Real estate firm targets yuppies with 'high-quality' dorms
MANILA, Philippines – Long dominated by a handful of conglomerate-backed property developers, the country's real estate sector has begun to see new players with innovative models coming in to try and shake things up.
Philippines Urban Living Solutions, Incorporated (PULS) is the latest to throw its hat into that competitive ring, driven by the business process outsourcing (BPO) boom.
PULS is backed by California-based Franklin Templeton Investments, one of the largest asset management firms in the world. The real estate firm, in fact, represents Franklin Templeton's first private equity investment in the Philippines.
PULS' offering – a new twist to the typical rental spaces or dormitory-style accommodations for young workers.
The company does not rent out to the workers themselves, but rather to corporate clients, which then offer the rooms to their employees.
The downside to the property boom is sky-high prices around commercial centers, especially Bonifacio Global City (BGC), the Makati Central Business District, and Ortigas. New developments also mean increased congestion.
The combination of the two has pushed the country's growing middle class into the metro's peripheries, priced out of the center, and forced to endure an average of 3-4 hours of commuting everyday.
First established in 2012, PULS focuses on building affordable, 10-20 square meter units close to Manila's business districts to give the country's young middle class more choices through its MyTown brand.
The firm just launched its flagship property, MyTown New York, which offers 700 beds just off Kalayaan Avenue in BGC. PULS also manages 3 other similar but smaller properties.
"The concept was developed to service a growing workforce that pours into central business districts on a daily basis. Our biggest service area is BGC which is projected to have 360,000 office workers by 2018 from just 180,000 3 years ago," said PULS' Filipino-Dutch CEO Mark Kooijman.
MyTown's units range from a 4-bed dorm to a single room, with rental prices starting at P4,800 a month. Each unit comes with a bathroom and kitchenette.
Aside from promising affordability and convenience, PULS has also injected fun into the mix in a bid to attract millennials.
The result is that MyTown New York seems closer to a hip European hostel than a traditional, spartan corporate dormitory.
The building features an infinity pool, a bar and common area, game rooms, KTV rooms, and even a movie theater. For its future projects, PULS plans to add retail shops, restaurants, laundromats, and coffee shops.
Adding these features, while expensive, lets PULS' corporate clients offer the accommodations to their employees as perks.
"This is especially important in the BPO sector which has an extremely high attrition rate, driven in part by the long distances workers have to travel to get to the office. Offering them a fun and hip place to stay would help firms keep their best people," Kooijman explained.
PULS added that staying at a MyTown property would also help increase employees' productivity, as their travel time would be reduced to about 10 minutes.
PULS currently counts 5 firms as clients, including Japanese game development firm KLab Cyscorpions, which has more than 200 staff in the country, as well as the Bank of the Philippine Islands.
With the launch of MyTown New York, PULS now has a little over 1,000 beds spread over 5 projects.
Kooijman said they're aiming to expand to 6,000 beds by 2018, and with that, also considering the possibility of renting to individuals.
Kooijman added that the expansion should also facilitate PULS' plans to go public by the fourth quarter of 2017 or first quarter of 2018.
The firm has received a vote of confidence from local investor BPI Capital, which also serves as its financial advisor, and Franklin Templeton, through the Templeton Strategic Emerging Markets Fund led by world renowned investor Mark Mobius.
Kooijman said that Templeton invested $12.5 million, while BPI Capital's investment was around half of that.
Present at the launch of MyTown New York, Mobius shared he was excited about the continued growth of the BPO market in the Philippines, which would be a boon for PULS.
"If you look at what's happening in the Philippines and particularly Manila, the need for higher-rise buildings that will house people coming from the low-rise situation they have now is there so I'm very excited about this," he said.
Mobius added: "MyTown is the answer. This is one of the most innovative and creative ideas I've seen anywhere in the world. In fact, I think that we need to take this idea worldwide." – Rappler.com