Strategy for growth: premiumization

The future of commercial asset development such as office spaces and malls is through premiumization, according to Jericho Go, president and CEO of RL Commercial REIT Inc. and senior vice president and business unit general manager of Robinsons Land Corp.’s Robinsons Offices.

Go is also the concurrent president and CEO of Robinsons DoubleDragon Corp. and the chairman and president of Robinsons Equitable Tower Condominium Corp., Robinsons Summit Center Condominium Corp. and Galleria Corporate Center Condominium Corp.

He has over 30 years of experience in the field of real estate, and was responsible for filing and registering the Philippines’ very first IT park with the Philippine Economic Zone Authority, or PEZA, in 1997.

In a recent virtual briefing hosted by First Metro Securities, Go pointed out that following the pandemic in 2021, RCR “saw that office was the most formidable and most solid and steady asset class, owing to the fact that the ITBPM workers were labeled as essential service providers, and that’s why we decided office was the right asset to start with. Fast forward to 2025: we’ve seen the portfolio grow, and malls have joined in. Malls now account for 53 percent of the total GLA of RCR, with offices holding 47 percent. Now we have a market cap as of March 31 of P137.24 billion, and a GLA of 1.15 million square meters... so, as you can see, the RCR continues to evolve from offices. It now includes malls in our portfolio.”

He cited a CBRE report that revealed that 52 percent of malls are now into food and beverage, apparel (26 percent) and lifestyle (21percent). So from pre-pandemic times, he continued, “we’ve seen that our mix for food and beverage in our malls only constitutes less than 10 percent share. But today, it has grown to 25 percent share food and beverage... apparel, lifestyle has also come into our malls, and we are addressing, basically, the needs of our customers that are going to our malls. So we need to be aware, and we need to act proactively in order to address the requirements of the market.”

Go stressed that premiumization is also part of their strategy. “So in our more mature buildings, we realized that in order for us to keep in step with the times, and when I say keep in step, a lot of our tenants are saying that the entrance field, or when you enter the building, similar to what you do for the Philippines, when you enter the airport, it creates the first impression for that asset, for that office being occupied by our tenants. And if that is not representative of their branding, then it will be very hard to get them into this space.”

He assured that way back in 2021, they have renovated and reimagined their offices... “particularly our lobbies, so that these would be a source of pride and joy, not only for RCR but also for their tenant partners. Premiumization is key, and that will help attract customers,” adding that there is a “need for flight to quality for offices, and for our malls, a fresh new experience that will bring in more and more customers into our malls.”

He also noted that it “is important also to be able to grow our portfolio and to be able to tap new markets. Customer experience is going to be very vital.”

He revealed that based on RLC’s plans, “From 2026 to 2030, 730,000 square meters of mall space will be added to the portfolio of the sponsor, 480,000 sqm for offices, 320,000 sqm logistics and an additional 1,400 room keys for our hotels. So the future is bright and with a committed sponsor, the strength of RCR can truly be recognized with this.”

Another key aspect of their plans and strategies, he said, is sustainability. “So in our malls, you can see that we have a lot of solar panels, and this also helps address our requirement for power. And we all know that because of the conflict in the Middle East that fuel prices have really gone up dramatically. So, by creating operational efficiencies, we are able to also address the requirements of power of our tenants and of our buildings. Our offices are now LEED and EDGE certified. By end of 2026, all of our office buildings will be registered as Green Certified Buildings.”

He acknowledged that such certifications have now become an important factor in the selection process, or even in the renewal of spaces in office buildings. Thus, the decision to aggressively pursue this direction.

Citing their experience in their headquarters in Cyberscape Alpha, Go recalled that “When we inaugurated this with one of our directors, what they asked me to begin with was how many rooms? So, this is not a hotel, this is an office building, but we are providing a hotel-like experience for our lobbies.”

Go emphasized “being green or being certified. It creates a lot of efficiencies... We are able to reduce power consumption, we recycle water for watering of plants and for flushing of toilets and electric charging stations as well. We have been a proponent of that, and we want to make sure that we are very aggressive in promoting sustainability in our projects. Also, we have flexible workspaces. The advantage of having flexible workspaces is that you’re able to incubate tenants that are not yet ready to invest a huge amount of capex, but realizing the advantage of being located in RCR’s portfolio, they now see the advantages. And when that happens, they will obviously request for capital expenditures to be able to create their spaces. And hopefully soon to expand.”