Philippine real estate billionaire Manuel Villar quickly moved on after losing the 2010 presidential election, and now is No. 2 on the Philippines’ 50 Richest list, at $7.8 billion.
Twelve years ago, businessman and senator Manuel Villar was crushed in his bid to get elected as president, winning only 15% of the votes. But that loss didn’t slow him down. He threw himself back into work, scaling up his main business of real estate development. By 2018, share-price gains for his listed companies let him achieve the status of No. 2 on the Philippines’ 50 Richest list, a spot he still holds with a fortune of $7.8 billion.
He was able to achieve that position even as one of the biggest deals of his career—the listing of his first real estate trust in June on the Philippine exchange—delivered an underwhelming performance. The VistaREIT, which held 36 billion pesos ($639 million) of shopping malls and office towers from his flagship Vista Land & Lifescapes, was meant to raise 9.15 billion pesos but Villar got barely half that, raising 4.8 billion pesos in the offering.
Worsening market conditions meant the IPO price was slashed 30% and the number of shares was cut by 25%. Trading began on June 15—the same day the U.S. Federal Reserve hiked U.S. interest rates 75 basis points—which added to headwinds of rising global inflation and geopolitical uncertainties caused by the war in Ukraine. VistaREIT shares ended the day at their 1.75 peso listing price and since then shares have been flat.
Villar shrugs off the IPO’s downsizing and has no regrets about going ahead when the environment was so unfavorable. “It’s hard to predict when market sentiment will turn,” the chairman of Vista Land says. He’s focusing on what he can do in the future with his new vehicle, noting “Now we have a listed REIT [into which] we can inject more assets.”
Property has long been the business pillar for Villar, who has six listed companies including two in retailing, and it has been pivotal to growing his wealth. (His total was $6.6 billion in 2019.) The biggest lift has come from memorial park and housing developer Golden MV Holdings (formerly Golden Bria Holdings), whose share price has increased more than 60 times since its 2016 market debut.
The 72-year-old aims to keep expanding. In the near future, he plans to add a casino, a TV network, a theme park and a toll road to his sprawling real estate and retail empire that includes food chain Chicken Deli and Coffee Project. “I’ll die with my boots on,” Villar says. He’s sitting at a downtown Manila outlet of Coffee Project, a posh cafe chain he started eight years ago to compete with global giant Starbucks. He hopes to list Coffee Project by next year—to help fund a 65% increase of its branches to 200—among other IPOs, including for a power plant on Siquijor Island that’s owned by a private holding company of his.
The tycoon has simple roots. His father was a government employee and his mother a fishmonger. As a child, Villar lived in a rented apartment less than 4km from Manila’s infamous Smokey Mountain garbage dump. Growing up in an overcrowded area and helping his mother sell fish at a public market “made me a tougher person,” he says. “When I was young, I was extremely shy. I had to overcome that to succeed. That taught me how to survive.”
He attended the University of the Philippines, the top state institution whose spacious green campus he describes as “like a dream, paradise,” and earned his bachelor’s degree and masters in business administration. Villar joined a big accounting firm, but didn’t stay as he wanted to be an entrepreneur.
His first endeavor, a seafood delivery service, was derailed after a Makati restaurant he supplied stiffed him, he says, but Villar worked out a discount meal-ticket plan for patrons that eventually let him recoup his losses. He then worked on a World Bank unit set up to back small businesses, which he quit and in 1975 took from it a 10,000 peso loan—today worth about 350,000 pesos—to start a new venture. He bought two refurbished trucks and delivered sand and gravel to housing developers. From customers, he learned the ropes of the real estate business, and entered it in 1977, focusing on low-cost homes. To date, his companies have built more than 500,000 homes.
Persuaded by his father-in-law, a congressman, Villar entered politics and was elected to the House of Representatives in 1992. He eventually became House speaker and then president of the Senate, the first Filipino to hold both posts.
“I’ll die with my boots on.”
