Success secrets of Globe Asiatique Realty's Delfin Lee

I think we’re having fun. I think our customers really like our products. And we’re always trying to do better. — Steve Jobs

Success is not just good luck. It’s a combination of hard work, good credit standing, opportunity, readiness and timing. When opportunity comes, you have to be ready to embrace it. Otherwise it goes to somebody else. Also, success will not last if you don’t take care of it. — Henry Sy

One of the Philippines’ dynamic business trendsetters and a visionary leader in the fast-growing housing industry, 54-year-old Delfin Lee of Globe Asiatique Realty Holdings Corp. (GA), is bullish about the economy in this Year of the Tiger. “Especially if the May election is orderly and politics continue to be stable,” he says. Lee also has a TV show called GA Report every Thursday at 10:30 p.m. on ANC.

Although his late grandfather was a close uncle and business colleague of my late father, Delfin Lee has the audacious, pioneering spirit of a self-made man and has charted his own path in housing. This first half of the year, as his vote of confidence in the “exciting, long-term future of the Philippine economy,” his Globe Asiatique is set to hold its initial public offering (IPO) at the Philippine Stock Exchange and raise up to P3 billion with BDO Capital as his lead underwriter. 

At his corporate headquarters high above Ortigas Center in Pasig City, Delfin Lee gave us this exclusive interview, in the presence of eldest son, GA executive vice president Dexter L. Lee and his sister, GA vice president for sales and marketing Divine Lee. Here are excerpts from the interview:

THE PHILIPPINE STAR: As one of the leaders in Philippine housing and a top investor, how do you assess the prospects of the Philippine economy this year?

DELFIN LEE: I’m optimistic the Philippine economy is going to continuously grow, as long as we’re politically stable, as long as politics do not get in the way.

Among the many presidential candidates, who do you think is the best?

For the May election, I hope that we wisely elect the right person.

More than your amazing success in housing, I’m most impressed with your xiao sun, or filial devotion to your parents, whom I know very well as good persons. Is it true you recently built and donated big public schools to honor them?

Yes, in January 2008 with both my parents present, I donated the P70-million Don Antonio Lee Chi Uan Integrated School in Bacolor, Pampanga. Then, on Jan. 25, 2009 — a week before my late mother became critically ill with leukemia — I donated the P70-million Doña Asuncion Sy Lee Integrated School in Mabalacat, Pampanga. Sadly, due to my mother’s cancer, she could no longer attend the ceremony. I rushed a big photo of the school to bring to her hospital bed on April 4, then she passed away on April 5. Both schools we donated to the Department of Education and Culture (DECS) for the benefit of Pampanga residents; both are located in our two residential township community projects called Xevera Bacolor and Xevera Mabalacat.

Why are you doing this IPO now, apart from your being bullish about the Philippine economy?

We’re doing this IPO of Globe Asiatique because we want to go nationwide with our unique concept of developing the Xevera townships, which will provide affordable, integrated, holistic and good-quality residential and recreational communities.

How and when did you get into the housing business?

As a kid growing up in the family business, I saw the kids of our workers, how they had suffered from economic bondage and lacked educational opportunities to improve their future. I believed that they needed to be given better living conditions and a better environment, so my first housing project in 1994 was actually a socialized housing project for my employees in San Mateo, Rizal.

How many affordable houses did you build then?

I was planning to put up houses for my 300 employees, so I provided them more amenities and better-quality construction than what the law on socialized housing required. Due to our better quality, many other people wanted to buy the houses, so I ended up building 3,500 houses and that was our beginning in this exciting industry.

Why the name Globe Asiatique?

I chose the name because we want to be global in thinking and standards of quality; at the same time we’re excited about being Asian.

When was the turning point in your dramatic business growth and why?

With the success of that first project, I realized that there is a huge demand for affordable housing in the Philippines. Lots of people want to own their own house. It was until three years ago, in 2007, when the situation became even more favorable, with interest rates dropping to seven percent for the housing sector. The affordability issue for housing was resolved; this created an even bigger demand. We found out that this market segment of the Philippine realty industry is very much underserved.

