Rezoning and revitalizing Makati CBD

The Makati central business district (CBD) continues to enjoy its stature as the Philippines’ primary financial district. Major outsourcing, multinational, and large Filipino companies gravitate towards the country’s premier financial hub. This has been compelling national developers to expand in the business district despite the obvious lack of developable land in the business hub.

What’s interesting is that there are proposals to amend the zoning ordinance of Makati CBD. Among the Makati Central Estate Association, Inc.’s (MACEA) proposed changes include increasing the allowable floor area ratios (FAR) for office and retail developments. All lots will now be mixed-use. The new zoning ordinance also establishes the “superblocks” system, and a bonus FAR of 1.5 for lot owners that will incorporate breezeways and civic plazas into their developments.

Meanwhile, the Makati local government, major developers, and other stakeholders should also take into account the viability of expanding retail spaces; the city’s sustainability initiatives — given the popularity of healthy and sustainable workspaces; and the efficiency of mass transit systems (especially now that the construction of Makati subway has stalled) and parking spaces across the business district.

TAKING ADVANTAGE OF MAKATI CBD’S DWINDLING AVAILABLE OFFICE SUPPLY

From 2025 to 2029, Colliers projects the delivery of nearly 2 million square meters of new office space in Metro Manila, with Makati CBD accounting for 15% of the new supply. Among the new office towers likely to be completed during the period are Calistoga Office Building, Mckinley Exchange Corporate Center 2, PHC Buendia, The Gentry Corporate Plaza and the redevelopments of BDO, BPI, Metrobank and Chinabank HQs.

Assuming current market conditions continue, Colliers projects that Makati CBD may shift to a landlord’s market as early as next year, due to limited new supply over the next two years. While several major banks are developing new headquarters in the CBD, most of these are expected to be completed by 2029 onwards. The duration of a potential landlord’s market may be protracted unless a substantial portion of space in these HQs is made available for lease to the market.

With office availability dwindling and many existing buildings aging, redevelopment is becoming increasingly imperative to meet evolving demands. Colliers sees the MACEA’s proposed zoning amendments as a key catalyst in driving the redevelopment of the Makati CBD. These proposed changes include increasing the allowable FAR for office developments in Legazpi and Salcedo Villages, as well as permitting mixed-use developments along major thoroughfares. Colliers recommends incentivizing redevelopment projects — particularly those that integrate sustainability — as a critical step in future-proofing the CBD.

NEW CONDOMINIUMS LIKELY TO REPLACE OLD BUILDINGS

From 2025 to 2029, Colliers expects the completion of 20,700 condominium units in Metro Manila, with Makati CBD likely accounting for 12% of the new supply. Majority of these are luxury projects including Arthaland’s Eluria, Alveo Land’s Parkford Suites, and SMDC and Federal Land’s The Estate. Due to the lack of developable land in Makati CBD, property firms have been redeveloping old and existing properties into new residential projects. For instance, Ayala Land Premier redeveloped the Mandarin Oriental Hotel and LeParc Apartments into Park Central Towers and Park Villas respectively. Meanwhile, the Dela Rosa Carpark 2 will be converted into an ultra-luxury project called Laurean.

The proposed Condominium Redevelopment Act, a measure that was seen to complement new office and retail projects in Makati CBD failed to hurdle the last Congress. The bill is likely to be refiled in the next Congress which starts in July. We see Makati CBD benefiting from the measure’s enactment.

Makati CBD’s residential segment remains a cut above the rest. Its share to total unsold ready-for-occupancy (RFO) condominium units is only less than two percent of total unsold RFO across Metro Manila. Secondary and pre-selling condominium projects within Makati CBD are among the more expensive in the metro, especially those along Ayala Avenue and those located in Legaspi and Salcedo villages.

With the proposed rezoning and new projects in the pipeline, Makati CBD is definitely a hub to watch for in the years to come.

Source: Business World

Makati City lowers real property tax rates

Makati City has taken a bold step to provide economic relief and boost investment growth as Mayor Abby Binay signed a landmark ordinance significantly reducing real property tax (RPT) rates in all property classes.

Binay approved City Ordinance No. 2025-047 on March 24, 2025, amending key provisions of the Revised Makati Revenue Code.

The ordinance lowers the RPT rates for residential, commercial, industrial, and special properties, marking one of the most progressive tax reforms in the city's history.

Under the new ordinance, residential properties will now be taxed at 1.0 percent, down from 1.5 percent; tax for commercial properties will be reduced from 2.0 percent to 1.5 percent, while industrial properties will remain at 1.5 percent. Special properties get the most significant cut, dropping from 1.5 percent to 0.5 percent. Moreover, the additional tax rate for residential and commercial properties has been halved from 0.25 percent to 0.125 percent, making property ownership and business operations more affordable.

The ordinance also slashes assessment levels, the basis for computing assessed property values. Residential property assessment levels have seen significant reductions. R-1 properties have been adjusted from 12 percent to 0.65 percent, R-2 properties from 12 percent to 0.30 percent, and R-3 properties from 12 percent to 0.25 percent.

For commercial and industrial properties, assessment levels have also been reduced from 40 percent to more competitive rates. Commercial classifications C-1, C-2, and C-3 now range between 2.0 percent and 0.60 percent, while industrial classifications I-1, I-2, and I-3 follow the same range. Special class properties remain at 0.70 percent in commercial and industrial zones and 0.30 percent in residential areas.

The mayor assured stakeholders that despite the anticipated short-term revenue dip, Makati's financial health remains robust.

