JOSE MA. G. MONTINOLA President KEYLAND CORPORATION

Keyland, a relatively start-up company having started only five years ago, is a real estate development company that knows how to strategically position itself amid a myriad of giants and run-of-themill developers taking advantage of a robust market.

At the helm of its strategy is Jose Ma. G. Montinola, a finance man, who steers a steady course towards the company’s vision.

THE COMPANY

Keyland has a mission to develop strategically located projects and communities in key strategic locations in urban centers, build homes with uncompromising quality, and continuously innovate to meet the needs and demands of its target markets, thereby improve the quality of life of residents living in its communities. By its name, Keyland signifies a key to a new home.

Keyland’s group of investors is led by its chairman Rex C. Drilon II. They are a group of progressive and dynamic professionals highly accomplished in their respective fields. Collectively, they have a breadth of knowledge and experience, especially in the fields of property development, property management, banking, corporate finance, and investments.

As a property developer, it moves with calculated steps. The group first foray in the office leasing business before dabbling into the residential condominium building.

Keyland is behind practical and reliable developments such as Casa de Sequoia, Signa Designer Residences, and Southkey Place. Their expertise extends to multi-functional structures including Keyland Plaza, Keyland Center, and Keyland Ayala Building.

OFFICE LEASING

Given the growing number of property developers, Keyland decided not to meet the competition head on. Instead, it went into the development of office buildings for lease. They saw this potential with the growing number of BPO and call center companies locating into the country. This was an equally great opportunity.

The company hit the ground running by acquiring existing buildings in the Makati central business district that they renovated and leased out after. The business model was a big success as Keyland was able to lease its office building within 9-12 months after completion.

In the office leasing business, Montinola said the most important thing to consider is location. An office building must be located in an area with good transportation access and a good commercial area component.

RESIDENTIAL

Once they have established their footprint in the office buildings business, Keyland dabbled into the residential condominium ventures. Signa Designer Residences located in Makati was its first residential condo project in joint venture with Robinsons Land.

This was followed by its Las Piñas project Casa de Siquoia with six buildings inside the compound and a commercial strip at its frontage.

Montinola soon realized the difference between office leasing and selling residential condo units.

“It is so easy to lease out office spaces, but selling is a different thing because there are so many players given this influx of people wanting to be developers,” says Montinola.

So, Keyland has strategized to offer something different all the time. They cannot just offer another condo.

For Casa de Siquoia, Keyland developed condominium buildings for the R3.2 million-market with a unique promise of providing an exclusive community to its residents. To do that, the masterplanned community must have lower density population by constructing only a small number of units per building.

“Most residential condominiums have very high density. What is the quality of life when you walk through the door and it is so crowded. So, we decided to offer something affordable, but with exclusivity,” he adds.

With that in mind, Keyland ventured into the development of small buildings. For instance, they built 3 to 5-storey buildings with 8 units only to a floor, meaning a unit owner has only 8 neighbors in his floor.

“Our biggest has only 15 units to a floor,” he says. That was the main marketing pitch.

Aside from the exclusivity thrust, Montinola said Keyland only delivers quality products in a price range that is better than what its competitors are offering in terms of materials and quality.

“It turned out well, we just had to get our first building off the ground,” says Montinola.

In addition, Keyland decided to build the first four buildings even without any pre-selling. When the market learned about it, the project gained traction. When the first building was completed, it was already fully sold out.

Keyland is now winding down at its Casa de Siquoia project with only 60 units left. There are six small buildings with a total of 300 units or 50 units per building on the average inside the one-hectare compound.

“We were recognized because of that concept and was awarded by the Philippine Property Awards and won the Best Affordable housing in the Philippines because of our overall concept,” says Montinola.

Initially, Montinola said, they had to sacrifice margins, but remained profitable. Their sacrifice paid off because it enabled them to enter the market and became known for its affordable and quality product.

Meantime, they kept on acquiring office buildings because it gives them the regular cash flow.

