CEO writes bright future for RLC
He started his professional career writing business news. Now, he is the one making it.
Veteran property developer Frederick Go—president and chief executive officer of Gokongwei-led Robinsons Land Corp. (RLC)—finds it fulfilling to look at a piece of raw land and envision what could be built on it that will last for generations. The skyline is essentially his palette.
“When I have grandchildren, I can point to them and say, I built this before you were born,” he says in an interview with Inquirer.
In past decades, RLC focused on just four businesses: shopping malls, hotels, residences and offices. In recent years, three new businesses have been added: industrial/logistics leasing, integrated developments focusing on “destination” estates and offshore township development in mainland China.
When the pandemic erupted last year, the worst hit was obviously the shopping mall segment, given the strict and recurring lockdowns in Metro Manila and other key regions, followed by the hotel business.
On the other hand, it has been a blockbuster period for the residential business, which is seen to end up with another banner performance this year.
“I suppose that everybody who wants to either work from home, or want more open space, or people who want the al fresco field are buying more land. So what we have now is, I guess, a situation where home-buying or subdivision land-buying is quite popular,” he says.
RLC has likewise been taking on large “destination” estates with the “live, work, play, inspire” proposition, the prototype for which is Bridgetowne, a 30-hectare master-planned estate straddling Quezon City and Pasig City. But during the pandemic, RLC’s best performing unit has been its new business in Chengdu, China. RLC’s residential condominium units there were basically sold out.
Resilient office leasing
One business segment that has performed well is the office portfolio, thanks to its vast business process outsourcing (BPO) tenant base. By the end of this year, RLC will have 721,000 square meters of leasable office space, up by 18 percent from last year. By next year, the portfolio is expected to expand by another 7 percent to 774,000 square meters. Occupancy rate as of end-March is 93 percent.
Go is personally hopeful that the office business could hit the one million-square meter portfolio milestone by 2025 as the group builds more office towers in Bridgetown, Iloilo, Bacolod, Ortigas and Cebu.
“This is, I think, a very resilient business primarily because our largest tenant base would be the BPO industry,” Go says.
REIT stock debut
RLC’s office portfolio also has among the lowest Philippine offshore gaming operator occupancy at 3 percent, which has further gone down from 5 percent at the peak. New BPO office take-up is mostly for expansion, but there are likewise new names coming to town. For instance, data center operator Beeinfotech PH recently set up shop in Bridgetowne, occupying 18,500 square meters. This is the largest telco-neutral data center in the country to date.
Out of its total office stock, RLC spun off 14 Philippine Economic Zone Authority-registered, high-quality commercial assets with 425,315 square meters of leasable space into a real estate investment trust (REIT) called RL Commercial REIT Inc. (RCR). Mostly office assets in central business districts—Makati, Pasig, Quezon City, Taguig, Naga, Tarlac, Cebu and Davao—total appraised value is close to P74 billion.
Last week, the Securities and Exchange Commission approved RCR’s proposed offering of up to 3.34 billion common shares at a maximum price of P7.31 per share, with an over-allotment option of up to 305 million common shares. Upon listing, RCR is seen to be the largest REIT by portfolio valuation, as well as the one with the longest land lease tenure, and most geographically diversified office REIT in the country.
At the Ateneo de Manila University, where he took up management engineering, Go was editor in chief of the campus publication, The Guidon. In the Christmas season of 1988, when he was still in school, his late uncle John Gokongwei pulled him aside in one family event. “I heard you’re a journalist. I’m buying the Manila Times. I want you to work there,” the tycoon told him.
Go wasn’t one to refuse his uncle. For a year, he covered the business beat, specifically, the Securities and Exchange Commission, the Manila and Makati Stock Exchanges (which had yet to unify at that time) alongside corporate news. He spent three years working at Manila Times, including some time at the sports and editorial desks, as well as two years at the business development/advertising side.
In 1992, Go moved to RLC, initially assigned to project development. His first job there was to scout for new projects. At that time, RLC only had five assets, including Robinsons Galleria which had just partially opened. The first project that Go opened was Robinsons Place Bacolod, followed by the redevelopment of Robinsons Place Manila. He has played key leadership roles since 1995.Now, RLC has 53 shopping malls all over the country, with a net leasable area hitting 1.58 million square meters by the end of this year.
Apart from growing the office and residential segments, the hotel portfolio has scaled up under Go’s leadership, hitting 3,400 guest rooms by the end of this year.
Asked what will change for RLC moving forward amid a prolonged pandemic, Go sees a clear path toward digitalization.
“Whether you talk about the digitization of service, the digitalization of commerce, the digitization of financial instruments, the digitization of information, the digitalization of processing, documents, digitalization of communication—all of these have been hastened,” he says, adding that RLC’s business will thus have to adapt.
Go, who is at the helm of a 6,000-man organization, also had to adapt. He strives to empower his people by streamlining all the reporting relationships so that each of them could become more productive.
“I also believe in being agile and flexible. I don’t believe in very hard and fast rules. I don’t believe in creating standards or rules that apply to everyone just because … I think we should be able to customize.”
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