The land company

Alfred Xeres-Burgos III goes to Tagaytay at least twice a week. He is project manager of Leisure Farms, the agro-tourism community being developed by Landco Pacific Corp.

"Our demo farm is having its first big harvest on Dec. 15," he said. The demo farm, which takes up 20% of the total land, is planted to more than 100 varieties of flowers, fruits and vegetables, from the popular lettuce to the less known round eggplants.

Leisure Farms is the result of Xeres-Burgos’ thesis at the Asian Institute of Management. "Landco has this property that was originally meant to be a golf course. With the 1997 Asian financial crisis, we had to rethink our plans. The big question was, ‘How do we develop the property so it will sell?’ An agro-tourism project where the price of a 1,000 square meter farm lot is the price of a sports utility vehicle seems reasonable for our target market, the successful executive who fantasizes about being a gentleman-farmer."

Landco president and chief executive officer Alfred Xeres-Burgos, Jr. was not easily convinced.

"Before we get into a project, we ask the question, ‘What does the market want?’ We give the market what it wants. That’s the secret in property development," he said.

Multi-product

Xeres-Burgos put up Landco in 1990, two years after resigning from Ayala Land Inc. and a month after the abortive December 1989 coup. Although it is now 60% owned by the Metro Pacific Group, Xeres-Burgos continues to call the shots at Landco.

"It’s the only way to run a business," said Xeres-Burgos. "There should be only one boss, one man whose vision the company follows." For Landco, that vision is to be a major developer of projects that create lifestyles and are environment-friendly.

The bulk of Landco’s projects are outside Metro Manila and Metro Cebu. "There’s a lot of money outside Manila and Cebu and not many available superior-value property developments chasing that money. In our areas of operation, we are the major developer," said Xeres-Burgos.

As a rule, Landco prefers to go into a joint venture with land owners rather than to buy the land to reduce up front costs. In the contracts signed with land owners, Landco insists on its one-boss policy where Landco decides how the land will be developed and the land owner or partner maintains a hands-off policy and merely waits for his share of the profits.

ìWhat we offer our partners is planned growth,î said Xeres-Burgos. ìBefore we enter into a joint venture, weíve already done our homework. Weíve talk to our markets and weíve asked them what they want and what they need.î

One joint venture example is the Landco Business Park in Legazpi City, Albay. Metro Gaisano Group of Cebu, which is headed by Frank Gaisano, owned the property in the center of the city. Landco developed the property into a shopping center surrounded by commercial lots.

Another joint venture example is Peninsula de Punta Fuego in Nasugbu, Batangas. Roxaco Land Corp. owned the 88-hectare land. Landco developed the high-end residential resort that is unified by a Spanish-Mediterranean theme.

Right beside it is an ongoing Landco seaside community project, a joint venture with the Pedrosa family called Terrazas de Punta Fuego.

ìDoing a second project beside an finished one makes a lot of sense. We have the infrastructure such as manpower and suppliers still in place. We have a finished project we can show potential customers and partners,î said Xeres-Burgos.

Bottom line

As of October 2001, Landco has generated P1.2 billion in sales, a 31% growth year-on-year. Memorial park lots, which are cheaper per square meter than residential lots, accounted for about 25% of total sales.

ìThis yearís sales growth is largely the result of many projects, which were planned years ago and which are now sufficiently developed for selling,î said Xeres-Burgos.

Landcoís bottom line will also be helped along by a five-year zero debt program until 2003. The companyís debt currently stands at P1 billion, after shaving P1.2 billion at the head office level and P800 million at the project level. It has sold its holdings in residential resort Canyon Woods and has paid off some of its debts to Metro Pacific with properties.

Landco expects next year to be another good year. ìWeíve done well even in bad times because of our strong entrepreneurial spirit and our strong customer focus,î said Xeres-Burgos.

Every Monday, Xeres-Burgos presides over an officersí meeting where project ideas and updates are discussed. It was in such a meeting that the young Xeres-Burgos first raised the idea of an agro-tourism project. He came prepared to answer three standard Landco questions involving money, manpower and market. The 3Ms have never failed Landco.