By saying it is underserved, can you give us statistics, like how big is the backlog in housing?

Based on government statistics, there is a shortage of 3.8 million housing units — that is how big the backlog is in our society.

What about the growth of this backlog?

That’s another thing: the new demand for housing is increasing by 500,000 every year.

What are your success secrets as a top housing developer and businessman?

It’s because we follow the market, we know the market well and we understand the market.

When you say segments, can you share how many and what are the various segments in the Philippine realty industry?

First, there’s the super-premier segment — houses costing P40 million and above such as those in Forbes Park, Alabang, Corinthian Gardens, and others. Second is the upper middle-class — houses costing P10 million and above — located in Metro Manila, also Alabang, Fort Bonifacio, Makati, and other places. Third segment is the middle-class housing or open housing, costing between P3 million to P10 million. Fourth is low-cost housing, costing P1 million to P3 million each. Fifth is economic housing, costing below P1 million each. Sixth is socialized housing, costing a maximum of P400,000 each.

We at Globe Asiatique focus on three of these market segments in Philippine real estate — the low-cost, economic and socialized housing segments.

What about your three GA condominium projects along EDSA?

Those are middle-class, but the growth area and where GA is focusing on is in the economic and socialized housing segments.

How big are the economic and socialized housing segments out of the total business of the Philippine realty industry?

These low-cost and socialized housing sectors comprise about 95 percent of the whole market pie of Philippine real estate, that’s why with this IPO, GA will expand nationwide into more provinces throughout the country.

How much will your total investments be for the GA Sky Suites? How tall is it?

That building alone is valued at P4 billion. It will be 60 stories, the tallest in Quezon City and also the tallest along EDSA.

What are examples of your new projects?

We have plans of putting a Xevera in Zambales, we’ll build around 17,000 houses there on 100 hectares of land this year. Also, we’re developing Xevera Neo Calapan in Mindoro — we’re building 5,000 houses on 45 hectares of land also this year. In Negros Occidental, we have plans for a Xevera Bacolod, where we got the land for La Salle Bacolod because we’re transferring their elementary and high school to better and bigger buildings at a new site. At Xevera Bacolod, we’re building 8,000 houses on 88 hectares of land. We start this year and will launch it next year, 2011.

What is the average price of your Xevera houses?

Only P750,000 each, which is only P5,600 monthly amortization if a person borrows from Pag-Ibig Fund. We give free education for the kids of our buyers, free tuition fee and no need for public transport costs because of schools in the Xevera townships.

How much are your sales in one township and how fast do you deliver? Because many developers are slow in delivery.

I’d like to cite Xevera Mabalacat as an example. From January 2009 to April 2010, we at GA finished and turned over 6,500 houses totaling P5.5 billion in sales. We sold and delivered that in a span of 16 months.

How is Globe Asiatique different from most of your competitors, especially the other big developers?

I believe the big boys cannot follow me there or enter there, because of their higher corporate cost structure. I follow the age-old Chinese way of doing business, which is earn only low profit margins, but have faster turnovers and bigger volumes. Many of the big developers need to have higher profit margins.

Success secrets of GA?

Know the needs of the market and serve them well, know your costing, deliver on time, and put in more amenities, infrastructure and quality than what your customers would expect from you.

Who are the businessmen in the world you admire the most and why?

Of course I admire Henry Sy, because the guy is an immigrant who is a remarkable, self-made man. He will move ahead when others are scared or running away. That guy is gutsy when others are scared. In business, Henry Sy doesn’t follow trends, but he is a trendsetter. My vision for GA: I want GA to be the SM of Philippine housing.

What about a businessman abroad, who do you look up to?

I admire Steve Jobs of Apple, because he can create something from nothing. He is an innovator, a creative genius.

What is your philosophy in life?

Live your life to the fullest and make sure that when you leave this world, that you will leave the world in a better condition than before.