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David Leechiu: The Making of a Property Wunderkind

Only 45, he now leads the country’s biggest property brokerage founded only two years ago

By Pauline Macaraeg
Jun 1, 2018

Founded in 2016, Leechiu Property Consultants was already the third biggest firm in the brokerage business last year.

“This year I'm very confident that we will be the largest by revenue, by a very wide margin in the brokerage business,” says David Leechiu.


Parents won’t admit this to their children but sometimes doing badly in school can lead to something good. Just ask David Leechiu, the CEO of Leechiu Property Consultants, the country’s leading commercial property brokerage founded only two years ago.


As a high school student at the Jesuit-run Xavier School, the exclusive school for sons of well-to-do Chinese-Filipino families, he was constantly in trouble with his teachers. “I always sat at the very back of the class—from the very back of the class to facing the wall,” he recalled, flashing his boyish grin. “When that wasn't enough they would move me to the hallway. I did very poorly to the point that I got kicked out of Xavier.”


Leechiu seemed differently wired from his school mates. He preferred the company of older people to learn about practical matters in the world of business, and was bored by seemingly useless academic subjects.



His teenage years also coincided with a drastic reversal in his family’s fortune after a fire wiped out his parents’ appliance shop at the Araneta Center in Cubao, Quezon City, distracting him further. “That kind of burned in my memory—how painful it is to not have money and to lose. It's good when you're starting from scratch and then you're going up. That's okay because you don't know what you don't have. But it's very painful to go from having something to losing (it),” he said.



Turning a New Leaf in College

Because of his spotty academic record, he couldn’t get into what were considered the country’s top three schools—Ateneo de Manila University, De La Salle University and the University of the Philippines.


Only one school called him for an interview, rather than just look at his dismal high school grades, and eventually agreed to take him in. This was the Center for Research and Communication (CRC, which is now the University of Asia and the Pacific), which had just launched its undergraduate degree programs in economics and business back then. Before that, CRC, which was founded by members of Catholic lay order Opus Dei, was just offering graduate degrees in business economics.




David Leechiu admits he wasn't a good student, but he eventually thrived when he pursued a degree in Entrepreneurial Management at the old Center for Research and Communication (now the University of Asia and the Pacific)



Unlike his troubled stint in Xavier School, Leechiu thrived in CRC. Alongside the usual liberal arts subjects such as philosophy, humanities and social sciences, he was learning about the real world of business and the economy. Because of the school’s close ties to business, students didn’t just learn academically but got to interact with company leaders and executives. For the first time, he got to visit the stock exchange, and was immediately amazed by its potential. He wondered why he and other students didn’t learn about it earlier in high school.


Leechiu attended CRC from 1990 to 1994, pursuing a degree in Entrepreneurial Management. In those four years, he learned so much from respected mentors, including the CRC founder Bernardo Villegas, one of the country’s most brilliant economists. “It was a fantastic school. I would always, always, always encourage people to go to that school,” he said.



He credits CRC for giving him a well-rounded education as well as meaningful interactions with the business world that gave him an uncanny ability to make a coherent sense of what’s happening around him and spot emerging trends. “My strengths were never accounting or finance. I have a very short attention span. But my mom and my dad exposed me to the world of sales and marketing, and then CRC exposed me to the world of big corporates,” he said.


By the time he graduated, the 21-year-old Leechiu already had a good idea of what his options were. He said that in the 1990s, the main drivers of the economy were the stock market and the property sector, which were growing much faster than other industries. “This is what I keep telling people—you have to grow with the economy, if not faster. You have to find the industries that would allow you to ride that wave.”



Of the two, however, he opted to go into property, seeing it as more sustainable. He said the stock market was much too volatile. “I thought the real estate market was more sustainable,” he said. “The stock market—I don’t know if I can ride the roller coaster every day of my life, every second, every minute. The turbulence in the real estate market is sloping. In the stock market, every 10 minutes, everything changes on you.”



First Jobs

Leechiu managed to get into the property industry shortly after it began booming in the mid-1990s. He had quit his first job in a paint manufacturing company and was visiting CRC when he ran into Ramon Cuervo III, son of the founder of one of the country’s most established property appraisal and brokerage companies then, Cuervo Appraisers. The younger Cuervo invited him to join their company, which Leechiu readily accepted.



In Cuervo, Leechiu had the choice to make a lot of money immediately by going into sales or to make less money but learn a lot about the industry by working as an executive assistant of the CEO.


"I could've had a career just pushing flyers, which is fine, and I would do five deals a year, maybe and I would make some money, a lot of money. Or I can make less money, but I will be armed with a lot of information and a different kind of work ethic and a different way of doing things,” he recalled his options then. “And that's what allowed me to differentiate myself against other people in the industry. And I had great mentors and a lot of people helped me along the way."


Though he was tempted by the money to be made, Leechiu opted to work as an executive assistant and try to learn as much as he could from the company’s founder.



