APPRAISAL REPORT

For

BAGUIO TOWNHOUSE
CONDOMINIUM CORPORATION
Located at
#14 Outllook Drive corner Romulo Drive,
Baguio City

BY: CLIFFORD B. CUBIAN, CPA, REB, REA

February 13, 2017

VICTORINA A. COLLADO
29 Lower Pinget, Baguio City

Madame:

In accordance with the Philippine Valuation Standards, this appraisal report is hereby
submitted for your evaluation. I understand that this report will be used as a basis for
determining the value of the improvement adjacent to your property. I have inspected
and examined the subject property including the relevant documents available; and
inquired from the neighbouring properties for the fair appraisal of Market Value.

Due to the limited time in the preparation of this Appraisal Report, I would request
further study especially those that would require technical expertise.

Attached are the following:

Limiting Conditions
Highest and Best Use
Cost Approach
Sales Comparison Approach
Income Approach
Photographs of the Subject Property
Tax declaration of the improvement
Lot Plan
Official Receipts of realty tax payment of the Lot and improvements

I hereby certify that I have no vested interest on the subject property or on the Opinion
of Market Value herein reported.

Very truly yours,

CLIFFORD B. CUBIAN
 SUBJECT PROPERTY

Main Road next to Mansion House

Top floors of Building 4 and 5)
Admininstrative Office

LOT PLAN

LOT NO. 1 (0.1623 has.)

 LINE BEARING DISTANCE
Tie pt.
Triangulation
Station D Baguio
S 55-56 E 1,063.44 m.
Townsite
1-2 S 3-29 W 30.92 m.
2-3 S 87-39 W 10.76 m.
3-4 N 85-34 W 26.24 m
4-5 N 35-59 W 15.52 m.
5-6 N 60-47 W 21.61 m.
6-7 N 50-36 E 13.17 m.
7-1 S 87-48 E 56.63 m.

Lot NO. 2 (0.1336 has.)

LINE BEARING DISTANCE
Tie pt.
Triangulation
Station D S 55-56 E 1,063.44 m.
Baguio Townsite

1-2 S 69-35 E 60.12 m.

2-3 S 61-18 E 8.66 m.
3-4 S 44-42 W 16.01 m
4-5 E 80-55 W 36.04 m.
5-6 S 89-55 W 18.97 m.
6-1 N 3-29 E 30.92 m.

1. DEFINITION OF THE PROBLEM OR ASSIGNMENT

 1.1 Identification of the Property

The property subject of the appraisal is located along Outlook drive corner
Romulo drive, Baguio City. The subject property have five building structures and
an administrative office. The Building is covered by Tax declaration nos. 01-
07005-79239 and 01-07005-79240.

The subject property started in the early 1980s as a Condominium Unit for
sale under Montevideo Realty Development Corporation. After selling 47 condo
units, the management and maintenance was transferred to the Condo Unit
Home Owners Association under the name Baguio Townhouse Condominium
Corporation which was registered with the Securities and Exchange Commission
(SEC).

1.2 Intended User

BAGUIO TOWNHOUSE CONDOMINIUM CORPORATION

1.3 Intended Use and Purpose of Appraisal

a. To determine and arrive at an opinion of Market Value of the Fee

Simple Estate of the above Corporation .

b. As a basis for determining the insurance coverage and the premium

to be paid.

Market Value as defined in PVS as the estimated amount for which a

property should exchange on the date of valuation between a willing buyer and a
willing seller in an arms length transaction (a transaction between independent
related parties involving no irregularity) after proper marketing wherein the
parties had each acted knowledgeably, prudently, and without compulsion.

Fee Simple is defined as absolute fee, without limitations to any particular

class of heirs or restrictions, but subject to limitations of eminent domain, escheat,
police power and taxation.

1.4 Date of Appraisal November 12 - 20, 2016

 1.4 Extraordinary Assumptions

That the subject property is assumed to be free from any liens and
encumbrances as appearing from the provided copies of the Certificate of Titles.
Responsible ownership and competent property management are assumed.

