Financial Adviser: 5 Business Lessons Everyone Can Learn from Buds Wenceslao, CEO of DM Wenceslao & Associates Inc.

Building a real estate business requires more than owning land or putting up buildings. It also requires a long-term vision of how properties can create value as communities grow around them. For Delfin Angelo “Buds” Wenceslao, these lessons began inside a family construction business and eventually shaped the transformation of D.M. Wenceslao & Associates into an integrated property developer.

Wenceslao grew up around the construction business established by his grandfather, civil engineer Delfin M. Wenceslao Sr., in the 1960s. His father, Delfin J. Wenceslao Jr., later expanded the company into marine construction, land reclamation and real estate. As a young man, Wenceslao was regularly exposed to the business when his father brought him and his brothers to construction sites and meetings.

Rather than immediately enter the family business after college, Wenceslao first gained experience outside the company. After earning a degree in Management Economics from Ateneo de Manila University in 2000, he worked for an international real estate services and advisory firm. He eventually joined D.M. Wenceslao in 2002 and later earned a Master of Science in Real Estate

Wenceslao became CEO of D.M. Wenceslao & Associates in 2016. His leadership also represented a transition from one generation to another. While his father focused on the bigger picture, Wenceslao developed a management style centered on executing strategies and paying attention to details.

Today, Aseana City has grown into one of the largest mixed-use developments in the country, while D.M. Wenceslao has evolved from its roots in construction and reclamation into an integrated property developer. Its portfolio now spans residential, office and commercial properties, including MidPark Towers and Parqal.

More than two decades after joining the family business, Wenceslao has had a front-row view of how a family enterprise evolves from one generation to the next. He now leads the company his grandfather started more than six decades ago.

How did Wenceslao build on the business his father and grandfather created while finding his own path as a third-generation leader? And what can entrepreneurs learn from Wenceslao about family business, long-term thinking and creating value from existing assets?

Here are five business lessons entrepreneurs can learn from Buds Wenceslao, CEO of D.M. Wenceslao & Associates:

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When a business can solve problems that others are unwilling to take on, difficult work can become a source of competitive advantage.

Taking on work that others avoid can open new opportunities in business. Difficult projects often attract fewer competitors, which can give companies with the right capabilities a competitive edge.

But difficult projects can also help a business build valuable skills and experience. They can strengthen its track record and prepare it for bigger opportunities. Each successful project can become a stepping stone to something larger.

Buds’ father, Delfin J. Wenceslao Jr., did not try to turn D.M. Wenceslao (DMW) into a general vertical contractor that competed for every type of building project. Instead, the company developed capabilities in pile driving, foundations, marine construction and reclamation.

These areas are less visible than the finished buildings above them, but they require specialized knowledge and equipment. This gave DMW something more valuable than another construction contract. It gave the company a niche.

When many companies compete for the same conventional opportunities, it can become harder for a business to stand out. Specialized work can reduce the number of capable competitors.

Wenceslao also did not start with the 200-hectare reclamation project. He first took on small ports, followed by a three-hectare reclamation project and then an 18-hectare project in Cavite. Each project helped DMW build its experience, expertise and track record, which prepared the company to take on much larger projects.

By the time DMW pursued the 200-hectare project, it already had experience in reclamation and marine construction. Wenceslao took a large risk, but that risk was tied to capabilities the company had already developed. There is a major difference between taking a risk in an unfamiliar business and accepting a larger challenge in an area where a company already has expertise.

“This company was actually started by my grandfather, Delfin M. Wenceslao, or D.M. Wenceslao,” Buds Wenceslao says. “My father was the second generation, so my siblings and I are actually the third generation.

“My grandfather was a military engineer, and then he started doing projects for the government. You know, the usual government infrastructure projects, including those for the DPWH. That was how the company started in 1965.

“Then in 1979, actually the year that I was born, my grandfather passed away, and my father took over the business. At the time, they had two businesses. One was a hotel in Zamboanga, and the other was this construction company. So he decided to let go of the hotel business and focus on construction. Sa totoo lang, it was really my dad who transformed the company from, I think, a big contractor into a quadruple A contractor.

“Since the 1970s, I think we’ve completed more than 100 government projects, mostly horizontal infrastructure such as roads and bridges. We built a portion of TPLEX, the Tarlac-Pangasinan-La Union Expressway, the Alabang-Zapote Bridge, and the Marikina Bridge. Marami na. But usually, he would enter into a consortium with other contractors, so he would do a portion of, let’s say, a highway.