Then they explored Alabang in North Gate where they build two projects, one for a brand-new office South Key Hub and a condo project.

These buildings are unique because they are located in a PEZA Zone with 30,000 employees working in the zone.

The office building, which is already completed, is serving PEZA zone locators while the condo building, which construction is still ongoing, is for the workers, who commute from Laguna to Alabang. Workers can save on their transport expenses and can share a condo with fellow workers.

The condo building offers 16 square meter studio units, and are designed to accommodate bunk beds for five people. It is semi-furnished with bunk beds and cooktop.

There are only 400 units in the two towers so the density is 15 to a floor. It is a good investment because it gives an investor 8-10 percent a year based on the prevailing rent of R12,000 to R15,000 a month for a studio unit in Alabang. It clicked with 70 percent of units already sold within 18 months from launch.

The Alabang condo is largely bought by investors because most workers cannot still afford it, but the Las Pinas project is owned by end-users.

The latest Keyland project is Citadines Benavidez Makati. It is a tie-up with The Ascott Limited, world’s leading residence owner-operator with more than 300 properties in over 100 cities spanning more than 25 countries across Americas, Asia Pacific, Europe, and the Middle East.

Montinola said they prefer to do business in Makati because there is always an opportunity there. Since all the major players are there, Montinola made sure they only come up with the best that they work with foreign designer AEDAS, an international designer firm responsible for the Marina Bay Sands.

“Makati is a different ballgame altogether,” says Montinola, who liked the concept of Ascott’s serviced apartment.

Citadines Benavidez Makati is the centerpiece of 110 Benavidez where Keyland is pouring in R1.5 billion for this project.

The new project brings contemporary and luxurious sanctuary to life with essential amenities, including a roof top infinity pool, pampering the dweller.

Citadines Benavidez Makati offers potential residents studio units (R7.5M), 1-bedroom units (R12.5M), and 2-bedroom units (R15 M).

Under the current business model, Ascott will manage the property, but Montinola wanted to tweak that a little bit. He suggested to sell the fully furnished units to investors and Ascott to manage these units from leasing to upkeep because it is easier for an investor to buy a fully furnished unit and have a professional manager manage and lease it than for an investor to lease it by himself.

“An investor leasing his unit will have a hard time looking for a broker, competing with anybody in the building for leasing and there are some months with no lease and if something breaks down who will do the repairs,” he says.

All these headaches can be avoided if investors allow Ascott to manage their units. Ascott is the world’s biggest property leasing management company so there is nothing to worry about as they tap into their global network.

Ascott will just receive a percentage of revenue a year for upkeep of the property to ensure the units are well maintained at international standards. An investor has a 15-year leaseback and within the period covered, the owner is given 10 free nights a year.

So far, market reception has been very good, considering the property was just launch in June this year.

True to its low density thrust, Citadines Benavidez Makati will have only 209 units but only 140 units are for sale, the rest will be kept by Keyland. So far, the units are 70 percent sold out. Delivery of these units is by 2022.

BULLISH According to Montinola, both the office leasing and residential business are doing good.

“It is always good to have the leasing component because we don’t know how long the residential market demand can be sustained although I don’t see any correction coming,” he says.

There are also good opportunities in the tourism business as long as government delivers its commitment on infrastructure, roads, and airports.

“For as long as the interest rates are low, the peso does not depreciate so much, the OFW remittances are strong and the economy continues to grow 6-7 percent a year, I think we are okay,” says Montinola adding that demand for housing continues because the OFW is a very solid market for developers, especially in the provinces.

For Keyland, which Montinola still considers a small player, they will always spend a lot of time thinking how to come up with good products to support its goal in the next 10 years. The aim is to build 3-5 projects a year.

“We want to be a significant player in the market in the next 5-10 years,” says Montinola. At present, it has 4 condo buildings, five office buildings and four properties up for development.

This may not be much compared to Ayala’s, but still their accomplishments have put them in the radar in that short period of time.