Property wasn’t a straight-line success for Villar. His business was nearly wiped out in the Asian financial crisis as his C&P Homes, his only listed business unit at the time, in 1999 defaulted on 16 billion pesos of loans from foreign and domestic creditors taken for expansion. Following a restructuring that took nearly a decade to complete, C&P Homes gave up some properties to repay creditors. They included Bank of Philippine Islands, whose sister company Ayala Land ended up owning and developing a chunk of Villar’s huge tracts of land in Cavite province, south of Manila. C&P Homes was acquired by Vista Land in 2007, following asset injections from Villar.
After getting out of politics following the 2010 presidential defeat, Villar focused on expanding Vista Land beyond residential projects. He engineered the backdoor listing of Starmalls, a chain of indebted shopping malls acquired from his in-laws in 2012 and then injected the assets into Vista Land three years later and renamed it Vista Malls. It now has 31 shopping malls, 69 commercial centers and seven office properties with a combined gross floor area of 1.6 million square meters, providing the group rental income, which increased 30% to 2.6 billion in the first quarter from a year ago after climbing 29% to 9.3 billion pesos in 2021. At the same time, Villar started building his retail and restaurant businesses—including home-improvements retailer AllHome, grocery chain AllDay and Coffee Project—that have become anchor tenants of the group’s malls.
In the short-term, the outlook for Philippine property isn’t strong. Kum Soek Ching, Singapore-based head of Southeast Asia research at Credit Suisse Private Banking, says the environment is challenging, as “higher interest rates and a weak peso will further weigh on an already over-supplied residential market.” But the industry is hoping that pent-up demand, primarily from overseas Filipinos, will continue to fuel growth, notes Miguel Sevidal, an analyst at Maybank Philippines.
Villar’s REIT allows the company to raise capital and reduce its reliance on borrowings at a time interest rates are rising, says Brian Edang, chief financial officer of Vista Land. The developer injected 10 shopping malls and two office towers with a total gross floor area of 256,404 square meters into VistaREIT, equivalent to 16% of Vista Land’s total investment properties. “VistaREIT looks okay. It’s reasonably priced. [Villar] can put in a lot more properties into it and boost the yield,” says Joey Roxas, president of Philippine brokerage Eagle Equities.
Now, in what appears his most challenging project, Villar is aiming to create a big media company. He started with Advanced Media Broadcasting System (AMBS), which in January secured the broadcast frequencies previously assigned to tycoon Oscar Lopez’s ABS-CBN. But it won’t be as easy for AMBS to carve its niche to compete with existing giants in the industry, says Luz Rimban, executive director at the Asian Center for Journalism at Ateneo de Manila and a former broadcast journalist. “Advertisers tend to be very sticky with the dominant networks,” adds Rimban. “It will be difficult to replicate ABS-CBN and GMA 7 given their audience share and viewership.”
ABS-CBN lost its franchise two years ago after the Philippine Congress rejected its application for a 25-year extension. Earlier, then-President Rodrigo Duterte, an ally of Villar, vowed to force it off the air for failing to broadcast one of his ads during the 2016 presidential campaign. Despite pivoting to digital channels—airing many of its shows through streaming platforms such as Amazon, Netflix and Viu plus a content syndication deal with tycoon Manuel Pangilinan’s free-to-air network Channel 5 and cable TV network Cignal—ABS-CBN remains in the red, posting a net loss of 5.6 billion pesos in 2021.
The circumstances surrounding how AMBS ended up with the broadcast frequencies previously assigned to ABS-CBN show how politicized the industry is, Rimban says. Asked whether his foray into the media industry was motivated by retaliation against ABS-CBN—one of his staunchest media critics during the 2010 presidential campaign—Villar says: “I’m in AMBS for business, not for anything else. Revenge—I learned in politics—will get you nowhere.”
Overall, the Philippine media industry is booming despite the pandemic-induced economic slowdown and increasing competition from social media. Advertising revenue climbed an average of 9% annually in the past two years to reach a record high of $3.9 billion in 2021, according to Statista, which expects the industry’s sales to increase to $4.3 billion this year and $5.2 billion by 2025. “The opportunities in the media industry are very exciting,” Villar says, adding that he sees many synergies between AMBS and his other businesses. “I believe in the power of communication. That is the future.”