“We also did pile driving and foundation works because our specialty was from the ground down. We never really got into vertical construction. Usually, we would be subcontracted by other general contractors to do basement construction, pile driving, and foundations. I think at the time, that was just the niche that D.M. Wenceslao got into, together with marine construction and reclamation.

“Then in the late 1980s, this project presented itself. We submitted a bid to reclaim the last remaining portion of the Boulevard 2000 development. So this was the last 200-hectare block that had not yet been converted into land and my father decided to bid for the project. At the time, in the late 1980s, we were already doing smaller scale reclamation projects, like reclaiming land for ports. That was his track record. He didn’t just do this out of the blue, no. He was already doing smaller scale reclamation and marine construction projects.

“Talagang kontratista na talaga siya. So he would do a project and then move on. You know, that’s why when he reclaimed this project, he wasn’t planning to become a real estate developer. He just wanted to reclaim, sell, and then move on to the next project.

“This was during Cory Aquino’s administration. And to be quite honest, nobody was interested in doing something like this. So, in effect, he got the project. He was awarded the project because I think nobody else was interested in reclamation at that point in time.

“You know, when my father would tell the story, he would say that he took on work that nobody wanted to do. Because he was trying to grow the business, he would do small ports. Then he would do a three-hectare reclamation. Then in Cavite, he was able to get an 18-hectare reclamation project, and then he did this.

“I guess because reclamation is capital intensive. It takes a long time, and obviously, you don’t know what’s going to happen to the property after you finish the reclamation.

“There’s also special equipment involved, but at the same time, he was able to find partners. Actually, our partner contractor who did this with us was one of the largest reclamation companies in the world. They’re the same company that worked on the Palm Islands in Dubai and Chek Lap Kok Airport in Hong Kong.

“When we got the site, it was 200 hectares. This entire area was still water. Puro tubig lang talaga siya. The project was to reclaim it, to turn it into land. That’s why I think it’s such a unique story, at least for us, because we’re not just developers. We’re the ones who actually reclaimed the land. Where we’re standing right now used to be water.

“In reclamation areas, these buildings are built on piles. These piles go all the way down to the bedrock. So kami yung nag-i-install nung piles before pumatong yung building. They’re like concrete posts that go all the way down to the bedrock. That’s basically pile driving.  Kasi in other projects at that time, we continued doing things that we had a specialty in, like pile driving and foundation works.

“Reclamation is different. Basically, you put land on water. But it depends on the soil underneath. Kung ang lupa solid, like adobe, like sa BGC kasi adobe ilalim noon, that’s different. Pero dito hindi. The soil here is softer and less stable, so the piles have to go all the way down to the bedrock to support the building.”

When the original plan no longer works, successful businesses do not simply wait for conditions to improve. They reassess what they have, adjust their strategy and find another way to create value.

This is important because even a good strategy can stop working when market conditions change. Businesses that hold on to the same approach despite new realities can lose time and capital.

The key is to separate the goal from the method. A company does not necessarily have to abandon its long-term objective. It may simply need to find another way to achieve it through a different revenue model, pricing strategy or use of its existing assets.

A change in strategy can also uncover opportunities that were not part of the original plan. A solution to an immediate problem can eventually become a new source of revenue.

Wenceslao was willing to change course when the original plan no longer made sense. The company had already invested significant time and money in the reclamation, but market conditions had changed.

Rather than force a sale in a weak market or wait for buyers to return, Wenceslao found another way to make the land productive. Leasing allowed the company to keep the property while earning income from it. By shifting from selling to leasing, Wenceslao found another way to unlock that value without giving up the asset.

Wenceslao also introduced the new strategy gradually. Instead of committing the entire property to leasing, the company started with a few locators and expanded as demand grew.

This reduced the risk of the new strategy. It allowed the company to see what worked before it committed more of its land and resources. Rather than replace one large bet with another, Wenceslao allowed the business to grow step by step.

Wenceslao also did not abandon land sales completely. The company continued to sell some properties while it leased others and later developed its own buildings.

This gave DMW several ways to create value from its land. Sales provided capital, leases generated recurring income, and its own developments created another source of growth. As a result, the company no longer depended on a single strategy.

“As a contractor, my father’s goal was simply to reclaim the land, sell it, and then move on to the next project, but we substantially finished reclaiming the 200 hectares in the late 1990s to early 2000s, the Asian financial crisis happened,” he says. “So at the time, nobody wanted to buy, kasi crisis eh.

