AYALA LAND PREMIER - Building homes, realizing dreams

Back when there was nothing in Makati except for cogon fields, the first subdivision was built by Ayala Land Inc., the first high-rise, the first modern shopping center, the first theater. A century later – urban sprawl and all, high-rises flanking Ayala Avenue, malls becoming the new urban parks – the company is still making people’s dreams of having a home they can call their own come true.

But the times have indeed changed. Where there was space as far as the eye could see there are now buildings and private enclaves; and people’s attitudes have changed, too, about how they want to live their lives and the distance they consider "too far."

Through the years Ayala Land has established a reputation for premier – and expensive – residential projects whether they’re horizontal such as Forbes Park, the first subdivision in the country, or vertical like the über luxurious One Roxas Triangle. It also spun off two companies to address the very dynamic middle market – Community Innovations and Avida (formerly Laguna Properties Holdings Inc.). Last year, it went a step further by making its real estate companies three distinct business units: Ayala Land Premier (ALP) to continue with its high-end property development, with prices ranging from P4.9 to P30 million; Community Innovations (CI) for its vertical structures for the upper-middle market; and Avida, for the middle-income families.

The change is not just a marketing strategy but also a practical one for their target markets. In a world where the word "luxury" is being tossed around so much that it has almost lost its meaning, Ayala Land saw it fit to make it synonymous with its new brand.

Now you know that if it’s an ALP project, nothing can be more luxurious – or better. Just look at its list of developments: One Roxas Triangle, One Legazpi Park and The Residences at Greenbelt in Makati; One Serendra in Bonifacio Global City; Ayala Westgrove Heights in Cavite; Ayala Southvale Village, Sonera, in Muntinlupa; Montgomery Place and Ferndale Homes in Quezon City; Ayala Greenfield Estates in Laguna; Anvaya Cove in Bataan; Amara and Ayala Heights in Cebu, and Ayala Northpoint in Bacolod.

ALP head Angie Lacson, whose professional life includes two expatriate stints in Italy and the UK with Unilever as marketing head and with San Miguel Corporation in Manila, repeats the phrase "making our customers happy" so often that it almost seems like a mantra. She puts it in perspective when she says, "The nobility of the product Ayala Land delivers, how meaningful it is, made me fall in love with the real estate business. In my past professional life, I was involved in fast-moving consumer goods. The customer gets a bad one, he can always buy another. With homes, when you make a mistake your customer is stuck with it. You realize how important it is for your customers to be happy because you’re affecting 20 years of their lives or their entire lifetime. I like building communities, I like thinking about the people who will be living in them, and their being happy and proud of it. If you can do that, they will be your advocates and the generations after them will be loyal to you."

An energetic boss who speaks Italian and French, Angie credits her past experience for teaching her to understand how customers think, how they make their decisions. "My experience in consumer goods honed me to be market-facing – that it’s not just what we want to do but what the customers want, to try to keep up with their tastes."

Angie also scores the fact that Ayala Land delivers on its promises – in good times and bad. An example is One Roxas Triangle, which was launched in 1997 when the Asian economic crisis hit and local real estate development virtually ground to a halt, forcing many related companies to go bankrupt. The project was turned over to owners in 2001– without Ayala Land taking any shortcuts or making compromises on the promised amenities.

For this issue of Modern Living’s Living Space Special, Angie explains what makes Ayala Land Premier the dream of dreamers, and its homes everyone wishes they could have.

Excerpts:

PHILIPPINE STAR: Why was there a need to separate the brands of Ayala Land?

ANGIE LACSON: We want to make sure that customers know what they can expect from an Ayala Land Premier product versus what they can expect from Community Innovations or Avida. We would hear comments like, "I thought this was an Ayala Land project, why is it small?" There was also confusion about CI being a marketing arm. It isn’t. It’s a separate P3-billion company with its own type of residential products for the upper-middle market. There’s a little bit of overlap in the prices of ALP, CI and Avida. Say, a P5.9 million unit would have different sizes – in ALP it’s a one-bedroom, in CI it would be a two or three-bedroom but smaller. When we say there is "luxury in ALP," we mean luxury of space, density (there are fewer residents in the building or community), and services. The finishes would also be different – better and more expensive in ALP. But this is a dynamic world, you can be creative in your sourcing, and afford better finishes even for the CI market. All three companies are pushing the envelope to give something better for their projects.

