Licensed Civil Engineer PRC Registration No. 73151
• Bachelor of Science in Civil Engineering, University of Sto.
Tomas
Jacqueline T. Guerta is a Director of Santos Knight Frank, Inc. under

the Valuations Group. She is mainly responsible for handling
intangible/business valuation instructions which also include valuing
shares of stock, goodwill, and the like, as well as valuing real estate
assets, being also a Licensed Real Estate Appraiser.
Prior to joining Santos Knight Frank, Inc., Ms. Guerta was involved
with Colliers International Philippines, Inc. as a Valuation Manager.
She primarily handled real estate and business valuation instructions
for both local and international companies. She started her 20 year
JACQUELINE T. GUERTA career in real estate as a Research Analyst for Cuervo Far East, Inc.
Director While with Cuervo, she handled research and consulting
requirements for the company’s valued clients.
T: +632 7752 2580

• Member, Phil. Association of Realty Appraisers, Inc. (PARA)
F: +632 7752 2571
• PRC Registration No. 949
[email protected]
• Certificate in Real Estate Investment Finance, Asia Pacific Real
Estate Association (APREA) Institute
• Masters in Business Administration, Ateneo de Manila
Graduate School of Business
• Bachelor of Arts in Social Sciences, Ateneo de Manila University
Marvin A. Santos is one of the Appraisers under the Valuations Group

of Santos Knight Frank, Inc., responsible for handling Real Estate
Valuation assignments of the Company.
Prior to joining Santos Knight Frank, Inc., Mr. Santos was involved with
Asian Appraisal Company Inc. He started there as Assistant Appraiser
then got promoted after six (6) months as full time Staff Appraiser in
January 2018. During his four (4) years experience in his field, he has
gained immense experience in real estate valuation porject concerning
all types of real estate properties including residential properties,
commercial estate, farm estate, industrial estate and light
MARVIN A. SANTOS transportation and equipment. He is now currently expanding his
expertise and had likewise gained an expansive experience in
APPRAISER personnel management and development of client relations.
T: +632 7752 2580 • Bachelor of Science in Civil Engineering, Technological Institute of

F: +632 7752 2571 the Philippines - Manila
[email protected]

Valuation Report - MREIT INC. Festive Walk 1B Towers 1 2 FINAL SIGNED

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Valuation Report - MREIT INC. Festive Walk 1B Towers 1 2 FINAL SIGNED

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Prepared for:

As of: 31 December 2021

Attention: MR. KEVIN ANDREW L. TAN

Area for Land 5,991 sq.m.

Gross Floor Area 19,416.75 Gross Leasable Area 14,702.71

Ave. Lease Rate PhP576/ sq.m/ month

CLIENT MREIT, INC.

Tenure Building and building machinery & equipment - Freehold

MARKET VALUE PhP1,510,000,000

Valuation date 31 December 2021

Date of Issue 18 March 2022

1.7 We are acting as external and independent valuers in this engagement.

Scope of enquiries & investigations

In this definition, it is assumed that any transaction shall be based on cash or

Valuation date 1.21 The valuation date is 31 December 2021.

The Property is situated about 80 meters southeast from Megaworld Boulevard,

Note: Image courtesy of Google Maps.

• The land lease period shall commence upon the issuance of

Based on other information provided by the Client, below are additional

• Rent payment commencement date is on July 1, 2023;

Architectural details and/or finishes of the building consist of

The building is provided with mechanical and electrical services such

2.14 Machinery and/or equipment were disclosed to us as complete units i.e.,

Roadways and Access

As appearing in images from Google Maps, Festive Walk Road is about 12

Highest and Best Use

Outside Views of Festive Walk 1B (Pictures provided by the Client)

Interior Views of Festive Walk 1B (Pictures provided by the Client)

2.29 Other photographs of the Property are attached at Appendix 5.

3.5 The valuation process, briefly stated, consists of the following:

Risk Free Rate (10Y) 4.82% As of 31 December 2021, BVAL PDEX

Capitalization Rate = Discount Rate – Growth

b. Cost & Expenses

These percentage allocations were from the historical and projected

3.21 In applying Income Approach to value, we have considerably relied on the

PhP1,510,000,000 (ONE BILLION, FIVE HUNDRED TEN MILLION

Calculation 3.23 We attach a copy of our valuation calculations at Appendix 6.

Reviewed (but not undertaken by):

The delivery and acceptance of this report completes this assignment.

6. Severance 10.3.If we should find it necessary to use legal representatives or

Pictures provided by the Client

Bong D. Fuentes, Jr. is a Director of Santos Knight Frank, Inc. under

• Member, Philippine Society of Mechanical Engineers-Manila

• Member, Philippine Association of Realty Appraisers

• Mechanical Engineer, PRC Registration No. 34962

• Real Estate Appraiser, PRC Registration No. 422

• Bachelor of Science in Mechanical Engineering, Polytechnic

Jesus Constance M. Castro is a Director of Santos Knight Frank

• Member, Philippine Institute of Civil Engineers (PICE)

Jacqueline T. Guerta is a Director of Santos Knight Frank, Inc. under

T: +632 7752 2580

Marvin A. Santos is one of the Appraisers under the Valuations Group

T: +632 7752 2580 • Bachelor of Science in Civil Engineering, Technological Institute of

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