“Nobody wanted to buy. So parang in his mind, if nobody wanted to buy, I guess we’ll just start leasing portions muna. You know, construction is very cyclical. It has its peaks and valleys, diba? My father wanted to put in some recurring income to basically smoothen the cash flows. So nauna si S&R because that lease started in 2001. They built S&R there, and then the gas stations came.

“Then eventually, other developers started coming in. As we started to grow the locator base, more blue chip players came in, like Landers and St. Luke’s, so pakonti-konti.

“My father would also sell portions of the property. At the same time, the land leases continued to come in. Then we started developing our own office buildings, and the recurring income started to become more substantial that allowed us to substantially improve our financial position.

“But a substantial portion of the property is still undeveloped. More than 40 percent of our landbank is still undeveloped, and that’s part of the growth trajectory of our company. So only about 60 percent has been developed, sold, or leased.

“I think it was around the late 2000s when we started to have a more stable balance sheet. And since we’re publicly listed naman, you’ll see that I think we’re one of the more conservative, underleveraged companies.

“It’s not that we didn’t have any debt. We still had debt. There’s really no real estate company without any debt. But our debt was already at manageable levels because of the recurring income. At the same time, we were still doing projects for other people.

“It was only in the early 2000s when real estate started to gain a foothold in our company. Naging tuloy-tuloy yung buhay nung company, from a construction company to a real estate company, doing land leases and then office buildings. So it has continued evolving, adapting and transforming, and even until now, it is still transforming.”

Experience before responsibility gives future leaders time to learn and build confidence before taking on bigger roles.

For the next generation of a family business, outside experience can also help develop independence and perspective. In another company, they have to perform without relying on the family name or their position as an owner’s child.

Working elsewhere also exposes them to different ways of doing business. When they enter the family business, they can bring those ideas and practices with them.

Buds did not move directly from college into the family business. His father required the children to work elsewhere first, which gave him a chance to gain experience without relying on the family name.

Buds worked at a property consultancy, where he handled property sales and leasing, with a focus on office leasing. The experience proved useful when he later joined D.M. Wenceslao, which was just starting to build its real estate business.

His outside experience therefore gave him practical knowledge that he could apply when he took on his first responsibilities in the family business.

His father recognized that the family's reclaimed property created an opportunity in real estate and encouraged Buds to pursue that field. But he did not appear to dictate every step of his career. He pointed Buds toward an opportunity, then allowed him to develop the experience needed to pursue it.

This gave Buds both guidance and independence. His father provided direction based on where he saw the business going, but Buds still had to develop his own capabilities. When Buds entered DMW, the company did not immediately put him in charge of a large established real estate operation. In fact, there was barely a real estate department at the time.

His first development, Aseana Power Station, was relatively small. This allowed him to gain experience with an actual project before he took on larger developments. When Buds presented an idea and showed that he had studied it carefully, his father gave him the freedom to proceed. This allowed Buds to learn through actual decisions, not just by observing his father. He gained experience and developed his own judgment.

His father also understood that mistakes were part of learning. He supported Buds even when projects involved uncertainty. By giving him room to make decisions and accept the results, he helped prepare Buds for greater responsibilities.

As Buds took on more responsibilities, he also recognized that he still needed to learn, particularly in finance. This kind of self-awareness helps leaders recognize where they need to improve as their responsibilities grow. By pursuing a master’s degree, Buds prepared himself for the more complex decisions that would come later.

“I studied Management Economics at Ateneo,” he says. “Before I joined the family business, we were all required to work outside first. Parang that was our requirement. My dad told me, you know, we have this property. I think you should get into real estate.

“So, I worked for one and a half years at a property consultancy firm. I was doing leasing and selling properties, but I was focused on office leasing at the time. After one and a half years, I came here. Basically, when I joined the company, parang I was employee number two in real estate. At the time, wala pa namang real estate department talaga. But my siblings were already here, and since we had just reclaimed this property, this was the area that was handed over to me.

“When I got here, our first project was Aseana Power Station. It’s basically a three story retail development with a gas station beside it, you know, one of those gas station retail developments.

“We had leased a site to a gas station, and they told us, you know what, usually these projects do well when there’s retail beside them, similar to the ones along the highways. Actually, they brought that idea to us, that we should build something beside it. At that time, there was really nothing there. So my dad was very supportive of putting our own development here to show people that this was a new area that was investible and potentially commercially feasible.