1.6. Limiting Conditions

a. The appraiser assumes no responsibility for matters of a legal nature

affecting the property appraised or the title thereto, nor does the appraiser
render any opinion as to the title, which is assumed to be good and marketable.
The property is appraised as though under responsible ownership.

b. The sketch in the report which shows approximate dimensions were

included to assist the reader in visualizing the property. During the valuation
process, no relocation survey was executed to validate the extent of the subject
propertys boundaries. However, drawings copied or taken from approved
technical plans are reproduced as accurately as possible in order that these
drawings may serve as valid and reliable reference.

c. Any distribution of the valuation in the report between land and

improvement applies only under the existing program of utilization.

d. Information, estimates, and opinion gathered were used in the report were
obtained from reliable sources and believed and assumed to be true and correct.
However, I assume no responsibility in the accuracy of the data
obtained/gathered.

e. Neither all, nor any part of the content of the report, or copy thereof shall
be used for any purpose by anyone but the client specified in the report.

f. The utilization of the land and the improvements is within the boundaries
of the property lines.

g. There is no encroachment.

h. No survey was made by the appraiser, Lot plans are based from the title of
the subject property.
 1.7. Hypothetical Conditions

The valuation is prepared as if the subject property is being liquidated at

the present time. The market conditions are constant and there are ready and
available buyers.

In using the income approach it is presumed that all condominium dues,

water bills, electric bills and special assessments are collected. No delinquency.
An average of P14.27 per square meter per month is charged for water
consumption in each unit. All amounts collected.

Special assessment amounting to an average of P10.45/sq.m. will be

assessed from all unit owners. All assessments collected.

I. SCOPE OF WORK

a. Actual inspection, both in the exterior and the interior of the subject
property.
b. Research public records for assessment pertaining to the subject property.
c. Prepare a brief history of the property.
d. Gather and analyse all the information and data obtained.
e. Take photographs of the property during the actual inspection.
f. Consider all three approaches to value and determine which approach or
approaches were applicable, given the nature of the subject and the
availability of such data.

II. DATA COLLECTIONS AND PROPERTY DESRCIPTIONS

 1. Market Area Data

a. The Region

The Cordillera Administrative Region is a region in the Philippines in the

island of Luzon. The only landlocked region in the country, it is bordered by the
Ilocos Region in the west and southwest, and by Cagayan Valley on the North,
East and Southeast. The region is composed of 6 provinces, namely: Abra,
Apayao, Benguet, Ifugao, Kalinga and Mountain Province. The regional center is
the highly urbanized city of Baguio. The region officially created on July 15, 1987
covered most of the Cordillera Central Mountains of Luzon, and is home to
numerous indigenous peoples collectively known as the Igorot.

b. The City

Baguio City is a highly urbanized city located in the province of Benguet in

Northern Luzon island of the Philippines. The City has become the center of
business and commerce as well as the center of education in the entire Northern
Luzon.

Baguio has morphed from what was once a grassy marshland into one of
the cleanest and greenest, most highly urbanized cities in the country. It has
made its mark as a premiere tourist destination in the Northern part of the
Philippines with its cool climate, foggy hills, panoramic views and lovely flowers.
Being the ideal convergence zone of neighbouring highland places.

Baguio is the melting pot of different peoples and cultures and has boosted
its ability to provide a center for education for its neighbours. Its rich culture and
countless resources have lured numerous investments and business opportunities
to the city.

Baguio City is approximately 250 kilometers north of Manila. The area of

the City is 49 square kilometers enclosed in the perimeter of 30 kilometers. The
developed portion of the city corresponds to the plateau that rises to an elevation
of 1,400 meters. With City Hall as reference point, it extends 8.2 kilometers from
East to West and 7.2 kilometers from North to South. It has a perimeter of 30.98
kilometers. The City has twenty administrative districts among which its
barangays are divided. Ilocano is the predominant dialect in the city.
 Baguio is 8 degrees cooler on the average than any place in lowlands.
When Manila sweats at 35 degrees centigrade or above, Baguio seldom exceeds
26 degrees centigrade at its warmest. Baguio is very wet during the Philippine
rainy season, which is from June to October. It gets the biggest amount of rainfall
in the country, twice the volume of rainfall in the country as compared to Manila.
However from November to May, Baguio becomes a tropical paradise, a
refreshing break from the hot and humid Philippine climate. Christmas season is
when Baguio glows with the nippy winter air. In the summer month of March,
April, May, Baguio lives up to its title as the Summer Capital of the Philippines
when thousands of visitors from the lowlands and Manila take their annual
exodus to the city to cool off. Casual clothing is recommended worn with jackets
or sweaters in the late afternoons or evenings.