How much are the prices going up every year?

We assume five percent but sometimes that’s not realized because it’s a competitive market. Our prices are distinctly higher than the competition of the same category by 10 to 20 percent. For ALP it’s P90,000 to P100,000 per square meter in Makati.

Why the higher cost?

We go back to the value proposition. It’s not just a matter of building a residential project and selling it off. We are committed to making sure that our customers are happy. There is a whole experience we are trying to develop. Now that we’ve separated the three companies, the ALP experience should be above everybody else’s. Programs are being put into place to make sure we achieve this. Our target market is the discriminating affluent and there are not too many of them.

Who are the affluent in the Philippines?

Our classification is very much on earnings and capacity to pay. Like in Ayala Greenfield our smaller lots would be around P4.5 million, which means you need to be earning at least P150,000 a month. If you’re buying a condominium, at least P170,000. The price points are critical because your amortization would still be high even if you get it on terms.

What’s the profile of ALP buyers? Are they entrepreneurs, bankers, dot-com executives?

Let’s start from the beginning: they would be the old rich who can afford P30-million condo units, or a P15-million lot and then build a P12 to P15-million house. Then you have the self-made entrepreneurs – the Chinese taipans and Filipinos. They have certain distinct characteristics, such as they buy for themselves and their children who may not be in that earning capacity yet but would have developed the same lifestyle and sophistication that demand a certain quality of life. They’re well-traveled, they see things around the world, they talk the same language.

They’re the type to get a house and lot as their wedding gift. Sure beats a toaster.

(Laughs) Exactly. That’s the market. Then there are the executives who can afford to buy an ALP unit or sometimes a CI unit. There are also those who fall in between.

For practicality’s sake, if you’re between the two markets, should you go for the higher or lower priced?

Either way. It’s also psychographics that dictate your choice: "I am at this level and should therefore appear to be at this level." Only ALP will carry the name Ayala Land, plus there are things we deliver that are slightly higher than what CI can deliver.

Like what?

The units and communities as a whole are bigger. For subdivisions we try to have a minimum of a hundred hectares to make our roads and lots bigger, the setbacks wider so there’s more space from house to house, and the density smaller.

Location is very critical – it has to be prime, but sometimes the location is not so prime and we build and make it prime, like Ayala Alabang in the past and Westgrove today. Westgrove addresses people who want to have a house and lot and would not live in a condominium. They would trade off the distance for better, cleaner air and the chance to bring up their children in that kind of environment.

Now there are those who want to be where the action is. They will not trade off four hours on the road for a bigger space. They want to have time with family, a balance between work and play. That’s where our condominiums are – they’re designed to be near or in the central business district.

What about the services that go with an ALP property?

As in all Ayala Land products, when we tell you we will deliver on such a date, we will do it – whether we’ve sold the entire project or only one unit. That’s what we stand for. You can rely on us to deliver on our promises.

We just don’t give you the key and that’s the last you hear from us. We undergo three punchlistings, which means we go around the unit to mark out the defects whether it’s in the walls or the paint. We’re very strict about it, so by the time the customer gets his unit, the target is zero punchlist so they can move in immediately.

After they move in, property management comes in to make sure the deed of restrictions is carried out, which is very important to keep the value of the property.

Does Ayala Property Management Corporation manage all properties?

Yes, but at different levels. For ALP, we’re very strict about the security, the way the personnel behave and their training. All this keeps the leasability high. So far, of the current buildings we’ve turned over, the residents are very happy. After two or three years, it’s up to the condo corporation to choose their own property management and so far everybody has chosen APMC despite the premium.

The way our buyers describe it is that when you live in an ALP condo-minium, you know things work. One phone call, even in the middle of the night, and somebody comes up and tries to fix it, like a leaking faucet. I live in a condo and I have a double-height ceiling, so I cannot reach the light bulb. I call them up and they change it for me. Then there are also restrictions on the use of the common areas. We have regular checks, like if the gym is being used properly, the elevators are running well, the upkeep of the landscape.

