KMC MAG Group: Riding the Real Estate Boom
Money Sense by Excel V. Dyquiangco, 09-01-2014
The Philippines is now a top hot spot for real estate.
According to the Urban Land Institute's regional report on emerging
trends in real estate in 2014, Manila ranks number four in the list
of most preferred cities for real estate investors in Asia Pacific.
And growth is noticeable in many other parts of the
KMC MAG Group, the largest Philippines-based real estate services
firm and an international associate of Savills, a London Stock
Exchange listed real estate services provider, knows this for a
fact. Not only does it know the pulse of the real estate industry
through its research, consultancy, and brokerage services, the
company itself has grown rapidly along with it.
Chairman of the Board Gregory "Greg" Kittelson, Managing Director
Michael "Mike" McCullough, and Chief Legal Officer Amanda
Rufino-Carpo founded KMC MAG Group (KMC stands for their last
names) and lead the dynamic and energetic team who work together to
attain consistent and enormous company growth.
"We started the company with just the three of us and now with
roughly around 130 employees after just a few years, the rate of
its development is stealthily and healthily increasing," says
KMC MAG Group offers cost-efficient and creative real estate
solutions to a wide array of clients, ranging from local to
international multinational companies. It also functions as a
one-stop shop for companies planning to expand to the Philippines.
"This has been very big for us since our phone just keeps ringing
off the hook with people who are looking for multi-billion peso
transactions to do here in the Philippines," says Mike.
The founders modestly share they are lucky to be still in
operations after five years. The reality is they have achieved a
lot in such a short time.
"We've been recognized internationally by the Asia Property Awards
and some other award-giving bodies. We've won Best Real Estate
Agency in the Philippines, Best Real Estate Website, and that is to
say these are years filled with dedication and hard work. So as our
business services have been expanding, we've also been awarded and
recognized in different categories," Mike shares.
"Also, it is about building a very good team of people," Greg
adds. "It has been very rewarding watching them grow
professionally, and watching them grow the company with us."
But it wasn't all this rosy from the beginning. When Greg and
Amanda met at a cocktail party in 2006, they started a consultancy
firm, Kittelson & Carpo Consulting which helps foreign
investors set up in the Philippines. Mike, on the other hand, just
came from Palo Alto in California and was tasked to set up the
Philippine office of the IT-BPO company he was working for. "He was
one of our first corporate clients," Amanda recalls.
In 2006 none of them had a proper office so they had their first
meeting at a Starbucks coffee shop in Legaspi Street in Makati.
"When we first met Mike, Amanda and I were just renting one old
wooden desk together, technically out of another company which was
an office that I was managing," Greg says. "We were using used
laptops on top of our used desks, as that was all what we could
afford at that time. We started our little firm with just enough
money to incorporate the company and put up a website. The firm
grew organically through client acquisition with no help or
influence from family and friends."
A year later, Amanda, Greg and Mike formed KMC MAG Group. Of
course they needed a proper office but they couldn't afford it, so
they took a sub-lease.
"The first office that we took as our own was in Rufino Tower in
Makati City," says Mike. "It was 220 square meters which was about
a 150 square meters bigger than what we needed."
"We took the new office so quickly, we had no time to hire proper
support staff, so Mike and I did the painting, vacuuming and took
out the trash for first few days until we hired proper help instead
of asking our employees.", says Greg
But right there, they knew that they were going to grow as they
were all young and ambitious so they looked for clients who were
willing to do business with them. A month later, they found some
individuals and companies. From there they were able to hire
employees and the organization increased in size and revenue. One
of their key employees, Rosario Carbonell, was also instrumental in
the success of the firm.
A year ago, they realized that they were making waves in the
industry when people, even their competitors, came knocking at
their doors and wanting to buy them out or buy into the company.
"We were definitely in the right industry, in the right city, in
the right country at the right time," says Greg.
"Our company has been extremely lucky when anything could have
gone left or right," says Mike. "It has always worked for us, and
we could have lost the biggest deal to a competitor or something
but we always won and whether its luck, success, or preparedness,
it has always been in our favor - hopefully that's because of the
positive aura that everyone exudes here. Within the company,
everyone is happy."
At present, KMC operates a total of 10,000 square-meters of
serviced offices facilities throughout Makati, Ortigas and and Fort
Bonifacio Global City. "We have 2,000 work stations under our
management now," says Mike proudly.
KMC Solutions and the BPO Industry
From the real estate industry, the company has also branched out
into the IT-BPO industry through KMC Solutions. "We feel that we
are an accelerator for IT-BPO clients," says Greg. "We don't have
to go and look for outsourcing contracts. Foreign companies who
already existed or wanted to set up an operation in the Philippines
were coming us daily. We would handle their biggest headaches; the
facilities, IT, HR, and payroll."
"So we essentially incubate them - every service they need to
initially be successful and to grow in the Philippines," says Mike.
"We continue to provide what they need until they are off on their
A company coming into the Philippines, for instance, would
typically need to find office space, employees, and make so many
decisions. "We make the decisions for them and we, in a way,
finance that in the sense that we are the ones who invest in this
type of property," says Amanda. "We set up the office so that they
are just plug-and-play. This makes it easier for them to do
business." "They just need to focus on their business and their
employees and we handle everything else," says Greg.