According to the 2010 Census of Population and Housing conducted by the

former National Statistics Office (now PSA), the city is called home by 318,676
residents. However, Baguios daytime population is much larger as it continues to
attract tourists, entrepreneurs, and students putting a strain on utilities and other
basic services in a city that was originally built for 30,000 persons. The city has
the highest population density in Cordillera at 5,541 people per square kilometre,
almost 68 times that of the region. With the 2015 Census of Population currently
by the PSA, the citys headcount is expected to rise and the local market to
expand.

c. The Neighbourhood

The Subject Property is located at nos. 14 Outlook drive corner Romulo

drive, Baguio City. It is situated east of the Presidents Mansion House and south
of the vice president summer house which is now DBP Training Center just across
the road. It is located North of DMCI Outlook Ridge Residence. It is neighbouring
the barangay hall and an eatery which is regularly being visited by taxi drivers
and tourists.

Neighbourhood Map (source Google map)

 2. Subject Property Data

The Subject Property is composed of 47 units which have a total floor area
of 5,413.20 m. Approximately, the landings have an area of 324 sq.m. while
the 5 bridges have an area 105 sq.m.. The Administrative Office has a total floor
area of 43.5 m.

The combined Lot area is 2,959 m more or less covered by two separate
tax declaration nos.. The subject property is 36 years old from 1980.

It is situated along V. DE LOS REYES ROAD and junction of North Outlook

Drive, Leonard Wood Road and road to Mines View Park.

Building I
 - Has 7 unit owners, 3 Floors, 1 Attic, 724.34 square meter total sold units
and with 2 emerging lights and 1 fire cabinet. All units are 2 BR./G. Grand
Vista = BR. w/ Maids Room.

Building II
- composed of 8 unit owners, 4 Floors, 1 Attic, 849.67 square meter total
sold units. With 2 emerging lights and 1 fire cabinet. All units are 2 BR/G
Excluding Terrace = 3 BR., GV = 2 BR. WITH MAIDS ROOM.

Building III. All units are 3 BR W/ MDS, Excluding. GV

- composed of 8 unit owners, 4 Floors, 1 Attic, 880.12 square meters total
sold units. With 2 emerging lights and 1 fire cabinet. All units are 2 BR/G
excluding Terrace = 3 BR., GV = 2 BR. WITH MAIDS

Building IV
- composed of 13 units owners, having 6 Floors, 1 Attic and a total of
1,618.45 square meters sold units. With 2 emerging lights and 1 fire
cabinet. All units are 3 BR with maids excluding GV IVA = 1 BR and GV
IVB = 2 BR.;

Building V
- composed of 11 owners, 5 Floors, 1 Attic, 2 emerging lights with 1 fire
cabinet. A total of 1,340.62 square meters sold units. All units are 3 BR
with maids excluding GV VA = 1 BR and GV VB = 2 BR.;

The buildings is occupying a lot area of 1,086.09 sq.m. more or less. The
remaining 1,872.91 sq.m. is common area which covers the parking spaces,
pathways, admin office, center tank and water pump house.

Common Area:
approximate
Admin. Bldg. 43.5 sq.m.
5 bridges 105 sq.m.
Landings 324 sq.m.

3. Description of the Site

 Summary:

PIN 01-07005-79239 and 01-07005-79240.

FRONTAGE - 134.29 meters
SIZE - 2,959 m
ACCESS - Average
VISIBILITY - Average
ZONING - Residential
FLOOD HAZARD AREA - None
PARKING SPACE - for 47 unit owners
UTILITIES - Heater, Electric, Overhead Water tank and
Center tank, Sewer

III. DATA ANALYSIS

1. Market Analysis

1.1 Demand Studies

The influx of various tourist in the City especially in Pacdal Area and the
increase in the population have created a demand for residential houses, condo
units and apartments either for long term or short term.

