Emmanuel ‘Noel’ Rapadas
Chief Finance Officer
Torre Lorenzo Development Corp.
By Bernie Cahiles-Magkilat
The burgeoning real estate market is a play of strategies. Players have to innovate and provide solutions to make a dent and build a brand that would distinguish them from the rest.
Exactly, that’s what Torre Lorenzo Development Corp. (TLDC) has done. TLDC concentrates in a market for university students. Not only that, it caters largely to premium university living.
With the help of a seasoned Chief Financial Officer Emmanuel “Noel” Rapadas, TLDC grew to become the country’s most distinguished university residences provider. It has also branched out into leisure and commercial developments promoting sustainable business.
TLDC
As a new real estate developer, TLDC set out to become a dedicated builder of communities for emerging affluent and untapped demographic segments. Using both data and an intuitive understanding of the markets they serve, the visionaries behind TLDC anticipate the needs of their target market and develop residential and leisure properties customized to address every requirement to upgrade their quality of life.
In 2000, TLDC pioneered the concept of Premium University Residences bringing college students closer to their schools through safe, comfortable, and accessible living spaces. Following the success of these properties, TLDC expanded its portfolio by widening development formats: building multi-use complexes, townships, and leisure destinations.
Today, TLDC boasts of a wide portfolio of properties nationwide with each classified under three developments: residential, leisure, and commercial.
For residential development, TLDC is famously known for its university residences for students even beyond Manila looking for a place they can call their home away from home; and young professionals or young married families looking to invest in their first condominium.
Its leisure projects are mostly in partnership with Dusit International. These include Davao City’s first five-star residential and hotel development (and first internationally-branded residential development) which houses the Dusit Thani Residence Davao and the dusitD2 hotel Davao; the Dusit Thani Hotel at Lubi Plantation; and the Dusit Princess at Tierra Lorenzo, our urban lifestyle hub in Lipa, Batangas.
For commercial developments, TLDC has 200-hectare master-planned township in Davao called Ciudades which includes a business park, a BPO campus, a world-class football stadium and training center, and retail spaces in one cohesive community that is self-sustainable.
Even as the company diversifies in to hotel and resorts development, Noel said that premium university residency development will always be a core strategy for the company.
“We have innovation upon innovation. So, we build so well,” says Noel noting that they have been able to meet milestones as they have mastered well this niche.
In fact, this business accounts for 90 percent of total and they are building more. Next year, they plan to launch another premium university residence in Sta. Mesa and one more in UST where demand is hot. Another potential launch could be near La Salle Taft. The idea is to have a minimum of two or four launches next year.
“Because of our very successful model, everybody’s going into that and lots are repositioning and we are just riding on the momentum, our brand reputation and brand equity. This is a model that we have perfected,” says Noel.
COMMUNITY
As TLDC ventures into hotel-resort developments, they have already cultivated relationships with the local communities.
“Engagement with communities is part of our corporate social responsibility as we involve local residents either to supply us with requirements for foodstuffs or labor,” say Noel. For instance, in the case of its Lubi Plantation, most of its ground staff and wait staff all of them come from the community of Lubi Plantation in Davao City. TLDC conducts training for these people and assign them to its projects all over the country. That is part of the service to the community,” he adds.
Getting the host community involved with the company’s operations ensure sustainability of the operation.
“‘Our performance scorecard system focuses on the number one goal of sustainability, which means to remain relevant to stakeholder communities, suppliers and end users. When you do that or when you are able to maintain the value people look for in a company then that guarantees sustainability and growth are results of the efforts that sustain business,” adds Noel.
In the case of Lubi Plantation, they have to secure the island so they tap the local community for support by looking into the locals for sources of supply making them productive of the resort. It is a symbiotic relationship.
“We are more serious than that because we are also partnering with the agriculture department to train the community on sustainable fishing and on planting organic vegetables to supply our requirements,” says Noel.
EXPANSION
Following its success in Davao and Batangas, TLDC is training its eyes into the leisure-anchored type of development in the regions like San Fernando, Bohol and Baguio.
Noel noted that the next wave cities are growing fast because of tourism, which is the next growth driver of the Philippine economy as the growth of the BPO tapers off. “That is the rationale why we are going to the next wave cities,” says Noel as he surmised that tourism would be the country’s fastest growth contributor in the next 5 years. “If you look at our neighbors, our tourist arrivals are targeted at 8.5 million this year but that is just one fourth of our neighbors,” he points out.
The government is also building infrastructure projects with international airports in the regions to connect and provide access to tourist destinations.
Noel believes that the growth of tourism is going to catch up with our neighbors. With more seamless transfers now, there are no more problems connecting to Boracay.
The CFO, who looks at opportunities aside from holding the purse says “Now is the time to move.” Noel cited the need to pursue opportunities in cadence with the government’s efforts to modernize and build new infrastructure. When the infrastructure is done in 4-5 years, they are there ready for the market.
The big boys in real estate have not really given the secondary cities much attention. Besides, they should not compete with the big boys who have $100 million anytime. But because TLDC is mid-sized, they are agile and can move quickly. They were the first to invest in Davao long before the big boys came in.
“We do not have the capability of the big boys, but we managed our capital wisely,” he adds. Instead of building one project in BGC where one project can cost ₱5 billion, TLDC chose to go outside where they can build three projects for the same amount at minimal risks.
In terms of branding, it is more efficient to build it all over the country than build a single project in BGC. Its university residences branding feeds into the system that wherever people go Torre Lorenzo comes first to mind.
