Nestor J. PadillaNestor J. Padilla knows all about rising from the near-dead.
Padilla can still vividly recall how he used to look at Rockwell Drive from his condominium unit in Rizal Tower and wonder if he will keep his job as head of Rockwell Land Corporation for much longer.
There were hardly any cars and, at the same time, his company was wobbling under the weight of a huge debt problem brought on by the 1997 Asian currency crisis.
He and the rest of the team were scrambling for effective solutions that will keep the fledgling property company’s head above water long enough for it to ride on the inevitable upswing of the real estate market.
With a mix of brave decisions and a generous dose of luck, Rockwell managed to take the right steps and work its way out of a grave situation where interest rates shot to 27% a year, anticipated sales practically disappeared and selling prices dropped—the perfect storm that brought down weaker real estate companies.
Thus, it is with a great sense of satisfaction that more than 20 years after the company was founded, the 61-year-old CEO can look out of the spanking new offices at 8 Rockwell and see the busy streets, with Power Plant Mall alone enjoying foot traffic of 20,000 on weekdays and 30,000 on weekends.
And Padilla feels that the best is yet to come with the continuing expansion of Power Plant Mall and the ongoing construction of new office and residential condominium units at Rockwell Center, as well as entry into new segments and territories in Metro Manila and urban centers outside the capital.
But while the publicly listed company has adopted a more aggressive expansion stance, Padilla tells the Inquirer in an interview at 8 Rockwell that the company remains firmly guided by the hard lessons learned during the “dark years” in the late 1990s when the company came close to taking desperate steps that would have prevented Rockwell from unleashing its full potential.
The time to make hard decisions came early in its corporate life that began in 1995.
The company, whose main asset was a piece of property in Makati City where an oil-fired power plant used to sit on, had just launched its newest development at the West Block when it noticed significantly weaker sales brought on by the sudden depreciation of the peso against the US dollar and more importantly, the “painful” spike in lending rates.
At first, Rockwell thought that the market would recover in five years. The agony, however, dragged on for about seven.
And during the bleakest moments, the group thought about subdividing the property, to sell some parts to make good on debt payments. But the plan was scrapped after realizing that even if it did do that, it would still have substantial debts.
Then it also came close to selling part of the property to someone who wanted to put up a gas station. That, too, was scrapped.
It could afford to because during those days when credit was tight, the group was given a lifeline by Metrobank.
It also won the support of tenants such as Rustan’s Supermarket, which helped establish the credibility of Power Plant Mall as a destination, even if the property was at that time thought to be too far away from the central business district with limited access.
The idea also came up in 2001 to go to the United States to find buyers there.
Padilla says it was not easy fighting for the brand, especially during the time when sales were drying up and debt payments were piling up.
‘Sticking to the brand promise’
“Everybody was feeling depressed and I even got sick. I was hospitalized. I was supposed to present to the board the next day but I could not do it. I told the team to just believe that we were creating a brand, even if we were losing money. The Rockwell brand must stand for something, that anything we do has to be the best,” says Padilla. “Sticking to the brand promise was what got us through.
“When you grow, you’ve got to go through some pain. It is when you go through pain that you get better,” he adds. (Story/Photos by: Tina Arceo-Dumlao)