BUILDING THE PHILIPPINES' NEXT MEGA CITY

The change of venue was refreshing like its namesake wine, Chardonnay. The forum opened with cheerful news about the club’s recent activities - adding technology into our Forums such as migration from Viber groups towards Telegram and a novel way to ask questions and participate in the forum, using PollEverywhere.com, there was even a portion for Ancient Chinese Wisdom- “Harmony is the Source of Abundant Wealth”. It was a fortuitous adage of the message of our Speaker for the evening. The evening’s awaited speech had all the topics an Anvil member, would be currently interested in – Firstly, Dynamics of a Family Business, and learnings from the 1st generation. Secondly, Real Estate Development, Aseana City’s Prospects, and a scoop on a hot IPO.
Family Business & The Legacy of the elder Wenceslaos
Delfin Angelo “Buds” Wenceslao, as CEO, and brother Edwin Wenceslao as VP for Treasury, represent the 3rd generation in the family business started in 1960 by founder Engr. Delfin Wenceslao. DM Wenceslao & Associates, Inc. or DMWAI, is respected as one of the top construction companies in the Philippines. The company was further introduced to the audience by way of a brief, well prepared AVP. We found out about its history, milestones and success. More significantly, it conveyed the values with which the founders built the company on – Integrity, Vision and Relationships.
Integrity. People in business know the challenges of the construction industry. Often, many a supplier would have difficulty collecting from a construction firm. But it is not the case in DMWAI.
A company Engineer recalled a trying time for the company, the reclamation for the Zamboanga Port. Apparently the principal renegged; or was late on payments, leaving DMWAI out on a limb. In spite of this, the firm managed not only to survive but complete the project, and pay off its obligations to suppliers, and subcontractors.
Vision. How Aseana City came to be, is not by serendipity. The young Wenceslao shared, “We did it because no else wanted to”. They reclaimed the land, all 200+ hectares of it, from Manila Bay, the side of Paranaque. With the land value now fetching a current market price of p150,000 up to p200,000 per square meter, it is easy to appreciate its value. But in 1991, when the actual reclamation started, times were uncertain. Times weren’t as stable. “The Ayalas just bought Fort Bonifacio (Metro Pacific Group, original bid winner defaulted) and the SM Group was doing its own thing with MOA”, added Buds. This WAS NOT a venture, which a more risk-averse businessman would get into, but only by a man with Visionary Leadership.
Relationships. What most impressed upon me was the importance of Relationships to the Wenceslaos. From testimonials of the staff, I learned that the elder Wenceslao treated his employees very well, such that not a few people who were there since the start, are still with them today. A management tip I garnered was the generosity of the company, like for example, a bonus to those who performed, after the successful completion of a project. A senior project engineer even proudly shared that his neighbors were witness to his progress in life, having a successful career at DMWAI. It is always heart warming to hear of stories like this, of companies progressing together with their employees.
There is genuine desire for the young Wenceslaos to continue the Legacy of the 1st and 2nd generations, to honor them, and make their Father proud. They do this by maintaining good relations with everyone - customers, suppliers, at the workplace, and they keep their doors literally open to the staff, ready to listen to their needs.
They talk about frugality. They believe that Functionality is more important, It does not need to be a designer good or luxury item. For example, in the case of transportation…” It doesn’t have to be a Ferrari. As long as it gets you from point A to point B, its fine “. They talk about hard work and dedication, “We are in the office Monday till Saturday, this ensures fast response – We decide fast.”
About company and personal, family matters – they mentioned that there is difference with being loyal to the Family and being loyal to the Company. For them, the Company comes first. They are now preparing the 4th generation, and have hired a consultant to prepare their family constitution. For the family members that wants to join the company, they plan to, and I use Buds term here, “Incentivize” their work or performance. As these values are sound, and worthy to emulate, one can be confident of the success of the next generation.
Prospects of Aseana City, an IPO in the near future
From its roots in construction, the young leaders of DMWAI, Buds and Edwin ( who are from Ateneo and the UA&P, respectively) are now gradually moving the company toward Real Estate Development and Leasing. Why is that?, one may ask. According to Buds, they come to this decision based on their observation that construction has smaller margins, as compared to real estate development. Add to this, difficulties in collection. However, the hardest of all, as Buds claims, is the very cyclical (seasonal) nature of the construction industry. Thus, to ensure a more stable revenue stream, their company has decided construction company’s revenue stream would be affected.
DMWAI’s Forte is land reclamation and leasing. Its “AAA” contractor, which means it is capable of any construction project. Last year, in 2015, it completed it 102th major construction project. Starting in 2012, their revenue stream is moving from construction to leasing…Why?
Around 1989 they completed the reclamatio and partnered with Hong Kong Land (the Ayala of HKG, developer of Central) for a 3 hectare premium residential project which has a “Linear park from Roxas Boulevard to the sea”. Now they set their sights on actualizing Aseana City.
Prospects for Aseana City: The only large, contiguous, undeveloped prime real estate in Metro Manila. The nearest comparable projects are Arca South (former Food Terminal Inc. or FTI) and Vertis North( former North Triangle in QC)
Directly connecting TO/Intersects with 3 new major infrastructure projects:
1) NAIA Expressway
2) LRT 1 Extension from Baclaran to Bacoor
3) The Southwest Integrated Terminal Station
Envisioning ASEANA to be a modern, sophisticated city - they are now working with CISCO to make it a wired, “SMART CITY” with all cables underground, and security cams /cctv installed. They also wish to promote “walkability”, specially making wide, unobstructed Pedestrian lanes.
Out of Aseana’s total land area of 204 hectares, roughly half is now occupied by Pagcor Entertainment City which has four grand, resort casinos namely - Resorts World, Solaire, City of Dreams and the upcoming Tiger Resorts. Another 60 hectares is set aside for mixed commercial and residential use. Companies which are already located or have committed to locate in Aseana City are the following: S&R warehouse Shopping, DFA Passport Plaza, King’s School (Singapore International School), Solemare Parksuites, Subaru Motors, Ford Motors, Tune Group of Hotels, Blue Leaf Events Pavilion, and the much anticipated Alphaland Bay City & Marina and the upcoming Ayala Mall. Not to be missed to are the numerous Petroleum/ Gas Stations. From the original figure, only 36 hectares is left undeveloped which is approximately worth pesos 84 billion.
Their first office building was Aseana One, the 2nd and 3rd soon followed, being well received, they are fully leased out/occupied. Now they are working on Asean 4 with 47,000 sqm office space, and Aseana Square which has 80,000 sqm.
Oh, if you’re wondering about whether Aseana City is sinking, or if a Tsunami could wipe it out , the answer is a big NO! Buds clarifies that Aseana was reclaimed by pile driving, and there would be an expected stabilizing process, which is already long completed. And as for being hit by Tsunami, he explains that this can not happen, because Manila Bay is covered by Bataan peninsula, and Corregidor in the mouth of the bay, protects us. There, now you can have Peace of Mind and Safely Invest in Aseana City.