Occupancy is hardly a challenge for well-located office towers these days. Proof of this is the consistently low vacancy rate registered in Metro Manila, particularly in the central business district of Makati at 1.8 percent as of the second quarter of 2015. Developers continue to add to the inventory as projections of an industry-growth remain high.
But with the quantity or a range of options growing in ideal locations, values that greatly benefit the locator are fast becoming in demand. And for many of them, a Philippine Economic Zone Authority (PEZA) accreditation just might offer the clincher.
Businesses located in a PEZA-accredited building are entitled to a wide range of perks and advantages beneficial to the company and consequently, to its employees.
Developer Century Properties has taken advantage of this by having its latest office development, Century Spire, PEZA-accredited.
BENEFITS FROM ACCREDITATION
The office tower has a prime location — Century City in Modern Makati, the growing residential and commercial district north of the CBD. It also has groundbreaking architecture — by globally-acclaimed architect Daniel Libeskind.
It also has amenities that range from a retail section, a food hall, a fine dining restaurant, an auditorium with pre-function room, and a grand office lobby designed by Armani/Casa.
Century Properties has opted to add to them with an accreditation that many investors are finding attractive.
“The challenge we gave ourselves this time is to make an already Grade A building even more attractive,” Marco Antonio, Century Properties COO, said.
The PEZA’s aim is to bolster the flow of foreign investments in the Philippines by rewarding them with fiscal and non-fiscal incentives.
Chief of these is an income tax holiday. For a certain number of years, businesses in a PEZA-accredited zone enjoy tax holidays allowing companies to save up on tax fees and operational costs.
The exemption from corporate income tax is at 100 percent for four years for non-pioneer projects, six years for pioneer projects, and three years for expansion project (the income tax holiday applies to incremental sales).
Meanwhile, importations of equipment, capital equipment and parts, machineries, etc. are also tax and duty free in PEZA-accredited companies in a Special Economic Zone.
Other privileges include VAT zero-rating of local purchases of goods and services such as land-based telecommunications, electrical power, water bills, and lease on the building, subject to compliance with Bureau of Internal Revenues and PEZA requirements; exemption from payment of any and all local government imposts, fees, licenses or taxes; and exemption from expanded withholding tax.
Upon the expiry of the Income Tax Holiday, a five percent Special Tax on Gross Income and exemption from all national and local taxes shall be applicable.
“The reduction of levies imposed on businesses can result in anything from a reallocation of funds to equipment or services upgrade or even additional employee incentive programs,” Antonio said.
PEZA-accredited foreign entities in a PEZA-accredited location are also entitled to exemptions through PEZA’s non-fiscal incentives.
Century Spire will be one of Makati’s office towers with Grade AA features. It is also adhering to sustainability standards targeting a LEED Certification focusing on energy efficiency.
Source: Manila Bulletin | October 28, 2015