AMBS—which aims to start broadcasting this year initially in the Metro Manila area—has recruited celebrity host Willie Revillame, whose game show Wowowin could help the media company win prime-time audiences. While AMBS plans to import popular TV shows from China and Korea to carve its own niche in the media industry, Villar says his long-term goal is to create a Philippine version of Walt Disney Co.
By taking a page from Disney and combining his real estate expertise with media, Villar wants to focus AMBS on leisure and entertainment such as theme parks. He’s already developing his first amusement park on an 80ha site in the southern Metro Manila municipalities of Las Pinas and Paranaque near the country’s main international airport. The theme park will be part of a mixed-use property that will also have a casino resort, a shopping mall and a hotel when completed in a few years. No details are available on financing the project, for which Villar is looking for partners. “Partnerships are inevitable to grow big,” he says. “We are willing to partner with anybody provided it makes sense.”
In the near future, he plans to add a casino, a TV network, a theme park and a toll road to his sprawling real estate and retail empire.
Despite these new projects, Villar says real estate will remain his core business. After turning Vista Land into the country’s biggest developer of landed-house developments, Villar is shifting the group’s focus on building upscale homes and residential towers, which accounted for less than 20% of its total residential sales of 17.4 billion pesos in 2021. Vista Land aims to develop 62 townships—comprising high-rise residential condominiums, office towers and commercial properties—across the Philippines on about 1,500ha of prime land in its existing masterplanned communities. The company has an additional 3,000ha of undeveloped properties across the archipelago.
Vista Land aims to transform these properties into middle class and upscale residential enclaves now that real estate prices in the country have gone up, Villar says. Prime property values in Metro Manila’s key business districts, which tripled to over 250,000 pesos per square meter in 2021 from about 80,000 pesos two decades earlier, are likely to continue appreciating as the government builds roads and other infrastructure facilities, property consultant Colliers said in a May note. “Villar has been in the real estate business for so long,” says Luis Limlingan, managing director of Makati-based brokerage Regina Capital Development. “I’d like to think that he’s got the right strategy.”
As Vista Land pivots into these high-end residential projects, Villar expects the company’s sales to remain subdued. After peaking in 2019 at 42.9 billion pesos, Vista Land’s total revenue dropped about 30% over the past two years to 29.6 billion in 2021. While it will take time before the numbers return to pre-pandemic levels, some analysts are already seeing green shoots of recovery, with residential reservation sales climbing 5% to 16.8 billion pesos in the first quarter after rising 9% to 58.6 billion pesos in 2021.
Villar laments that Vista Land shares are, in his view, undervalued. The stock trades at about 0.22 times book value, compared with other midtier developers such as billionaire Andrew Tan’s Megaworld, which is 0.37 times, and tycoon Lance Gokongwei’s Robinsons Land, with a multiple of 0.68 times, as of mid-July.
In a bid to increase the value of Vista Land’s properties, Villar is also venturing into the toll road business, with the 3.9-billion-peso acquisition of Ayala Corp.’s stake in the Muntinlupa Cavite Expressway, which he aims to connect to tycoon Manuel Pangilinan’s Cavite Laguna Expressway to improve access to his properties in Cavite province, south of Manila. Vista Land has developed several residential communities in Cavite, a beneficiary of the many infrastructure projects Villar advocated when he was a senator.
Vista Land recently started marketing its most luxurious development, Lausanne at Crosswinds, a collection of villas in Tagaytay, 70km south of Manila.
While clearly signaling that he has no intention to retire, setting a goal of doubling the number of homes built by his companies to one million in his lifetime, Villar believes his children are capable of taking his business empire further. “All my children—Paolo, Mark, and Camille—possess the values, skills, and more importantly, the temperament of good leaders to take over our company,” he says. “They have, at one point, assumed leadership roles in the company, and, in their respective fields. So I am very confident they can easily fill that role.”