1.2 Supply Studies

The supply of land in Baguio City is limited. The total area of 49 square kilo
meters covering the whole of Baguio City is divided into forest and watershed,
industrial, commercial, parks and residential area. The high cost of land
development and building construction, increasing prices of land, and financing
charges on real estate loans even depress the market.

1.3 Marketability Studies

The subject property is highly marketable. It is accessible to public

transportation. It is closer to regular tourist destination such Wright Park, Mines
View Park, and the Mansion, Country Club, Camp John Hay.
IV. HIGHEST AND BEST USE ANALYSIS (HABU)
 Highest and Best Use is defined as the most profitable likely use of the
property. This opinion may be based on the highest and most profitable
continuous use to which the property is adopted and needed, or that use to
which may reasonably be expected to produce and the greatest return to land
over period of time.

The most probable use of the property which is physically possible,

appropriately justified, legally permissible, financially feasible and which results in
the highest value of the property being valued

1. SITE AS THOUGH VACANT

Due to the numerous visitors and tourists in the area, the site can be
used as a parking lot for cars and buses. The site can also be a waiting area
for coffee, loading and unloading of people.

2. IDEAL IMPROVEMENT

The Highest and best use would be a Residential/Commercial

Townhouse Condominium. A Commercial Area for a mini grocery store or
a convenient store.

3. PROPERTY AS IMPROVED

Based on the analysis of the prevailing land usage as a Residential

Townhouse Condominium in the neighbourhood, I am of the opinion that the
existing improvements would represent the highest and best use if it will be
well maintained. That is the building is newly painted and the flower boxes
contains varieties of flowers or plants that will add color to the surroundings.

V. LAND VALUE OPINION

 The Land Value according to the latest sales as of November 01, 2016 of lots
found near V. De Los Reyes Street or within the outlook area ranges from P25,000
to P30,000 per square meter. This is the prevailing sales price in the area.

VI. APPROACHES TO VALUE

a. Cost Approach
Cost Approach as defined in the PVS as one of the approaches to value
commonly applied in Market Estimates and many other value situations. It is also
known as Replacement Cost or Reproduction Cost less depreciation.

Value = Cost to reproduce/replace depreciation + Land value

COST APPROACH

HOUSE IMPROVEMENT
REPRODUCTION OR REPLACEMENT COST:
(FA 154.15 sq.m x P20,000/sq.m.) P 3,083,000.00
LESS: ACCRUED DEPRECIATION (30/50 = 60% x P3,083,000.00) 1,849.000.00
DEPRECIATED VALUE OF BUILDING & ADMIN OFFICE P 1,233.200.00

SITE IMPROVEMENT
North and East Side
Hollow Block
Total Area = H x L = 19.1m x 3m 57.3sq.m.
x
Contract/Labor and Material Cost 1,000/sq.m.
P 57,300.00
South Side
Riprap
Total Area = H x L = 10.6m x 2m 21.2sq.m.
x
Contract/Labor and Material Cost 1,000/sq.m.
P 21,200.00
Hollow Block
Total Area = H x L = 10.6m x 1.5m 15.9sq.m.
x
Contract/Labor and Material Cost 1,000/sq.m.
P 15,900.00

REPRO. COST OF SITE IMPROVEMENT P 94,400.00

LESS: ACCRUED DEPRECIATION (60% x 94,400.00) 56,640.00
DEPRECIATED VALUE OF SITE IMPROVEMENT P 37,760.00

TOTAL DEPRECIATED REPRO/REPL. COST OF HOUSE & IMPROVEMENT P 1,270,960.00

INDICATED VALUE VIA COST APPROACH P 1,270,960.00
 b. Sales Comparison Approach

Particulars Subject Property Comparable Adjustments

Property of Rosita A. Property of Jun Fuertes
Santiago (House and Lot)
Address #29 Lower Pinget, Lower Pinget
Baguio City
Selling price P P 10,416.67/sq.m.
(improvement)
Selling price P 2,000,000.00 P 1,250,000.00
(improvement)
Rights
transferred Fee simple Fee simple
Zoning Residencial Residencial 0%
Location Behind the corner lot Along the road 10%
Unit size Bigger Smaller - 5%
Age 30 years old years old %
Floor Area 154.15 sq.m. 120 sq.m. - 22%
elevation Flat Flat 0%
Adjusted
price (Bldg.) P 8,490.63/sq.m.
Fair market
Value P 1,308,830.61
(improvement)
land Rights Titled
Shape Square Square
Lot Area Rights only 250 sq.m.
Lot Value P 1,250,000.00
Total
Property P 2,500,000.00
Value