“I think that was also very typical of my dad. We would have these ideas, and he would support us because he was not a micromanager. He was more of a big ideas kind of person. Even when I would show him the financials of how an office building would work, he would say, you know what, it’s okay. I think you’ve studied it well, and you should just proceed.

“Aseana Power Station was my first project, but it was relatively small. Actually, it was supposed to be only two stories. But in the middle of it, my dad said, no, I think let’s make it three stories. So biglang naging three stories.

“Obviously, I was concerned because it was our first project. But he was always very, very supportive. You know, my dad would always say that he had failed so many times, but his successes were more substantial than his failures.

“After that, I went to graduate school, I took a master’s in real estate development. For me, at that time, my weakness was finance. I was already doing marketing, and because of the company’s construction heritage, we already knew how to execute projects.

“I think learning how to do feasibility studies, how to convince banks, and how to convince partners through data and financial projections was one of the missing links within our company. I needed to understand the finance side, the relationships with banks, and financial modeling. My dad encouraged me when I told him that this was what I wanted to do. He never told me, apply here or take this up. He gave me the freedom to decide that for myself.”

Businesses can create greater value when leaders look beyond individual projects and understand how different parts of the business can strengthen one another.

Seeing the bigger picture allows leaders to recognize connections that may not be obvious at first. Customers, locations, infrastructure and complementary businesses can all contribute to the value of the core business. When these pieces work together, they can create more value than they would on their own.

Buds did not look only at the land the company owned. He looked at what was happening in other business districts, particularly the rapid growth of BPO companies and the office rates in Makati and BGC. He then considered Aseana’s location and saw that it could serve companies that wanted access to a business district outside the established CBDs.

He also understood that location was not simply about where Aseana was on a map. Its proximity to the airport and port made it attractive to logistics and shipping companies, while the presence of Mall of Asia brought people, services and greater visibility to the area. Instead of viewing these developments as unrelated businesses, Buds saw how they could increase demand for DMW’s own properties.

The success of Aseana 1 gave the company evidence that this strategy could work. Rather than expand aggressively based only on expectations, DMW could use the performance of its first major office building to guide its next investment. Once Aseana 1 reached full occupancy, the company had a stronger basis for another office development. Growth therefore came from a combination of a broader vision and evidence from what was already working.

But Buds eventually saw that building more offices alone would not maximize the value of the company’s large landbank. Residential developments bring people into the area beyond office hours, while retail, schools, hospitals and other services give them reasons to stay. Each new use can therefore support demand for the others.

This explains why DMW’s decision to build parks, transport facilities, sky bridges, bus stops, bike paths and other infrastructure is also part of its business strategy. These facilities may not generate revenue in the same way that an office building or condominium does, but they can make the entire district more accessible and attractive. By improving the surrounding environment, DMW can increase the value of the properties within it.

“Our first big project talaga was Aseana 1, which is a 20,000 square meter office building,” he says. “At the time, I had just come back from graduate school. I had been away for around 18 months, closer to two years. We had already closed a couple of land leases, but there was still no substantial development by the company.

“This was also a time when BPOs were growing exponentially. Looking at the market and seeing what was happening in Makati and BGC, and looking at the rates there, we felt that, considering our location, Aseana could become a good sub-CBD to the major CBDs like Makati and BGC.

“We finished Aseana 1 in about two years, and within a year, it was already full. That’s why a year later, we started our second office building. Our tenants were a mix of BPOs and traditional companies. But in this area, one of the anchor industries is logistics. So you have shipping and other related companies because we’re near the port and airport areas. Those make up a substantial part of our lessee base.

“Mall of Asia was already here before we developed our first office building. I think having MOA here obviously increased the visibility of the area. Dumami yung crowd.

“That’s why, if you notice, many of our developments are near the mall, because the mall already has many of the services and products that people need and that benefits the tenants in our buildings.

“I think the strategy of the company, considering that our landbank is substantial, is to develop it holistically. That’s why we’re not just focused on building offices. People ask, you know, are you an office developer? Are you a condo developer? We’re not. We’re a city developer. We’re not just focused on building offices or condos. We’re also building parks and churches. We’re interested in attracting hospitals and schools. We’re building bus stops, and we operate our own public transport franchise within Aseana. We’re building sky bridges, designing bus stops, putting in trash cans and bike paths. So, you know, everything that would complete the community.