Given the services that the company offers, how is KMC MAG Group
different from their competitors? "We started out in an interesting
niche and that was the SME segment - foreign companies,
specifically - which is being underserved," says Mike. "In fact
when we did our competitor analysis, if you are an SME and you call
up our competitors, they would never even return your calls or your
emails. They wouldn't even meet up with you. They just ignore you
and that's quite unfortunate. And I think they have realized their
mistake because they have allowed a company like us to come into
their market that they control since they have all the money and
the branding. We were able to take the market share away from them.
This is simply by doing the right thing and just answering phone
calls and reaching out to them via emails, and offering them real
and amazing service."
"We stepped in to help them and now we are a full real estate
services company and a full serviced office, an incubator assisting
these companies," says Greg.
Major Trends in the Real Estate Market
Recent news and surfaces have also begun talking about a property
bubble these days. But for Greg, Amanda, and Mike, '"bubble" is not
the right term to use for this market simply because it may only be
talking about what happened to the United States which initially
sparked the global financial crisis. They believe that the
situation in the Philippines is quite different from that.
"What we have is an oversupply of residential coming up in the
next year or two and I think the developers are starting to
recognize that," says Greg. "The market is softening; the demand is
being satisfied by the current supply and for the next couple of
years, we may see some overall price decreases which should result
in cheaper sale prices and rental rates."
"But if you ask me, I don't think there's a bubble because the
main players are very cushioned," says Amanda. "They have a lot of
cash and they are not leveraged. It's not the same situation such
as in the United States. If there is a property bubble here, they
have the ability to ride that bubble. It's always in a cycle and a
wave. They are robust. They can absorb that hit."
She continues that probably one of the biggest problems is that
incomes need to rise to match the rising cost of property. "But
Filipinos are very resilient and that they'll find a way to buy a
house or finance a property some way somehow and the developers
know that. It's every Filipino's dream to own a home and the
challenge is in making people grow their incomes and for more
Sadly, as Mike says, people need to live vertically and they need
to be able to walk to the office. "As the city gets bigger and
bigger, more economic opportunities for salaries will always be in
the corporate cities," he says. "If the residential market slows
right now, prices will increase and I believe that it will bounce
back for years to come."
On the other hand, when it comes to the commercial market and
office space, this is a hot property as well. It's not just the
BPOs anymore -It's also with the SMEs, the banks, the local
insurance companies, and the local telecommunication companies that
are all expanding.
"People who work will need to eat and shop so you've got this
multiplier effect and I think that businesses will keep on coming
in here," says Amanda. "They're here for the labor in the
Philippines and that's the biggest asset. The biggest challenge to
that is having quality labor which means that the education and the
skills that people have need to be developed."
They also see this trend coming in for places outside Metro
Manila, particularly Cebu City, Bulacan, Pampanga, Bacolod, Iloilo,
Davao, or anywhere with schools and universities. In short, the
next wave cities would eventually experience a boom in their own
"I think that Davao has a lot to gain especially with new players
moving in there, and that has set the trend," says Mike. "Once the
big guys come in, then we know it's ready."
For freelancers and tech start-up companies, the last thing that
they will spend on is the office. "But there is a space for
freelancers - collaborative space - that is more useful than just
working from home," says Amanda.
Eventually, they believe that there will be a product similar to
theirs that is more cost-effective in the next few years. Plus
having an office space help freelancers reach out not just to
potential clients but to potential collaborators. "You also get to
work with other creatives and you network," says Mike. "At least
you keep yourself from getting bored at home." "You can even
generate income from one another," says Greg.
Shared office spaces, meanwhile, can get a little bigger when the
tech wave happens in the country. "There's still a bigger market
for what we do with the private rooms, though, and this is what the
majority of the market is asking now but it would be nice to see
shared collaborative spaces in the near future," says Greg.
As for companies directly leasing out rooms or desks in an online
marketplace, there is still the issue of trust and security - and
they don't see that happening. "A lot of companies are doing well
right now so for a stranger to rent their table for just a few
hundred pesos is not worth it yet," Mike says.
"But I do think that [AirBnB] is one thing that can potentially
bring residential prices down a little bit because now you have an
effective platform to rent out for both short and long periods of
time," says Greg.
Indeed these websites, mobile apps, and technologies have
disrupted many traditional service industries and it's going to
disrupt a little bit the micro-real estate industries for short or
long periods of time.
Personal Finance and Investing
So with their jobs as leaders in the real estate industry, they do
admit that life has become demanding. "It's a work-life-balance and
that has been the challenge," says Amanda. "When you become more
successful, you realize that the most important thing is your time.
You should know where your time goes."
She says that her American partners are still hands-on and very
hardworking. "I don't think from then to now there is any less
passion for what we are doing," she says. "I think it's more
because more is at stake. If you are watching a trilogy, for
example, it gets more intense."
When they are not working, they usually have other activities in
store. Mike takes his family on vacation and he tries to disconnect
from the office a little bit. Greg travels alone or with friends,
apart from going to social activities and networking events.
Amanda, on the other hand, trains for triathlons, every single
"We love to travel and this is an opportunity for the senior
management to step up to see if they can handle the challenge,"
When it comes to managing their money, aside from spending it on
their recreational activities, they also spend it on their
families. Plus they also invest. The three of them believe in the
diversification of stocks, as they have mutual funds spread
"We always retain a certain amount of cash inside the company for
expansion and if we have to put in some loans, then we always have
money for that," says Greg. "I believe the best investment is still
your own business, especially in a booming economy like the
For those who want to invest in real estate, location is very
important. Choose commercial, too, if one can afford it because it
has high potential and it deals with different clients. "Commercial
has better returns and better clients," adds Greg.