Philippine Business Magazine: Volume 9 No. 1 - Industry
Proper Management
Leave it to the professionals to manage your assets properly
By Anne Ruth dela Cruz

Some owners of commercial, office, or industrial properties leave the management of their properties to the professionals — the RCBC Plaza majority-owned by the Yuchengco Group of Companies is being managed by Colliers Jardine; the Enterprise Center owned by a consortium led by San Miguel Corp. by Jones Lang La Salle; and the PBCom Tower by FPD Savills. But some property managers do more than manage the assets. For one, these managers normally handle marketing while still others perform day-to-day maintenance such as housekeeping, security, and even collection of rent.

It is unclear when this trend of hiring the services of property managers became in vogue locally but it probably started when one of the biggest global players – FPD Savills — established operations in the Philippines in 1988. FPD Savills has offices in Hong Kong, China, Asia Pacific, Australia, South Africa, and Europe and provides a wide range of high-quality, comprehensive, property-related services to developers, owners, tenants, and investors across all the key segments of commercial, industrial, residential, retail, and hotel property.

“We came in at a time when the country, actually the whole world, was reeling from the effects of the 1987 financial crisis,” said Benedicto Miranda, FPD Savills’ Associate Director for Consultancy Services. “However, we were very optimistic about the Philippines and that the property market would pick up.” On top of property management services to clients, FPD Savills provides a full range of other property services from valuation and research, planning and consultancy to project and management, corporate real estate, investment leasing, and sales. Miranda claims the company is the largest property manager in the Philippines. “We presently manage about 50 commercial and residential projects nationwide totalling more than two million square meters.”

Miranda added that FPD Savills’ strength is in research, enabling them to provide clients with honest assessment of assets. If a property venture is not viable, he said he would not hesitate to inform a client about it. “I made my first presentation in December 1997 about the Fort Bonifacio project and based on my research, I said that it would take a while for the market to pick up.” History would prove him right. The predictions, he admitted, were not welcome ones but this increased FPD Savills’ credibility as the market leader.

Colliers Jardine
Years after FPD Savills started local operations, another global player set foot in the Philippines in 1995. According to Berna Santiago, Director of Retail and Property Management Division of Colliers Jardine, they had a hard time looking for prospective clients during that time. Colliers Jardine is jointly owned by the Jardines Matheson Group (one of Asia’s leading conglomerates) and Colliers Macaulay Nicols (a leading American property services company). “We had to educate the market about property management because they had the impression that we were selling encyclopedias,” she said. “It even reached the point when we even offered to manage a building for free so that we could start building up our client base.”

But for Nigel Lucas, Colliers Jardine executive director, that period presented a very promising era for the property market in the Philippine. “We were very confident then because the Philippines was attracting a lot of investments. We were also attracted by then-President Fidel Ramos’s invitation to do business in the country.”
The gamble paid off and Colliers Jardine gradually made a name for itself in the property management business.

Santiago counts Colliers’ technological advantages as its strength in attracting more local clients. “Colliers Jardine Philippines is electronically connected with all the other Colliers Jardine offices worldwide. This means that if we have offers to manage a hospital here in the Philippines, we can just check with our counterparts in other countries if they have experience in this and we adopt them.”

In addition to managing the property, Santiago adds that Colliers encourages clients to bring them in as early as the planning stages of the project. This will help anticipate and eliminate whatever problems that may arise in managing the building. “We dealt with one owner who wanted to put up a building with six entrances.” She said they advised him against that, pointed out the cost considerations in securing six entrances.

Jones Lang La Salle
Unlike FPD Savills and Colliers Jardine which manage more than 20 buildings, Jones Lang La Salle, so far, manages only five properties: The Enterprise Center, LKG Tower, GT Tower International, IL Corporate Center, and AOL Clark Field.

Katherine Chiu, Jones Lang La Salle property management officer, said the small number of clients they handle allows them to be more focused. “We are focused on Grade A development and our value-added to our clients is that we adopt the best-in-class practices. Besides, we have a global track record and we are very committed to our clients.”

In addition to property management, Jones Lang La Salle also offers other services like leasing, corporate property services, retail services, tenant representation, investment sales and acquisitions, finance, project and development management, development services, land sales and acquisitions, valuations and appraisals, consulting and research.

Market Outlook
According to these key players in the property management industry, the real estate situation in the Philippines is not as rosy. They expect the situation to improve only by 2003 or 2004 at the earliest. They all attributed this outlook mainly to the September 2001 terrorist attacks in the United States. “What happened last September 11 aggravated the situation even further,” Miranda noted. “Even if the people had extra money, they would rather spend it on basic items like food than real estate.”

For the three big players in the market, the year 2002 is a year of caution and “wait and see.” “Last year was a relatively good year for FPD Savills,” said Miranda. “In fact, our office here in the Philippines even outperformed the other offices in Asia Pacific.” Miranda added that they have a lot of projects lined up for the year and they are optimistic that they will be able to maintain their lead in the industry.
As for Colliers Jardine, Lucas noted that the first six months would probably be fairly quiet and the market will start picking up towards the end of the year. “We outperformed the other Colliers Jardine offices in other parts of the world and we just hope to maintain that.”

For Jones Lang La Salle, the year 2002 will see the completion of two of its projects — GT Tower International and IL Corporate Center. “It was a difficult 2001 for us although there were some success stories,” Chiu said. “However, we are now in a better position and we are more optimistic for this year.”