“In city development, the whole is more than the sum of its parts. That’s why adding these unique locators, whether it’s La Salle or St. Luke’s, or a purely commercial development like Ayala Malls, adds to the entire development. Put them all together, and they’re worth more than what they are individually.

“Residential is also important because it adds a 24/7 population. Kasi pag office, pag gabi walang tao. So that’s why it’s very important that the development is mixed use.”

Preparing the next generation helps a business survive beyond the people who built it. A company may have strong products and a successful strategy, but these can be lost if future leaders are not prepared to take responsibility for them.

Future leaders need more than knowledge of how the business operates. They need to understand how decisions are made and how problems are handled. Giving them early exposure to the business allows these lessons to develop gradually before they are expected to lead.

Building a business that outlasts its founders also requires each generation to see itself as a steward rather than simply an owner. The goal is not only to preserve what was inherited, but to strengthen it and leave the business in a better position for those who come next.

Buds’ father did not treat succession as something that would begin only when his sons were old enough to join the company. He started preparing them years earlier. By bringing them to project sites while they were still young, he gave them exposure to the business before they had any responsibility for it.

He also made the future of the family business part of their regular conversations. As they grew older, their exposure became more practical. When Buds’ father brought his sons into meetings with contractors, bankers and business partners and told them to “just listen,” he allowed them to observe how business decisions were actually made.

Perhaps the most important part of his approach was that he passed on a way of thinking, not just a company. His emphasis on hard work, perseverance and accepting problems as part of business prepared his sons for the difficulties that would come with leadership. The lesson was that inheriting a successful company would not protect them from setbacks. They would still have to solve problems and make difficult decisions themselves.

“Ever since we were young, as young as grade school, my dad was very hands-on with us, at least as far as our professional development was concerned,” Wenceslao says. “He would meet with me and my brothers regularly. He would ask us what our goals were and how he could help us. At the same time, it was already instilled in our minds that all of us were going to work here one way or another. He would tell us the usual thing: you know, I’m building this for you guys to take over. He would sit down with all of us together and talk about it.

“I also have stories of coming here on Sundays when they were still reclaiming this area. I think I must have been in first or second year high school. We would come here on a Sunday, and all you could see was putik all around from Roxas Boulevard. Parang, ano bang ginagawa natin dito on a Sunday afternoon? But yun pala, this was his project. Dadalhin niya lang kaming lahat dito.

“And when we eventually joined the company, at any given time, he would pull me or one of my brothers into his meetings and just say, ‘Just listen.’

“So we would sit there and listen to his meetings with other contractors, banks, and potential partners. Eventually, people got used to him bringing one of his sons along.

“There’s at least one lesson from my dad that I always remember, and I also tell this to my kids. Everything that’s worth doing in life is hard. Whether it’s work, being a family man, or maintaining relationships, don’t complain. You should get used to working hard because everything worthwhile takes a lot of effort.

“And the second is about our business. Our business is a business of perseverance. That’s why grit is so important. I also tell this to my people. In all of the construction projects that I’ve handled, I don’t think there has ever been a project na walang problema.

“Sometimes I see some of my people getting stressed about something, whether it’s delays, problems with a contract, or whatever. I tell them, why are you worried? Kapag walang problema, tsaka ka magtaka, kasi it means hindi pa lumalabas kasi for sure, meron ’yan. People sometimes think that it has always been like this, but it hasn’t.

“I can remember my dad telling us that there were times when he could only pay his employees by giving them grocery bags because he couldn’t afford to pay their salaries. He would tell us these stories.

“If there’s anybody who really worked his way up from the bottom, I think it’s him. That’s why every year, when we have company meetings with our managers, there are always new people and new hires coming on board. So I always try to give them a little bit of the company’s history. I show them where it started and how it grew.

“And I tell them, you know, 90 percent of where we are right now is not because of me or my siblings. It’s because of that man, our chairman because if he didn’t do this, wala lahat ’to.

“He was willing to take the risk. Whether or not he had all the technical or financial capabilities at the time, he did it.

“They always say in real estate that it’s about location, location, location. We’ve had some reclamation projects that didn’t do as well because the location wasn’t as good. So again, a large part of why the company is where it is today is because he decided to do this particular project. My brothers and I always say that we stand on the shoulders of a giant.

“We are just stewards of the business. We’re continuing what he started and working to make sure that the company is in a much better position than when he left it to us.”

Henry Ong, RFP, is an entrepreneur, financial planning advocate and business advisor. Email Henry for business advice [email protected] or follow him on Twitter @henryong888