Everything is about pride in where you stay. It defines you, and we want to make sure you’re happy. We have the most luxurious options, not necessarily opulent, but worry-free living and exclusivity.

Yes, APMC is more expensive than others, but this redounds to the benefit of the residents. Like for One Roxas it’s P95 per sq,m., so if you have a 300-sq.m. unit, you’ll be paying P30,000 a month on the services. But then maybe you need only one maid, and everything else is taken care of – like security. If you live in a subdivision, you need a number of maids to clean it, gardeners to fix your garden, security guards. In an ALP condo, you have peace of mind that things work. You go in and out, you lock up, you go away, you don’t think about it. You can even feel confident to entrust them with your key to check on your faucets.

Can you ask them to water your plants?

Yes.

Feed your dogs?

(Laughs) No, we encourage that they send their pets to their vet. Maybe one day we will be equipped to do that.

Will we see more ALP developments in the north?

The properties we’re looking at are still under consideration. At present we have Ferndale, Montgomery, Ayala Heights and Ayala Hillside Estates and that’s only in Quezon City.

What are the trends in urban communities today?

When I first came in six years ago, condominium living was a far third in terms of preference. First was to have a house and lot or a lot to build a house on in the future. It was everybody’s dream to put their feet on the ground. However, because of the distance to find a reasonably priced house and lot, you trade off. Second was a townhouse. Then people began to accept condominium living, and it has grown tremendously in the past three years. Condos have overtaken townhouses in demand. Technology has forced people to accelerate their pace, so now they have to be close to things they have to do. Ten years ago it wasn’t like this.

When you launched Serendra, the selling point was that this was the new trend – the mid-rise buildings – that people wanted to be closer to the ground.

Yes, we researched a lot. The reason people don’t want to go high-rise is fear of fire and earthquake. People think the water hose will not reach their units, but of course we have water reservoirs on top to feed all the sprinklers (and all our condominiums have sprinklers). So we said, let’s see if we can find land near enough to answer two things: one is open space, and two is to answer that fear. Serendra is unique because it offers this combination of gardens and low-rise buildings, you can still walk down if there’s a blackout without killing yourself from exhaustion. You can jog around the gardens and feel safe because it’s a private enclave.

With projects like Serendra, because you’re building the structures, there will be an instant community. What about subdivisions where you sell only lots, how do you keep them from becoming ghost communities?

More and more, we’re building houses because there’s a market for it. We will be doing it in Westgrove and Greenfield. These houses (from 200 to 250 sq.m.) will be in clusters to keep them manageable and so that they won’t be dwarfed beside, say, a 600-sq.m. house.

There will be a menu of designs buyers can choose from. They’re going to be the types of houses that Filipinos love. It can’t be a purely foreign design because I feel we have to inject a bit of Filipino, and anyway our design aesthetic is eclectic

You split up the companies in August 2005, how has it worked for Ayala Land so far?

It allows us now to manage it well because the expectations of the public are very clear. In brief: the higher-end for ALP, upper-mid for CI, and middle-income market for Avida.

Within Ayala Land itself, are these three separate companies?

Yes, they are separate business groups. In Ayala Land Premier, there used to be three different separate units: the residential business group, which looked after all the vertical developments; then the land and community development group for the horizontal developments; and the sales and marketing group, which on its own was a marketing arm for the two. These were all combined now in one group, which I head so I can orchestrate everything, from selling all the way to after the turnover. It’s a much smoother process now, because even the products can be conceptualized to make sure they are at that level.

From selling consumer goods, you went into real estate. How was the transition?

That was a huge change. With fast-moving goods, you see quick results –what you make now you sell tomorrow. You see your progress, you see your your contribution very quickly. I was impatient in the beginning. Why can’t we sell faster? Why can’t we advertise? That was middle of 1999, there was very little advertising in the real estate industry. We started to push the envelope soon after.

When I joined Ayala Land, I headed the residential buildings group immediately. I needed to understand it very quickly; and as soon as I did the learning curve was fast, and I fell in love with it. I am very proud of working for this company.