On going where few dare to tread
DoubleDragon Properties chair Injap Sia II shares thoughts on venturing into new territories
Edgar “Injap” Sia II, chair and CEO of DoubleDragon Properties Corp., is expanding his interests at breakneck speed. His company’s four pillars of growth are provincial retail leasing (CityMall), hotels (Hotel 101, Jinjiang Inn), office leasing (DoubleDragon Plaza/DD Meridian Park, Jollibee Tower) and industrial warehouse leasing (Central Hub)—all projected to double their leasable space from some 600,000 square meters in 2018 to 1.2 million sqm by 2020. Back in 1999, he was awarded the Mansmith Young Market Masters Awards for the suc- cessful establishment of Mang Inasal, the first barbecue fast food restaurant in the Philippines.
He has since sold his shares in Mang Inasal and is now focused on exploring more fields. Here, he shares his insights on real estate.
Q: When you were just 19 years old, you built your first hotel in Iloilo together with three other friends. Can you share with us lessons you learned from this early real estate venture that you are able to use now to benefit DoubleDragon Properties?
A: We learned through firsthand experience many aspects of the business, from spotting the opportunity, to scouting for the right location, to preparing the project plans and permits.
At 19, we started a new business with no previous business experience, so we just had no choice but to learn as we go, ask, observe and calibrate along the way. Looking back, I think it is very important to really plan well, to deeply know the industry you are entering, to execute passionately and anticipate ahead all the possibilities.
I also think it is very impor- tant to always keep an open mind to learn, and to work with your team and partners to complete all the gaps that you may have along the way.
I also learned then the power of real estate value appreciation, if you carefully acquire the right property at the right time, your underlying string of hard asset value can grow 10-fold in 10 years, that excludes the rental income you generate from the property year on year.
But it is very important to acquire the property at the right time and at the right location, and acquire just few years before everybody else starts to buy in the same areas.
Q: You spotted the white space opportunity of community malls in third class cities while you were visiting or scouting for provincial sites for Mang Inasal. What did you notice about the potential of the different market segments of community malls within the third class cities you entered?
A: As a country moves up and evolves from third world to first world, the various frag- mented industries gets formalized one by one.
For example, the transition from traditional retail to modern retail waswell felt in the large Tier 1 areas of Metro Manila between the 1960s and the 1980s, while mediumTier 2 areas such as Cebu, Naga, Iloilo, Baguio, Bacolod, Cagayan de Oro saw the first modern malls open in their regions between the 1990s and the 2000s.
Smaller Tier 3 areas such as Cotabato, Kabankalan, Kalibo, Koronadal, Danao, Boracay, Sorsogon, San Carlos, Capiz, Dipolog and over a hundred more similar markets in the province are only just starting to experience this transition, with CityMall at the forefront of it all.
Q: You frequently talk about the importance of knowing the terrain. What exactly do you mean by that?
A: I firmly believe that it is very important for an entrepreneur to study and deeply understand the business terrain before you embark on your business stint.
Because generally these industries are already dominated by the established players, so you really have to go deeper in understanding the specific industry, and try to peel off the superficial layers so that you can try to see if there are gaps that you can anchor on to enable you to create a new category within the industry.
Because if you will just build another of exactly the same as what the established players are doing, it will be too late to compete with them.
I think the key is to find transitions that are just starting to form, coupled with the approaching presence of the other elements that will make the evolution happen.
That way, once the transition becomes more visible, your business model is already there right in the middle of it all, ready to capture and reap the longterm benefits. Josiah Go is chair and chief innovation strategist of Mansmith and Fielders Inc. For full transcript of this interview, as well as his interviews with other thought leaders, visit www.josiahgo.com