CEO Insights Magazine

With a population of around 115 million, the Philippines is one of the most densely populated countries in the world. Along with the high population density, the Philippine government has been facing major challenges in terms of providing quality affordable houses to Filipinos. A luxurious, cosmopolitan lifestyle has been a distant dream for the average Filipino. Using his extensive experience in banking and real estate, Jose Mari Banzon has been successfully leading SM Development Corporation as its President to become the largest real estate firm in the Philippines with multiple service portfolios and verticals. Under his able leadership and guidance, the firm has been providing complete sustainable communities to hardworking Filipinos at an attainable price.

In an exclusive interview with CEO Insights ASIA, Jose Mari shares his overall professional experience, the real-estate operations of SMDC and what makes it the real-estate leader in the Philippines, and much more.

Shed some light on your professional background and experiences. What inspired you to pursue a career in the real estate industry?

Fresh from theuniversity, I started my career as a Commercial Banker. I was specifically in corporate lending for about 20 years, most of which was in Hong Kong. I returned to the Philippines during the Asian financial crisis in 1989. Hong Kong was badly hit at the time. Many of the commercial banks were affected by the Asian financial crisis and they started foreclosing on their collaterals, which in turn made many of their loans turn into illiquid real estate assets.

Many commercial bankers at that time had to take on the role of Asset Managers, sincethe challenge was to convert those real estate assets into something more liquid and productive, which also included possibly selling them or turning the assets into real estate that would earn recurring income, or establish joint ventures with property developers to develop the asset. During that time, I discovered having a knack for real estate. When the opportunity presented itself, I made the shift from banking to real estate. My extensive banking background has been very useful especially in dealing with banks and understanding the financials involved in real estate development. That's how I started in real estate in the early 2000s, which was a fortunate move at that time as that was the beginning of the long, overextended boom in real estate in the Philippines that lasted for more than 10 years. It only got softened a bit during the pandemic. I'm glad to be a part of the real estate industry. Being a developing country, real estate is also one of the most evident signs of progress. There's also a feeling of contentment in helping people fulfill their dreams of owning their homes.

What was the driving force behind the establishment of SM Development Corporation? What key principles does the organization adhere to be competitive?

With a population of around 115 million, the Philippines is the 13th most populous country in the world. With the shortfall in housing estimated to be around six million, the lack of decent and affordable housing has been one of the major challenges for the country. The primary visionof SMDC is to fill that housing gap by providing quality affordable housing in sustainable communitiesto more Filipinos. In the early 2000s, condominium living was

democratized condominium ownership, and made luxurious urban livingattainable to more Filipinos. We tailor-fit our payment schemesto the cash flow and financial capacity of our buyers. You can buy a condo from us for less than 200 US dollars a month. We also make sure that our projects are inprime locations and offer accessibility, convenience, and safety to our homeowners. Being a part of the SM group, which is involved in a lot of sectors, such as banking, retail, mall development, offices, and hotels, we can capitalize on the synergies offered by the group to complement our residential developments. We also have our own property management company that takes over once we turn it over to the buyers to make sure that the standards and integrity of our developments are maintained.

The SM Group and SMDC has a strong culture of leadership and excellence. From our leaders, to our employees, down to our contractors and third-party suppliers, we constantly strive to improve ourselves to ensure that we build ideal communities that we provide the highest standards of service, and the best experience to our customers and stakeholders. The firm always takes a proactive approach to effectively respond to the fast-changing environment. Helping us to be agile is the company's culture of anticipation that allow us to plan ahead for potential challenges and opportunities. We embrace change and the best example of this is the digital transformation that is happening in SMDC. We are finding ways to automate our processes and make our transactions more convenient for our sellers, buyers, and residents.

Considering that environment-conscious infrastructure is becoming the new normal, does SM Development Corporation have any plans to implement similar projects in the future?

Our principals are strong advocates of sustainability, and at SMDC, sustainability does not only mean going green. Rather, we consider a more holistic approach, where we focus on the economic, environmental, and social impact of our communities and business practices. Aside from employing eco-friendly features in our development, we ensure that we provide a fully integrated lifestyle to our residents where they can thrive and flourish. Some examples of our sustainable and environmentally-friendly practices are we usually use off-grid solar power for street lights and common areas in our projects. We use occupancy sensors in restrooms, mailbox rooms, and common areas to save electricity. During the design itself, we make sure that the windows are carefully placed to maximize natural lighting and ventilation. We also use LED lights in all of our projects to increase energy efficiency. We also have holding tanks to mitigate flooding as well as to collect rainwater that is used to water the landscape. 20 to 50 percent of the podium space in our projects largely comprises landscaped gardens that contribute to reducing solar heat.

We believe that sustainable communities should not be expensive, so that more people can live a low-carbon footprint lifestyle. Hence, we are working with the best local and international master planners, architects and designers to create sustainable master planned communities, where people and families can thrive and flourish.

Jose Mari Banzon, President, Philippines

Using his vast experience in both the banking and real estate sector, jose mari banzon has been successfully leading smdc to become the largest real estate organization in the philippines offering a condominium lifestyle at an affordable price