Appraiser's estimate of Makati building 'hypothetical'

by Ira Pedrasa,

Posted at Aug 20 2014 08:14 PM | Updated as of Aug 21 2014 09:18 AM

MANILA - Senator Antonio Trillanes IV wants an ocular visit of the P2.2 billion Makati City office and parking building and invite experts to assess if it is overpriced.

During the hearing at the Senate on Wednesday, real property industry expert and appraiser Federico Cuervo said there many things and processes that must be done to assess the actual cost of a building.

Tapped by lawyer Renato Bondal to support a plunder case against the Binays, Cuervo estimated the Makati building price at P23,000 per square meter.

Bondal said this was way lower than the P84,000 per square meter cost infused by the local government to the project.

Cuervo clarified, however, that it was only a hypothetical costing.

“When I was asked to come up with an estimate, we only used the market value… The client only gave us a footprint of a hypothetical building,” he said.

Asked if the building could have an actual cost of P2.2 billion, he said: “I’m not aware of the actual cost since I was not there. If there are obsolescences, if it is overdesigned, it was not considered in the market value. I also did not include the depreciation because I did not see the building.”


He said the cost will also depend on the soil where the building was constructed.

Makati Mayor Jejomar Erwin Binay earlier said the building was not overpriced since construction had to take into consideration the area where it was put up, which was near Pasig River.

Senator JV Ejercito agreed, saying: “I was in construction before, the quality of the soil is very much a big factor in the cost of the production of the foundation of the building itself.”

Cuervo agreed, adding “yes, the bearing capacity of the soil will be the basis of the foundation to be used in the building.”

Bondal said the Makati office and parking building was even more expensive than other posh condominiums in Makati. Using Wikipedia as basis, he said the Shang Grand Tower costs P40,000 per square meter, while The Residences at Greenbelt was worth P45,000 per square meter.

Ejercito noted, however, that the condominiums are located in the Central Business District where the soil is more stable.

Cuervo agreed, noting also that a quantity surveyor would be the best expert to determine the cost of construction.

“If the objective is to find out the accurate cost of construction, yes. If it is to find out the market that will pay for a similar project, it will be the property appraiser,” he said.