The city's budgetary flexibility has been bolstered by an estimated P7.9 billion annual savings following the transfer of 10 Embo villages to Taguig, which previously required significant subsidies. She emphasized that the long-term benefits far outweigh the expected short-term revenue adjustments. This move reinforces Makati's commitment to a fair, efficient, and transparent tax system that benefits both businesses and residents.

To further incentivize compliance, the ordinance allows property owners who have already paid their RPT for 2025 to receive a tax credit equivalent to any excess payments, which can be applied to future tax dues.

Binay said Makati's latest tax reform is more than just a fiscal policy shift. It is a strategic move to attract more investments, encourage property development, and sustain economic momentum.

She said that by prioritizing equitable taxation and financial prudence, the city cements its reputation as a premier business hub and a model for smart governance.

Source: Manila Times

City street life

The Makati central business district (CBD) is not only expressed by its glitzy skyscrapers and shopping malls. To a large extent, it is a realm defined by the fine-grained fabric of activities happening on the ground.

In the late ’80s, Makati CBD epitomized the planning paradigm of single-use zoning, which was adopted from the United States. This planning approach required rigid segregation of uses, separating homes from businesses and shopping. Ayala Avenue was patterned after Wall Street, an address exclusively for offices, catering to the largest corporations in the country.

Makati was thus a prestigious location and working in the CBD was a sign of individual achievement. There was one problem though: the CBD was a ghost town after hours, devoid of people and activities at night and on weekends.

Fast forward to the present, the streets of the CBD are now bustling with food outlets, coffee shops, restaurants, and places to hang out. This was all part of the evolution of the city, but I believe there were three important events that enabled the transformation.

Densification

Makati CBD’s old restrictions encouraged multi-story structures but capped the heights to 12 floors in some streets.

The concept of floor area ratio (FAR) was introduced in the early ’90s which allowed lot owners to build as high as the airport authorities would allow if the structures were within the prescribed FAR.

When restrictions on maximum building heights were amended, developers were able to respond to increasing land values and demand for space in the CBD. This development not only saw the first tall structures being built in the CBD, but also increased the total population per hectare it served, which in turn fueled the demand for downtown conveniences and services.

Market acceptance of high-rise living

It took a while for condominium living to take hold in the Philippines.

There was initial resistance to high-rise living and some hesitance to the concept of property ownership under a Condominium Certificate of Title (what is owned is actually the airspace inside an enclosed unit) instead of the more traditional Transfer Certificate of Title (one has ownership of the land and the space above and below it).

The eventual mainstream acceptance of condominium living was a big conceptual leap for the market. For the CBD, it meant higher resident population, which translated to higher demand for services and outlets such as convenience stores, groceries, eateries, salons, and the like.

Retail liberalization

Previous single-use restrictions explicitly prohibited retail and restaurants at the ground floor of the buildings.

In line with the prevailing paradigm of segregation and exclusion, all shopping, dining, and entertainment activities were concentrated in the shopping center (then called Makati Commercial Center), allowing for the monopolization of commercial rents, and resulting in reduced vitality for the rest of the business district. Some enterprising building owners circumvented this restriction by putting food outlets in a partial basement, half a floor below the street level.

Today’s urban townships integrate retail to activate streets

The eventual relaxation of the restriction allowed a percentage of the buildings’ gross floor area to be used for retail and food outlets–hence, the current situation where we see lively cafes and restaurants along the streets of the CBD.

Economic vitality

All in all, the combination of intensification, densification, and liberalization led to a more even and varied distribution of economic activity and vitality within the CBD. These addressed the evolving needs of an increasingly urban population.

The confluence of these events enabled the transformation of the CBD into one that is richer in mix, more varied in use, and more vibrant in utilization.

Today, the formula of energizing streets and open spaces with street-facing retail has become a key characteristic of subsequent business districts such as Eastwood, Bonifacio Global City and others. Ground level retail is even mandated in some developments.

The presence of shops and restaurants along the street has not only shaped patterns of downtown consumption but also the nature of movement in our business centers. They have allowed the street to be part of the destination and shops to become generators of pedestrian mobility, blurring the lines between the function of these elements.

What is interesting is that this idea isn’t new at all. Traditional cities, before the dawn of shopping malls and prevalence of cars, had commercial activity on the street. That is what we see in places like Binondo, Escolta, or even the streets just outside today’s CBDs.

Resiliency and diversity

Today’s business districts even combine the curated retail mix of shopping malls with the random, organic, and market-driven streetside shops. Many shopping centers tried to emulate streetside shopping and combine outdoor-oriented shops with more conventional enclosed malls such as Uptown Mall. This formula enabled some malls to thrive even through the pandemic. Resiliency requires diversity.

Retail is a subsystem nested within the larger urban ecosystem. To thrive, it needs to rely on the explicit and implicit interdependencies of activities that occur in varying scales.

It is common knowledge that retail complements most land uses—residential, offices, schools, streets, parks. They give life to these spaces and in turn, they benefit from the people occupying these areas. The positive feedback loop created provides the richness of life and activity within our urban realm.

Designers that are serious about creating meaningful places seek that elusive spark that can catalyze a banal space into a magnet for people. Many strive to make a place “Instagrammable” by resorting to superficial, cosmetic tactics which sometimes fail in connecting people to a place, other than just for a photo op.

The real opportunity in creating meaningful places lies literally beneath our feet—when we start to see the street’s true role: not just for conveyance but as the setting for the city’s informal public life.

Source: Inquirer