-
 INDICATIVE VALUE VIA SALES P 1,308,830.61
COMPARISON APPROACH

c. Income Capitalization Approach

Income Approach typically involves projecting the income and expenses of

a property over a period, or periods, of time into a cash flow projection before
debt service and depreciation. The cash flow (net operating income is then
capitalized into a value estimate. Income stream or potential income stream of
cash flow expresses a fix relationship between the two factors of (1) net Income
(2) capital value.

RECONSTRUCTED OPERATING STATEMENT

EFFECTIVE GROSS INCOME
RENTALS (P 5,000.00/mo. x 16 pax x 12 mos.) P 960,000.00
LESS: PROBABIBILITY OF VACANCY (20%) 192,000.00

TOTAL EFFECTIVE GROSS INCOME P 768,000.00

ANNUAL EXPENSES:
SALARIES AND WAGES (P 285/day x 26 days x 12mos.) P 88,920.00
ELECTRIC BILL (P 1,500.00 x 6 x 12mos.) 72,000.00
WATER BILL (P 500.00/pax x 16 pax x 12 mos.) 96,000.00
PERMITS AND LICENSES 15,000.00
MISCELLANEOUS 20,000.00
TOTAL ANNUAL EXPENSES P 291,920.00
NET OPERATING INCOME P 476,080.00
 DATA:
NET OPERATING INCOME OF THE PROPERTY P 476,080.00
APPRAISED VALUE OF HOUSE BY COST APPROACH
HOUSE & SITE IMPROVEMENT P 1,270,960.00

OVERALL RATE (476,080.00 / 1,270,960.00) = 0.3746%

CAPITALIZATION RATE:
INTEREST RATE 4.13%
RECAPTURE RATE (100%/3) 33.33%
OVERALL RATE 37.46%

LAND RESIDUAL TECHNIQUE

NET OPERATING INCOME P 476,080.00

LESS: INCOME ATTRIBUTABLE TO THE BUILDING
BLDG. (33.33% x P 1,270,960.00) 423,653.33
INCOME ATTRIBUTABLE TO THE LAND P 52,426.67

LAND VALUE (P / %) P 1,269,410.82

ADD: BUILDING VALUE BY COST APPROACH 1,270,960.00
FAIR MARKET VALUE (HOUSE AND LOT) P 2,540,370.82

INDICATIVE VALUE VIA INCOME APPROACH

(LAND RESIDUAL METHOD) P 2,540,370.82

IV. RECONCILLIATION OF VALUE INDICATORS AND FINAL OPINION OF VALUE

Reconciliation is the final step in the valuation process. It correlates the

values obtained from the three approaches. Each approach used is rated as to its
relative significance and dependability. The greatest consideration is placed upon
that approach that is most relevant to the property being appraised. The criteria
used for choosing the most applicable approach are the Appropriateness,
accuracy, and quantity of available data obtained for each approach. From this
analysis, a final value is chosen that reflects the Appraisers best judgement of the
market value.
 The Cost Approach indicated a value of P 1,270,960.00
The Sales Comparison Approach indicated a value of P 1,308,830.61
The Income Approach indicated a value of P 2,540,370.82
V. REPORT OF DEFINED VALUE

Estimated Value of Real Property P 109,398,202.50

Say P 109,300,000.00

After analysis and evaluation of the foregoing value determinants and

indicators, it is hereby concluded that the market value of the subject real
property as of February 13, 2017 is: ONE HUNDRED NINE MILLION THREE
HUNDRED THOUSAND PESOS (Php P 1,270,000.00).

Enclosures:
1. Tax dec improvement PI No.
2. Photos

PICTURES OF THE SUBJECT PROPERTY:

Building V - 5 Storey Bldg., 1 Attic (Grand Vista Floor)
SITE DEVELOPMENT PLAN