The company also chose to remain in the upscale university residences development because it is not so vulnerable to economic fluctuations like mass housing. This sector is more resilient.
CHALLENGES
Noel was convinced to join TLDC during its formative years in 2015. TLDC had two projects at that time yet. With a huge background in overseeing the financial and administrative affairs of various industries such as real estate, industrial and manufacturing, Noel went on to craft TLDC’s business plan.
“The mandate is to take the company to a higher level and to prepare a business plan for the medium term,” says Noel, whose job as a CFO also includes strategic planning. Noel made sure that TLDC observes the 3 Cs for sustainability– capability, corporate culture and capital.
“Am now on my 4th year with the company and we’re well on the way of getting there. We have built enough projects to sustain us in the next three years so we are moving further on from 6 to 10 years,” he adds.
Noel has admitted some challenges like land banking and family succession in the next years. On succession, the family-owned business is largely guided by a family constitution to avoid the mistakes of other family businesses that went downhill because of succession issues.
“So, we are working on all phases including governance, board of directors, shareholders agreement, definition of roles, and economic benefits to avoid conflicts,” says Noel noting they have revamped the board to include independent directors and young minds as they must tap technical expertise to be able to leverage on technology.
“We are future proofing so we’re investing heavily on processes in building this enterprise to be just as capable as we are prudent. The idea is to create a lean and mean organization,” he adds.
“I want to build this company on very strong foundations of compliance. I want it to have strong substance,” he says adding, “We started with something to show off not when there is nothing yet because we want to show something solid that we can stand for and we do it with not much fanfare and glitter so people are realizing and appreciating who we really are.”
TLDC continues to improve from a traditional family business to a professionally run enterprise where everyone involved is based on qualifications and accountability.
The good thing about family businesses though is decisions are made faster because you don’t have to deal with thousands of shareholders.
“You just have to very very sensitive with how you deal with family members,” he says adding “I used to deal with Ortigases and now with the Lorenzos. You should know how to avoid landmines.”
“The Lorenzos, they respect professionals. My relationship with Tomas is great.
I have the final say when it comes to financial matters and I have strong contributions on strategy, but he has a big say on product portfolio and positioning. We agree most of the time, he also defers to my professional advice. The siblings are very supportive and we tell them exactly what’s happening not just the good-to- hear news, but also the challenges,” he adds.
THE CFO
A well-bred accountant, Noel has a share of humble beginnings. He traced his roots from an Ilocano tailor grandfather who migrated to Samar. His father, an engineer, used to work with the Lorenzos in Del Monte.
The eldest of seven siblings, Noel is a product of Philippine Science High School. He finished accounting from the University of the East and an MBA from Ateneo De Manila University. He also completed the Strategic Business Economic Program from the University of Asia and the Pacific and the CEO Program from the Singapore Institute of Management/INSEAD School of Management. As a young accountant, he worked with SGV and Island cement firm, property firms of Ayala and the Ortigas.
According to Noel, working in a property development company provides a different kind of high. “The joy of seeing physically what you’ve built is different because I saw first-hand the turnaround because I do the numbers,” says Noel.
Equipped with 35 years of experience as CFO, Noel has become the non-traditional CFO, who moves forward and pulls back controls. Noel is more than just a CFO, but is more of a financial strategist, not single dimensional and short sighted.
“I listen more so I let people talk about their spiels, gather information, understand it from where they stand and get a good picture of what the proposals are, what are their action plan and connect that to overall goal and then start asking the hard questions,” he adds. It is like 60 percent listening, 10 percent engagement and 20 percent asking questions.
At work, he also cultivates the value of empathy as a very important value of a leader. “If you are a strong leader, you have to empathize, understand the other party, what his goals are and align that with the organization’s goals.
Sometimes, it is just an issue of details,” adds Noel, a doting grandfather to two grandkids.
LESSONS
Noel has learned the trade by keeping it simple and avoiding complications because his accountant mind would like to see things in a straight line than be distracted by so many things. He delegates work because it smoothens the journey and lessens stress.
“Keep life simple and nurture relationships, which are more valuable than money, property, and power. Enjoy with your family and friends. I don’t have many friends, but I have real friends beyond mere acquaintances,” says Noel, who credits his wife for being very supportive and a martyr sacrificing her work as an accountant to raise their 4 kids and let him shine instead.
As a professional, Noel aIways believes to work the extra mile. “If you are paid ₱100, deliver more than that because it is something your principals appreciate overtime. If you want to get ahead and move ahead then deliver more than what is expected of you,” says Noel.
“Never tarnish your integrity because other people will have their own perception of you. Finally, find time to relax and enjoy,” adds Noel, who loves collecting art pieces from startup artists, good wines and cars.
A genuine farmer, Noel cultivates a 7-hectare property in Tanay that he now planted to calamansi, cacao, and mangoes. He likewise engaged the local community to help grow vegetables to supply restaurants and supermarkets, and set up camp sites to help the local folks become productive.
“These are things I’ve always wanted to do but cannot because we were busy, but now we can afford some time off as we transition and I go to become a farmer,” he adds.
Nowadays, the role of a CFO holds a position equally important as the CEO. Thus, the success of a company also depends on how a CFO is able to provide good financial advice to the CEO as he corroborates to strategize to achieve the company’s goals.
TLDC is fortunate to have a seasoned CFO. Noel is also equally fortunate to have Tomas as a CEO.