“It was a very good environment, fantastic training,” Leechiu recalled. Cuervo Appraisers partnered with foreign company Richard Ellis (now CBRE) during that time. “I saw two worlds exist and, you know, sometimes they would clash. But they existed quite well and that's where you saw the need for competence, information and relationship,” he said.


Young and a local, Leechiu felt disadvantaged vis-à-vis expatriates also doing property deals in Manila. “At that time, 1992 to 2000, if you weren't an expat, if you weren't a Westerner, [it was] so hard to penetrate and win the confidence of other expats,” he recalled. “They would do deals in the bars, talk about cricket and football and rugby. It's like, I don't even play golf, I don't even play tennis."


He added: "At that time the locals were very, you know…it's a very colonial mindset. I would go to functions at the American Chamber (of Commerce and Industry) and nobody would even mind us because, one, we were young, and two, we were locals."



However, his boss, Mark Townsend, one of the expats sent by Richard Ellis to work with Cuervo, encouraged him to persevere. "It doesn't matter how old you are, how young you are, how inexperienced you are,” he recalled Townsend telling him. “But you have to know your stuff, because without that stuff, you won't introduce any value."


One time, Townsend asked him to brief and give a tour to the president of a big local property company, prompting Leechiu to ask: “‘Are you sure you want me to do this?’ Because I’m like, I’m a kid.” He still remembers Townsend’s reply: “It doesn’t matter. The fact is you probably know more working here two and a half years than he ever will because he’s in a different industry.”


Because of these kinds of stretch assignments, Leechiu gained confidence despite his young age and local background. He learned that the most important thing was to be thoroughly knowledgeable about the industry. "It's not enough to be a nice guy, it's not enough to be honest and sincere. You have to be brutally competent, hardworking and you're always questioning, always asking yourself what's changing,” he recalled the factors that helped him become successful as a property broker.



After three years, Leechiu left Cuervo Associates to join another property brokerage firm—the Philippine unit of international property brokerage Savills, which at that time was under First Pacific Ltd. of Hong Kong, the parent firm of Metro Pacific Investment Corp.


The timing was inauspicious as it was just the year after the Asian financial crisis erupted in 1997. He was just 25 years old.


The company survived the regional currency crisis even though the peso-dollar rate fell sharply from Php29.5/$1 to Php51/$1 between 1997 and 2001. By then, Leechiu was even appointed general manager of Savills' Philippine unit.



Leechiu bought the Savills franchise in the Philippines and put up Php3 million to start Leechiu & Associates, marking the beginning of his transition from employee to employer



However, a second bout of massive currency depreciation then hit the Philippine economy, triggered by the ouster of former President Joseph Estrada in 2001 and the attempted coups against his successor, former President Gloria Macapagal Arroyo, in 2003. It was too much for Savills, which was losing from the currency depreciation even though its Philippine unit was quite profitable in peso terms.



In 2003, Savills made the decision to exit the Philippine market and sell the entire business to Leechiu. “Our (Savills’) revenues were climbing but the currency was falling so fast. We were making money but the moment you convert everything back to dollars, they were losing money,” he explained.



On His Own

So, together with his father-in-law and another partner, he bought the Savills franchise and put up Php3 million to start Leechiu & Associates. For the first time in his life, Leechiu wasn’t working for somebody else but was working for himself. Finally, he was a full-fledged entrepreneur.


It was an exciting time, but it was not easy. From Savills’ original employee count of 50, Leechiu had to reduce the staff to 17. They also went from a 350-square-meter office to a 75-square-meter workspace. “We had to cut everything. Cut all the costs, cut to the bare minimum and then maximize the margins. We tried to make that stretch as much as we can,” he recounted.



Through such painful cost-cutting, the company began to make money. The company’s cash flow turned positive by the sixth month, and they were already giving dividends by the 18th month.


More importantly, the Philippines then was at the cusp of the call center and business process outsourcing (BPO) boom, though it wasn’t apparent to anybody then because it was masked by the political instability throughout the entire term of former President Macapagal Arroyo.


“I was lucky enough to service the first call center here in the Philippines,” he recalled. “Nobody knew what this call center thing was. No company was asking for 24/7 operations, air conditioning, all night. Who does that, right? No company would say 'I need 100-percent back-up power when there's a blackout that within five seconds I can get all my power back on.’”


Leechiu’s first client in the call center industry was a company called Sykes, working closely with the company’s Regional Vice President Michael Henderson. “I helped him get half a floor. Six months later, he said he needed the other half. 'Oh I need the floor above and then the floor below. You know what, I need two more floors. We need space across the building,'” he recalled Sykes’ rapid expansion. “This guy went from 500 square meters to 5,000 square meters in a few years.”



So, when the BPO industry boomed in the following years, he already knew what to do. “From 2000, we were doing a lot of deals with these call centers because we were familiar with the needs,” he said.


By all accounts, Leechiu’s first foray into entrepreneurship was a big success as it coincided with a prolonged property boom fueled by the rise of the BPO industry in the Philippines.