“This is a lot for a start-up, but for the big boys that’s peanuts,” says Montinola, who grew up in Bacolod and of Spanish origin, but went to college at the University of the Philippines.

Despite everything that is happening in the political arena and the security issues in the country, the headwinds are so discounted, this is so reassuring.

“This means the business community is mature enough. There are foreigners coming in and looking for opportunities and investments,” says Montinola.

In fact, Keyland’s office buildings are all fully leased out which he attributed to a function of good location in central business districts. It is also good to work with BPOs because there are fewer tenants to deal with.

“We are acquiring and always looking at expanding our portfolio,” he adds. Outside of Metro Manila, Keyland has a 35-hectare property in General Trias in Cavite for horizontal development.

As Keyland continues to build, Montinola said they will remain in the affordable mid-range market for quality housing and office spaces.

VALUE FOR MONEY “We just want to be known as a company that builds value for money products and good investment,” he adds citing that its office buildings are rated A and B plus.

“For a five-year old company, I think we’ve done a lot but I think there are still opportunities, we just have to patient,” says Montinola. Keyland is also strengthening the organization, which has a total of 150 people.

Montinola, who used to be with SGV & Co. and the banking sector, said he decided to venture into the property sector in 2012-2013 because their investor group saw opportunities in this area.

“My background has always been number driven, but I always tell my team that in this business selling is the most difficult part because you can always build but can you sell what you’ve built. That is why we spend a lot of time brainstorming on what can sell because we have a reputation and people say ‘Oh I’ll buy because it is Keyland’,” says Montinola.

“We are grateful that people know who we are,” says Montinola, who also saw the vision of their chairman Rex Drilon II, who was responsible of bringing him into the group.

Montinola said he liked what he is doing because he wanted the challenge of building. He recalled the difficulty during the first two years when he started building the organization and hiring people.

“What I did in my first two years was to attend all the meetings. I attended meetings for construction on site, purchasing, sales because I have to learn the business. I won’t miss a meeting because I don’t even know the terminologies, and what all the engineers were talking about so I asked them to explain it to me. Now I know if somebody is pulling my leg, but it is very rewarding when a project is finished and buyers are happy and living there already. We have a very lean organization, but with very good chemistry and team work. We’ve made mistakes, but that is part of learning,” says Montinola.

He is proud of its design consultants saying they only get the best architects and engineers.

Among industry players, Montinola would like Keyland to aspire to become the next Ayala in the future.

Keyland’s assets may be valued around R10 billion while revenues are expected to hit R1 billion by next year, half of which from selling condo units and half from leasing. CAPEX for this year is R1 billion considering it just launched the Citadines Benavidez Makati.

FULFILLING

Having shifted into the real estate business from the financial sector, Montinola said it has been fulfilling five years for him.

“It is fulfilling in a sense when you see customers happy with what they bought from me,” he says.

“I am probably through with my finance career, but it is fate that brought me here and I am happy where I am today, I took that leap five years ago, no regrets,” adds Montinola, who reports for work before 8 a.m. to answer emails before meetings start for the day.

Montinola is also an action man. “I have a philosophy that if I think of something, I should do it now, call them now, don’t wait for later, or if need to instruct someone do it now because that something is one item off your list,” says the father of two high-school daughters.

The family man makes sure he joins his family for dinner at home and plays golf on Saturdays while Sundays are reserved for family unless there are sales activities.

As a manager, he said, “I’m not on top of my people all the time, but I am very task oriented.”

A stickler for structure, Montinola brings with him a small notebook where he writes down important items and things he needs to do. He holds regular meetings with Mondays reserved for management committee meetings to set the tone for the week.

“You can walk into or just barge into my room, no need to tell my secretary. I always tell my staff that my line is open 24x7,” adds Montinola, who gives his people free-hand in implementing their tasks.

Among all traits of an employee, there is only one particular value that Montinola demands from his people: Integrity is non-negotiable.

With that, Keyland is charging towards brighter future ahead.