The Ortigas clan stages a business comeback
BULL MARKET, BULL SHEET - Wilson Lee Flores () - December 19, 2005 - 12:00am
One of the country’s most venerable Hispanic clans is staging a remarkable comeback in Philippine big business after decades of quiet existence as a major landowner. The clan is well-known for subdividing and selling off prime lands all over San Juan, Mandaluyong, Pasig City, Quezon City and other areas, which were once part of its sprawling 4,033-hectare Hacienda de Mandaloyon.

The Ortigas business house has survived two major corporate breakups (withdrawal of Vicente Madrigal from the Ortigas & Co. in 1956 and the withdrawal of the Ramirez and Lanuza cousins with 42 percent shareholdings from the firm), World War II, martial law and the various EDSA uprisings. Instead of fading away into oblivion like many of the once mighty business clans in the Philippines, this Filipino family of ethnic Spanish heritage seems determined to once again become a dynamic business force in the 21st century with a new vision, new risk-taking spirit, entrepreneurial drive, a very good professional management and new ventures.
Blessings In Disguise
Some of life’s most disappointing setbacks can lead to possibly greater successes in the future, becoming unexpected blessings in disguise. Never quit. Never stop dreaming. Five years ago, the failed bids by the country’s biggest conglomerates for purchase of their 16.5-hectare Greenhills Commercial Center was a blessing in disguise for Ortigas & Co. Limited Partnership. In 2000, the Ortigas family invited the Zobel-Ayala clan of the Ayala Group, John Gokongwei Jr. of Robinson Land and Henry Sy of SM Group to bid for both the Greenhills Commercial Center and another 18.5 hectares at the corner of Ortigas Avenue and E. Rodriguez Jr. Avenue (C-5) in Barangay Ugong, Pasig City. Only the Ayala and Gokongwei groups submitted bids, but they were unsatisfactory to the landowning family.

After the failed bids, the firm in 2001 decided to revamp its organization, hired Rex Drilon II from Ayala Land, professionalized its management and redeveloped its properties. Greenhills Commercial Center (GCC) gradually underwent drastic beautification and new construction, while the 18.5 hectares Pasig property is now envisioned to be Frontera Verde with its initial phase being the opening this year of the three-hectare Tiendesitas shopping area. Under the enlightened leadership of Atty. Rafael "Rafa" Ortigas Jr., grandson of the late founder Francisco Ortigas, the firm has totally changed its outlook and corporate performance. The firm has tripled its size in the last four years, outperforming its rivals among commercial center operators in revenues and profitability. HSBC owns one-third of the firm, with its CEO Warner Manning serving as vice president of the firm.

The new look of GCC includes the posh The Shops, Theater Mall, The Promenade, Connecticut Car Park Arcade and Annapolis Car Park. GCC is now a direct competitor of the Greenbelt commercial center of the Ayala Group in Makati City in the high-end shopping market. SM Megamall in Mandaluyong occupies two hectares of land, while Robinsons Galleria, The Podium and Eastwood City have smaller shopping areas.

According to GCC general manager Joey F. Santos, gross rentals for the center will hit a record P900 million this year and they are targeting a minimum of 10 percent growth next year despite the hard times. The Concepcion family has recently ended its lease of Virra Mall, which the firm has renovated into the trendier V Mall, with five SM Group stores opening last Dec. 15. In 2007, Ortigas & Co. will also take over Shoppesville from the Music Museum Group.
P665 Million In New Investments In 2006
Once the owners of the 4,033-hectare Hacienda de Mandaloyon, which was once part of the friar lands controlled by the Agustinian religious order in the Spanish colonial era, Ortigas & Co. sold off most of its landholdings as subdivisions known as Capitol, Wack Wack, Greenhills, Valle Verde and Greenmeadows, to John Gokongwei Jr. for Robinsons Galleria, to Henry Sy for SM Megamall, 30 hectares to the Unilab Group of self-made taipan Jose Yap Campos, to AIC Realty of the Tan Yu Group, the Shangri-La Group, Asian Development Bank and others. Today, Ortigas & Co. still owns 100 hectares of prime land, plus 200 hectares of lands in Angono in Rizal controlled by its cement subsidiary, Concrete Aggregates.

Ortigas & Co. recently sold a one-hectare lot in Ortigas Center near Asian Development Bank to the fast-growing Christ Commission Fellowship (CCF) Protestant church group founded by ethnic Chinese entrepreneur and pastor Peter Tanchi. The selling price and terms were special due to the religious and non-profit nature of CCF. The firm also sold a prime 2,000-square- meter lot to John Gokongwei Jr. last month for his Robinson Land’s East of Galleria condominium project. The centrally located Ortigas Center in the heart of Metro Manila has a total area of 100 hectares, which is also the headquarters of Meralco, the Lopez/Benpres Group and others. Ortigas & Co. still owns three hectares of prime lands in Ortigas Center, which could accommodate a dozen buildings in the future.

Ortigas & Co. next year celebrates its 75th anniversary, with its owners and professional managers planning to invest in new projects and total capital expenditures of P665 million regardless the political situation in 2006. Apart from founder Francisco Ortigas Sr., a prominent lawyer of Spanish descent, his other co-founders and original partners included his Letran schoolmates Vicente Madrigal (whose family’s share of the landholdings became the present-day Corinthian Gardens) and then Senate President Manuel L. Quezon. Not content with its past of only subdivising and selling off lands, the firm also plans to get into real estate development in 2006 starting with a townhouse complex, according to real estate division head Cathy Ko.

Ortigas & Co. chief operating officer Rex Drilon II said: "We’re the Ayala of the north. The Ayala Group has gone to many other things but we’ve stuck to real estate. We shall become more dynamic with new investments, new ideas and new initiatives in 2006. I think we have experienced decent economic growth this year in spite of the many political problems. If we are able to resolve our political issues, can you imagine how the Philippine economy can really take off? If our political environment deteriorates and results in the demoralization of the people, then the economy will stagnate. With or without political tranquility, we need more business people to invest. You can curse the darkness and do nothing or go up to the mountains in rebellion, but we at Ortigas & Co. want to light a candle and invest more next year."

Throughout the history of free enterprise, the crucial difference between great entrepreneurs and ordinary business people is that the former know how to seize unparalleled opportunities during grim crisis situations in order to break away from the pack and to excel. The Roman epic poet Virgil almost 1,900 years ago said: "Fortune favors the bold."

Instead of just hosting a fancy bacchanalian feast or harking back to memories of past glory, the Ortigas & Co. is planning to celebrate its 75th anniversary next year in July by dramatically increasing its new investments. If the once quiet Ortigas clan is bullish about the Philippine economic prospects for 2006, regardless the chaos and shameless corruption of our many politicians, shouldn’t all our entrepreneurs and business groups also do the same by investing more now?
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Thanks for all your messages. Comments and suggestions are welcome at wilson_lee_flores@yahoo.com, wilson_lee_flores@hotmail.com or P.O. Box 14277, Ortigas Center, Pasig City.

AMP AYALA GROUP CENTER FIRM GREENHILLS COMMERCIAL CENTER GROUP NEW ORTIGAS ORTIGAS CENTER PASIG CITY
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