CEO Insights Magazine

Having one of the biggest housing markets in Southeast Asia, the Philippine real estate industry is known for its cutthroat competition. It is, in fact, no wonder, as the market is projected to reach a market volume of $6.71 trillion in 2028 (according to Statista). Amidst this concrete rush, the developers often confine their focus to the highrises, leaving homeowners and their needs and satisfaction out of the picture. On the contrary, SM Prime, the property holding company of the SM conglomerate, has always been extremely vigilant in steering away from this industry practice, placing homeowners at the heart of its projects. The firm belief that family is the foundation of a thriving community has been a significant factor in SM Development Corporation (SMDC), SM Prime’s residential arm, carving its niche in this challenging market.

To explore SMDC’s latest endeavors, CEO Insights Asia engages in an exclusive conversation with Jose Mari Banzon, President, SMDC. Jose Mari joined SMDC in 2013. His experience goes well beyond the real estate industry, as he had previously worked in financial institutions both in the Philippines and in Hong Kong.

In conversation with Jose Mari Banzon, President, SMDC.

How has been the journey so far? What have been the major aspects of this success?

Starting my career as a commercial banker in Hong Kong exposed me to the complexities of international finance. After fifteen years, I returned home to continue my banking career in the Philippines. This was during the Asian Financial Crisis, and banks’ balance sheets were loaded with nonperforming real estate loans. In this environment, I transitioned to real estate development, as I had to manage the bank’s growing portfolio of foreclosed properties. I was transferred to residential property development, which has been my profession for the last eighteen years. My banking experience proved invaluable in my career, as finance closely intertwines with real estate development.

Cut to the present, SM Prime is the largest property development company in the Philippines, not only in market capitalization but also in the number and scale of projects. I have been fortunate to have a great team in SMDC. Working together, we increased our annual residential sales fivefold in six years from $571 million to $2.67 billion.

One can never overestimate the value of information, and I’ve always kept my ear to the ground. Our business has many moving parts, and it is crucial to understand how environmental changes can affect the different units. We keep track of world economic and geopolitical events, buyers’ tastes and financial capacity, evolving technology, local politics and regulations, industry trends, and competitors. Our extensive data and analytics infrastructure powers our decision-making and keeps us agile.

We do not believe in forcing obsolete business policies. We quickly shift strategies when the market calls for them. We are like an aircraft carrier that can turn on a dime. This close monitoring requires me to work 12-hour days, but I find fulfilment in what we achieve each day.

Could you tell us about SM Development Corporation’s position in the real estate industry? What is your USP?

According to a report from Leechiu Property Consultants, SMDC boasts 85,641 units sold at $14.22 billion since 2021. Being a part of SM Group’s umbrella is a definite advantage—being one of the country's largest multi-corporations that holds the most established companies in multiple industries, such as retail, finance, and real estate. Our large landbank in prime locations nationwide and a highly competent and experienced management team are adding to our advantage.

We are always sensitive to the financial capacity of our buyers. We match the monthly amortization paid for our housing units to the cash flow of our buyers to ensure they can pay for their purchase comfortably. Our condo units are compact and practical, catering to the market's needs, whether individuals or small families.

A primary feature of our residential developments is convenience. Our projects are next to SM malls, schools, business districts, and transportation hubs. All our residential developments have a commercial strip on the ground floor comprising a convenience store or grocery, restaurants, and a bank.

What are some of the major projects that you have undertaken during your tenure?

In the last ten years, SMDC launched 46 residential projects comprising 180,000 units. We have also entered into joint venture agreements with the government to develop 33 hectares along the country’s prime commercial area of Bonifacio Global City and 230 hectares in Carmona, Cavite, south of Metro Manila. We continue to scout for opportunities to develop townships in prime locations.

We doubled our sales force from 1,200 to 2,500 in-house sellers and increased our external sales partners. We simplified policies to make them sellerfriendly and introduced programs to incentivize our sellers.

To prepare our backroom for the surge in sales, we invested in systems to automate the different departments, notably customer service, documentation, accounting, and engineering. Hence, we were ready for the five-fold increase in sales over a short period of six years.

SMDC firmly believes that family is the foundation of a thriving community. How does it translate to execution?

SMDC builds complete and compact communities, which function as self-contained ecosystems. We devote a considerable land area in all our developments for outdoor facilities. Also, true to being the 'Home of the Good Guys,' we have organized several initiatives within our developments. The Good Guys Health and Wellness Caravan conducted medical check-ups for our residents. Through our The-Good-Guys-Job-Market, we connected jobseekers in our communities with companies like the SM Group and other organizations to explore employment opportunities. We also launched Ready to Rescue, a disaster-preparedness training program to educate Filipinos on the knowledge and skills needed to effectively respond and recover from disasters. We conduct programs for all ages, such as sports clinics for children and interactive programs for senior citizens.

What is the role of technology in SMDC?

Technology plays a key role in our growth. Our sales teams have apps that provide them comprehensive access to everything from marketing materials to available inventory, customizing payment terms to fit the buyer’s paying capacity, reserving a condo unit for the buyer, facilitating the buyer’s payment of reservation fees, and encoding the buyer details into the system.

Our buyers' portal enables them to access their accounts, make payments, monitor their account statements, and get updates on their investments. We’ve also automated our backroom systems to handle the huge volume of complex legal, accounting, and tax documentation. In addition, we have an extensive Customer Relationship Management system, including automated construction project monitoring.

SMDC continues exploring technologies that will allow us to provide our customers with an overwhelming experience. We also monitor developments in engineering to adopt the latest concepts on safe and efficient construction methodologies. We have started incorporating artificial intelligence in customer service and are exploring its use in other organizational aspects.

How do you keep yourself up-to-date with ongoing industry trends?

Our business development unit monitors the market and conducts regular industry studies. We also obtain inputs from our sellers and customers who live in our developments. We value their feedback and use this to improve our products.

What is the future destination you are heading towards?

SMDC’s vision is to provide a home to every Filipino. There is a housing shortage of eight million units in the Philippines. We serve the affordable market, which comprises the single biggest segment of the housing backlog—our objective is to fill that shortfall. We shall continue to strive to offer the Filipino the dignity of owning his home.

Jose Mari Banzon, President, SMDC

Jose joined SM Prime in 2013. His experience goes well beyond the real estate industry, as he had previously worked in financial institutions both in the Philippines and Hong Kong.

SMDC’s Awards under Jose Mari:

• Developer of the Year – Dot Property Philippines Awards 2023

• Developer of the Year – Dot Property South East Asia Awards 2022

• Developer of the Year – Dot Property Philippines Awards 2022

• Best Developer (Philippines) – Carousell Property Awards 2022

• Best Developer (Philippines) – Property Guru Philippines Property Awards 2021

• Best Developer (Philippines) – Property Guru Philippines Property Awards 2020