Wealthy foreigners are buying condominium units in the Philippines, with some of them snagging entire floors of high-end residential buildings, as a form of investment, says Abigail Tabuchi-Sumida, who has discovered a new industry out of this real estate trend.
Sumida, a charming Filipino-Japanese entrepreneur who leads companies engaged in consultancy, real estate marketing and restaurant businesses, says foreign buyers of condominium units in the country are away most of the time, leaving their condo units idle for months, if not years.
She decided to talk to the foreign owners of the condo units and broached the idea of her company managing the units for short-term and long-term lease in exchange for rental dividend. Her proposal was warmly accepted, and the result is Versailles Stay, the first brand of rental management for high-end residences in the Philippines.
“We offer to manage the properties that they will purchase. Because they are not here, no one will maintain the units, no one will pay taxes and the association dues on time. That’s why Versailles Stay was born,” she says. “I think we are the first.”
“We just put a name for the service that we want to offer, which is rental management and property care. We have decided to use the name Versailles Stay. This is a new concept, a new market,” she says.
Sumida describes Versailles Stay as a rental management solution for fully furnished, high-quality residences offering dependable property care for unit owners and developers and value-for-money, convenient stay for guests.
On what makes Versailles Stay different from the services offered by online booking agencies, Sumida says: “We have presence in the building. Versailles Stay is in the building to take care of guests 24/7. If you book online, then you go to that property by yourself, nobody would assist you. Nobody will offer services like we do. We are there to really face the clients who book. With Versailles Stay, we have security. It is the presence,” she says.
Sumida is the chairman of Versailles Stay, a partnership between her company, CapitaRise Property Management Inc. and FPD Global Integrated Services Inc., which is led by Joel Perez.
Perez, who serves as the president of Versailles Stay, says a lot of Asian nationals, especially Singaporeans and Japanese are investing in the Philippines’ real estate, because prices here are just a fraction of what they pay in their own countries. He says Versailles Stay aims to help these foreign unit owners to earn from their idle real estate investments.
“Why would they invest, if there is no return on investment? For some projects, the agents would promise to help in leasing. But we provide a more organized approach,” Perez says.
Both Sumida and Perez are experts in the real estate sector. A graduate of Mass Communication, Sumida has honed her skills in personalized customer relations, administration, human resource and finance. Aside from CapitaRise, her other companies include TMS Global Consultancy Philippines Inc., InShock Philippines, Magosaburo and Mago Wine Lounge.
Sumida’s newest project is the Versailles Stay at One Central, a high-end residential building at the corner of Gil Puyat Ave., H.V. Dela Costa and Geronimo Streets in Salcedo Village, Makati City. Versailles Stay at One Central has around 10 multi-tasking employees, she says.
She says the business concept is to have Versailles Stay as the overall brand that can be put up in more than one building. “Versailles Stay is not tied up to the structure. We can move Versailles Stay to any high-residential building that offers amenities and services as good as One Central,” she says. “Versailles Stay acts as a bridge to enable foreign investors to have access to residential suites of high-end buildings. We help foreign investors buy properties in high-end condominium developments.”
One Central, a project of Megaworld Corp., allowed Versailles Stay to have its own lobby in the building, a gym, game area, kids’ center, mini-theater, function rooms and access to the swimming pool.
One Central has a total of 705 units, with 200 units already being managed by Capitarise Property Management Inc. Of the 200 units, 50 units are now run as short-term accommodation facilities under Versailles Stay, while the other 150 units are for long-term lease.
“We manage 200 units, but only 50 of the 200 are being operated as dailies or short-term rents. The others are being leased out, for one year to two years,” he says.
Perez says the Versailles Stay serves the interest of developers, unit owners and guests.
“Because of Versailles Stay, the developer has an easy time to sell units to prospective buyers. The units that we manage here are owned 100-percent by foreigners. Then, we manage these units. We take care of servicing their association dues. On top of that, we deploy our staff in the lobby as well to make sure those who come to us are guided and introduced properly. In a sense, we serve as a sort of second line of defense for the developer. We provide extra security for them,” he says.
“On the unit owners side, why would they buy here in the Philippines, when the most number of times they would probably visit is twice a year? We make sure that we furnish the units. We maintain the units. Most importantly, we find tenants for the units. They benefit from recurring rental dividend. Actually, all they have to do is just wait every month for the rental dividend,” says Perez.
He says Versailles Stay takes care of furnishing and maintaining the units, as well as locating renters to occupy the rooms.
Perez says guests at Versailles Stay have the option for short to mid-term billeting in prime locations, complete with services and amenities that simulate a hotel stay, at affordable rates. He says guests will find their stay convenient and affordable. “Business people looking for affordable, yet secure place to stay, come here. At the end of the day, 90 percent or 80 percent of the time, they hold their businesses outside. Seldom do they spend time inside the unit. So why spend so much money with accommodation? With us, they do not only save money, but they also can avail of conveniences, like amenities.”
“Our rates are very, very affordable. We represent affordable luxury. Our rates compared to luxury serviced apartments in Makati are just one third of their published rates,” says Perez.
Versailles Stay signed a minimum of three-year contracts with unit owners, who allowed the company to redesign the units, based on its own standards
Sumida says the company invests a lot in improving the units. “When they turn over a unit to us, it is just livable with the normal walls and appliances. But if we want to lease it out for short-term or long term and we simulate a hotel, we have to do a nice interior of the room, make it all uniform with the beds, decorations, rags, curtains, everything. We professionalize everything here,” she says.
“Right now, we have 50 units owned by different owners. We have an agreement for us to manage, operate and maintain their properties,” says Sumida. She clarifies that Versailles does not run the units as a hotel. “We just lease it out for short-term, long-term accommodation. It is like leasing. We simulate hotel, but we are not a hotel. We have very, very low rates.”
Perez says under the contract, unit owners receive a minimum guaranteed rent in the first year. “But we also have to offer a kicker, which is a variable component on top of the minimum guaranteed rent and the kicker depends on the occupancy rate. If the occupancy is high, their variable component is also high. Regardless of occupancy, it will not go down below what we committed to them under minimum guarantee,” he says.
Perez says an overnight accommodation at Versailles Stay ranges from P4,000 to P5,000, inclusive of breakfast and WiFi connection. Food is served by Manila Catering, which is the exclusive meal provider of Cebu Pacific and Air Asia.
“We even give discounts. Forty percent of our clients right now is corporate, 40 percent, walk in. The rest are online travel agents,” he says.
Perez says Versailles Stay started operation in August 2014. “We started third quarter of last year. We opened with only 10 units. A month later, we added another 10, and a month later, another 10. Now, we have 50 units. The last 10 units were added this month. The average take-up right now is 40 to 50 percent. Our target number of inventory is 100 in this building alone, maybe by the third quarter this year. It really depends on take-up,” he says.
Perez says they are in talks with other unit owners to join the Versailles Stay’s pool. “Now that we are in operation, the unit owners that are not in the pool started talking to us. They started asking us, if they can also join the pool. Right now, our priority is the first group of people who talked to us. Later on, depending on demand, we can entertain them,” he says.
Sumida says with the success of Versailles Stay at One Central, the company plans to expand in Makati and other commercial business districts, including Fort Bonifacio, Cebu and Davao.
“We plan to go regional. We will go to Cebu and Davao. We will be having a couple of more buildings here in CBD,” she says. “It depends on the amenities, the location and the quality of the building. We just don’t go in any type of building. We have to analyze and review these things.”
“I am targeting 1,500 units within five years,” Sumida says.