The latest episode of On the House: Small Talk with Big Bosses forms part of Lamudi’s online event, New Behaviors, New Demands: What Matters to Homebuyers Now. For the track New Essentials: Sustainability as the Community Spotlight, Lamudi CEO Kenneth Stern speaks to Jose Mari Banzon, SM Development Corporation’s (SMDC) President.
His journey in the real estate industry interestingly began in an era riddled with crisis. He was working as a commercial banker as the world was grappling with the Asian financial crisis. The company saw that he had potential in handling real-estate-related dealings, as the group sold properties in the market and partnered with developers to address bad debts. Eventually, he joined the company’s real estate arm.
“I’ve never looked back since,” Banzon said. Today, he’s the top executive of one of the biggest property developers in the country.
Wins and Tradeoffs
Sharing that he used to do marathons, Banzon mentioned that the question he often gets is if he still runs. While he manages to run early in the morning at 4AM, he candidly said that he’s not able to do it as often as he likes.
Nonetheless, even with this “trade-off” that comes with spearheading the operations of a big company, he expressed delight in their victories as a company. According to him, the affordable residential segment SMDC serves has performed quite well even amid the pandemic.
“The sales in the first half of 2020 is up compared to the same period last year,” Banzon said.
Although there may be a slowdown in investment activity with the return of some overseas Filipino workers (OFWs), a segment that accounts for 70 percent of SMDC’s sales, he remains optimistic about the market, considering the figures.
“Even if 600,000 OFWs — that’s the estimate — will be sent home, there’s still 10 million of them out there,” he pointed out.
Banzon added, “That’s P1.5 trillion. That’s the kind of money that can be directed to real estate investments.”
Dream Home Realized
While the affordable market remains resilient, Banzon acknowledged that some may be experiencing impaired income. To this, he mentioned that SMDC has adjusted payment terms to help buyers. It’s important for the company to design products that reflect the features the market is looking for and make it affordable.
“We have a product where you don’t even have to give a downpayment. You just pay, maybe, up to 20 percent for four years, which is actually quite comfortable,” Banzon shared.
He added, “The bank takes out the balance, the 80 percent, after the four-year period. You just have to make that monthly amortization match the monthly income.”
As for the actual home features, SMDC prioritizes what their buyers prefer. In terms of location, for instance, the company makes sure that it’s convenient. In the aspect of amenities, they include facilities that increase comfort and upgrade lifestyles, such as gyms and swimming pools.
Reiterating this further, Banzon floated the work-live-play concept they’ve embraced in their developments. To support work, SMDC builds in strategic locations.
“Many of our projects are located in CBDs (central business districts) or [people’s] place of work. Or if not, it’s near transportation hubs, where their work is just one ride away,” he mentioned.
Given the new normal of work-from-home now, Banzon said that they’ve designed units to have work stations. He said, “Even our common areas will have places where you can actually bring your laptops.”
In the aspect of live and play, SMDC boasts of lobbies designed like hotels and amenities with a resort feel. Banzon pointed out that residents can stay within the complex and still enjoy recreational activities.
“It’s also convenient because we always have the commercial strip so that [residents] can get their groceries, do banking, get a spa or a haircut,” he added.
Compliance to Green Standards
Strategic locations are a hallmark of SMDC developments. More than the convenience, it promotes lessening environmental impact among dwellers.
“We’re always next to malls or schools or transportation hubs. You rarely have to use your car,” Banzon mentioned.
Aside from location, he talked about the systems in place for harvesting rainwater in their developments. The property maintenance team uses this to water landscaped areas and clean amenities.
Inside the units, residents use LED lights, which are more eco-friendly.
“We follow the book on the green buildings to reduce our carbon footprint,” Banzon pointed out.
Community Effort in Pandemic Response
Aside from excellence in building construction, SMDC ensures the best services for their residents. Banzon mentioned that they introduced a weekend market in their communities when the pandemic hit, enabling residents to get the goods they need with less hassle.
“This actually started as a tie-up with SM Foundation,” he said. “We invited [farmers] to bring their produce to our developments and start fresh fruit and vegetables. Our residents don’t have to go out.”
This movement evolved as residents themselves began selling goods, such as baked food, themselves.
Also part of SMDC’s community initiatives is extending assistance to the elderly. Employees and young residents volunteer to buy groceries and medicines for the older members of the communities.
Banzon mentioned that they have organized webinars for the residents as well, covering a range of topics from mental health, wellness and exercise, cooking, and even cybercrime.
He added, “We tied up with the Red Cross. We had some medical missions and bloodletting [initiatives].”
Development Launches Amid the Crisis
Even amid the pandemic, SMDC has been busy with project launches. One of which is Gem Residences, a high-rise condominium rising soon along C-5 Road. Banzon said that aside from the usual amenities SMDC is known for, they allotted an area designed specifically to suit the lifestyle of professionals.
“A special feature that we introduced in Gem is what we call the Creators Park. It’s actually a co-working area outside, where you have tables and chairs and strong WiFi where you can bring your laptop and work in a nice environment. You have a lot of landscape and activity going around,” he said.
Residents have the option to work in the amenity if they want a change of scenery working in their unit. Banzon mentioned that professionals can find creativity in this area.
The inclusion of Creators Park in the development is a response to the rising trend of remote work. “Rather than let them [get] locked up in units, we provide them the environment that will allow them to work with the community around them,” Banzon pointed out.
Motivation to Keep Going
The demand in the market compels SMDC to introduce more launches.
“When the pandemic hit and the lockdowns started in March, we continued to operate. We’re able to sell through the internet, so that our inventory got depleted,” Banzon related. When the quarantine measures eased, that’s when the company was able to accelerate launches.
“We have quite a big pipeline for this year. We’ve already launched P60 billion of inventory up to August. We plan to launch another P80 billion up to the end of the year to replenish our inventory,” he pointed out.
Moving forward, SMDC expects that the inventory will be taken up quickly. They plan to buy more lands, not only in Metro Manila and Luzon, but also in the Southern Philippines region.
Recognizing that the pandemic has affected the finances of many property seekers, Banzon said that their company is coming up with a lot more affordable products. These properties, however, will support the trends in the new normal lifestyle, including work-from-home and social distancing.
“Our products will continue to evolve to match what the market wants, at the same time, make it affordable to make sure that people who have less income now will still be able to afford their homes,” he said.
Expansion of Reach
Confident that the OFW market will remain strong despite the current crisis, Banzon said that most of the clients they serve are looking to invest in Southern and Central Luzon, as well as the periphery of Metro Manila.
To offer better services to migrant workers, SMDC has a wide broker network abroad. They have also improved their marketing efforts by tapping the power of online selling.
“We gave a lot of funding to our sellers to set up their own website and boost their websites so they can easily reach the market,” Banzon pointed out.
For the developments, he said, “We created an interactive website that allows buyers to feel the showroom using the internet. We have the 360-degree view of our showrooms. We [also] have a program that will allow buyers to reserve units.”
As a final note, Banzon promises to commit to the same brand of excellence SMDC has long embraced. He said, “We assure the market that we’ll continue to come up with products with features that have what you’re looking for.
“We continue to watch trends to make sure we offer products that will make life comfortable for you, give elegance, and at the same time, still be affordable.”