From annual demand of around 90,000 square meters of office space in 2000, it has since grown to 775,000 square meters today. Leechiu said this growth has been continuous and unbroken. “In fact we were the only country in the world that didn't contract in demand,” he added. He said Metro Manila is, in fact, one of the top four markets in the world in terms of real estate demand volume after Beijing, Shanghai and Tokyo.


Even the onset of the global financial crisis in 2008 didn’t dampen demand for commercial property in the Philippines, which continued to grow as US companies located some functions offshore in a bid to cut costs and remain viable. Though American companies were downsizing in the US itself, the BPO industry boomed in the Philippines and other countries.



After leaving Jones Lang Lasalle in 2016, the 45-year-old businessman is now doing his own thing again, putting up Leechiu Property Consultants



In a sign that the global financial crisis didn’t hurt the country’s outlook at all, international property brokerage Jones Lang LaSalle Inc. (JLL) offered to acquire all the shares of Leechiu & Associates from Leechiu and two other partners in 2008.


The offer was too good to pass up, and so Leechiu, his father-in-law and another partner agreed to accept JLL’s acquisition offer. In addition, they also agreed to stay with the company and run its operations.


That created a minor resentment among JLL’s local staff in Manila. They asked: “Hey, we bought your business. Why are you now our boss?” The answer was clear in Leechiu’s mind though it may have been hard to accept for others. “They bought the business so that they can hire all of us,” said Leechiu.



In the end, there was really no reason for JLL’s local staff to be apprehensive. Though both JLL and Leechiu & Associates competed in at least two segments of the property consultancy business, Leechiu decided he didn’t want to fire anybody from both companies for redundancy. “The market was big enough to have all those people under one roof,” he said.


True to Leechiu’s words, JLL’s business grew even more, expanding four times between 2008 and 2016. Revenues surged from Php300 million to about Php1.2 billion during the eight-year period. “We went from an insignificant organization to just barely in the Top 1,000. I gave that company the best years of my life, actually,” said Leechiu.



Prospects and Challenges

Today, the 45-year-old businessman is now doing his own thing again. He put up Leechiu Property Consultants (LPC) shortly after leaving JLL in 2016.


“First of all, it's not a midlife crisis phase in my life,” he joked, explaining why he left JLL. “(It’s) because, okay, I've got another maybe 15 years left in my fast-paced, long hours kind of career and I have to make the most out of it. By moving out and being independent, I can then build another business that hopefully somebody will find a value later, whether I sell a portion or 100 percent. It depends. But I know that if you did it right, it will be of value to somebody later. So that's what we're doing.”



Leechiu shared LPC was already the third biggest firm in the brokerage business last year, which was only their second year of operations. “This year I'm very confident that we will be the largest by revenue, by a very wide margin in the brokerage business,” he said.


Perhaps it’s just as well that Leechiu decided to set up an independent property brokerage operation at this point when the property market is facing both exciting and challenging prospects.


On one hand, sustained economic growth and the government’s ambitious infrastructure building program are seen to drive demand for both residential and commercial property in the years to come. However, one of the main drivers of property demand, the BPO sector, also seems to be going through a slow patch due to domestic policy uncertainties as well as technologicial shifts, particularly the rise of AI and automation.


Indeed, BPO take-up of office space fell for the first time in 2017 in both relative and absolute terms. Fortunately, the slack from BPOs was offset by demand from a new and emerging sector—Chinese offshore gaming entities—making it possible for overall demand for office space in Metro Manila to grow in 2017. “If not for online gaming the market would have collapsed big time,” said Leechiu.



While demand for office space from BPOs seem to be recovering this year, rising by 35.5 percent in 2018, the challenges remain as the Philippine government seems determined to push through with legislation sharply reducing if not removing the sector’s tax holidays and incentives. The House of Representatives is currently considering proposed bills, the so-called Tax Reform for Acceleration and Inclusion (TRAIN) II, that would cut corporate income taxes and overhaul tax incentives.


In addition, the spread of AI technologies in the BPO sector, particularly robotic process automation (RPA), could dampen the demand for additional office spaces as the technologies reduce the number of people needed to do the same amount of work as before.


It remains to be seen how the BPO sector will fare amid these emerging policy and technological challenges.


But Leechiu is not leaving things to chance. Already, he is investing in an AI company that is developing a technology that makes it possible for Philippine-based call center agents to work with AI algorithms and take on higher value jobs. Though he is sparing with the details of the investment, he confirmed he is entering the space in part to learn how AI will impact businesses in the Philippines.



It all fits well with his view that only three industries will shape Philippine economy and business in the next three decades or so. These are today’s counterparts of the stock market and property sector that were on the rise when he graduated from college in the 1990s.


“I keep telling my children the future is all about infrastructure, technology and environment. Those three industries. Everything else is going to be peripheral,” he said. “The next 30 years will be crucial in the lifetime of my children, they have to find the tides that will accelerate them further.”






Pauline Macaraeg is Entrepreneur PH's data journalist. Follow her on Twitter @paulinemacaraeg

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