According to studies by McKinsey & Company and the World Bank, Metro Manila in the Philippines faces one of the largest affordable housing shortages in the world. Yet property developers in the Philippines primarily focus on high-end, for-sale housing. Recent affordable housing projects remain commonly sold to wealthier individuals, or are located outside of urban areas, and are in no case accessible to the country’s largest and growing demographic: the young professional.

As a result, millions of young professionals’ lives are relegated to 4-5 hour daily commutes to work in what Waze and Uber research has dubbed as some of the worst traffic in the world. This lack of work-life balance is unhealthy, unsustainable, and unworthy of a segment of society that provides most of the country’s economic growth.

Data, Not Dogma

MyTown was founded in 2012 to address the growing affordable housing issue sustainably and to have a positive daily impact on its target market.

At that time, the only alternative to long commutes for young professionals in Metro Manila was the concept of “bed spacing,” where converted rooms in subpar residential homes are rented out to career starters. These bed spacing units were usually unsafe and did not contribute to a better quality of life. Moreover, they had long contributed to the idea in the Philippines that coliving spaces are an operationally onerous and low margin business that cannot be scaled sustainably.

MyTown broke through this belief by focusing on data, not dogma. Through in-depth surveys and interviews with over 1,200 young professionals, the design, rates, amenities, and contract terms of the concept that became known as MyTown were determined. Whereas many real estate projects are the result of top-down decisions by developers, MyTown is an affordable housing solution that’s 100% driven by the feedback from its target market.

Through tenant surveys and MyTown’s smartphone application, data continues to drive the company in a myriad of ways - from enhancing customer care by analysing feedback on when and how to address tenant concerns, to optimising staff schedules by reviewing peak tenant requests from our MyTown application, to automating processes that otherwise require manpower, to using hourly electricity data to adjust rates with our utility provider and installing solar panels.

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Impact On Sector

Starting from a small pilot building in 2012, MyTown today owns and manages 18 buildings, all located in the fringes of the Philippines’ largest business districts, where land prices are lower yet major offices are still a mere walk away. Its portfolio has 4,500 beds, elevating the work-life balance for thousands of young professionals daily. Cushman & Wakefield have called MyTown a “trailblazer in the industry,” and today MyTown is one of the largest coliving companies in the world and the largest in the Philippines.

This “trailblazing” also created an entirely new local real estate asset class. Despite the enormous demand, we still had to explain the need for MyTown in our first few years, and are only now finally seeing other developers embrace community living. Many incumbent developers started their own coliving brands, and other smaller players are following suit. Indeed, there is plenty of room for others - a recent survey by property services company Colliers found that 45% of working professionals in Metro Manila, a city of 13 million people, are “willing to stay in a coliving facility” as a result of the financial and personal costs of their worsening commute.

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Impact On Lives

One common criticism of coliving is that it often does not provide truly affordable accommodation. The concept behind MyTown however was that comfort does not need to be expensive. We wanted to prove that a young professional’s lifestyle can be aspirational and affordable.

Rental rates start at a level that’s equivalent to or lower than the cost of most young professionals’ commute. This makes the value proposition a powerful one to an individual; forego your commute, spend less time in traffic, and spend less on fixed monthly expenses. One client of MyTown found that over 90% of its employees saved money by living at MyTown compared to when they still commuted every day. This has a direct and positive financial impact on thousands of individuals every day.

Moreover, MyTown goes beyond providing accommodation alone by creating an ecosystem for people to live, work, and play through amenities and services. Our buildings have lap pools, gyms, boxing rings, laundromats, study rooms, coworking spaces, cinemas, karaoke rooms, cafeterias, and social spaces to mingle, work, study, and relax. It also hosts frequent events that aim to educate and entertain. The time our tenants previously spent in traffic is now spent learning new hobbies, furthering their career, or just enjoying some downtime.

Other ways in which MyTown seeks to maximise its impact are visible in the small ways we innovate. One such way is where we worked with a local insurance company last year to introduce the concept of renters’ insurance to the Philippines. We extended that coverage for free to all tenants, thereby giving tenants peace of mind during their stay. Other ‘upgrades’ we offer include daily meal plans, shuttle services, shorter serviced stays for corporate clients, and packages that include a co-working desk in MyTown’s ‘worklab’ spaces.

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Impact On Businesses

MyTown’s governance, safety and security pass the strict due diligence audits and compliance standards of large blue-chip corporations. As a result, approximately 45% of MyTown’s units are taken up by corporate clients. This creates a very robust and diversified revenue profile.

HR departments around the world struggle daily with employee retention. In the Philippines, attrition rates are 25-35% in certain sectors, costing companies fortunes. MyTown provides a more affordable and impactful HR benefit for this generation of young professionals. Living in the city, working hard while enjoying their free time is more valuable to young professionals than a company car. Corporations who have their employees co-live with MyTown agree, and have seen their attrition rates drop up to fourfold.

Especially today, the coronavirus pandemic not only impacts the economy but also affects how corporations operate and people live. In an effort to ensure business continuity, companies are choosing to offer workforce accommodation – operations are easier when employees live a walk away from work (and thereby also avoid cramped public transportation where employees can get infected) in a place that enables employees to exercise, rest and eat well.

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Financially Sustainable

The majority of the recent surge in coliving operators around the world are “asset-light,” which means they lease buildings or condominiums from property owners and sublet those to young professionals. MyTown’s model, on the other hand, is “asset-heavy,” which means it builds, owns and manages the properties. It takes longer to develop, but has significant benefits and is a defensive real estate play.

For one, MyTown owns its properties and therefore does not need to charge the premium asset-light operators need to charge to make a profit; it essentially takes out the middle-man. Moreover, the business is more resilient during downturns as our break-even point is lower and our affordability and flexibility attractive to tenants in down cycles. In upcycles, we do not run the risk of landlord rate increases and can, therefore, fully benefit from increasing demand. Thirdly, we enjoy capital appreciation in owning our properties.

MyTown runs a profitable business with margins that are attractive to commercial real estate investors. This was a pivotal part in the development of MyTown: we wanted to ensure that yields are competitive to ensure scalability and sustainability in a sector that was previously deemed unviable. This goal has enabled the company to raise sizeable institutional funds from Franklin Templeton, one of the largest global investment managers, and SM Investments, one of the Philippines largest conglomerates. Goldman Sachs has said of MyTown that it offers a “wealth of opportunities [and] significant room to scale up.”

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Impact On Co2 Emissions

In Metro Manila, transportation is responsible for around 35% of total emissions. A carbon footprint assessment MyTown conducted with Tangere, a research company, showed that the tenants living in MyTown have thus far curbed over 2,200 metric tons of CO2 emissions by foregoing their commute. This is equal to the carbon dioxide emissions absorbed by around 3,000 acres of forest land for a year, or over 40,000 tree seedlings planted for ten years.

Moreover, MyTown builds by keeping in mind its environmental footprint, using solar panels, recycled water systems for toilet and gardening use, and environmentally conscious designs wherever possible. Aside from the smaller living environments, which cut carbon footprint per tenant, we also optimise window- to-wall ratios and use prefabricated insulated light-wall panels to reduce air-conditioning consumption, and cut significantly on fit-out material by using concrete floors and open ceilings designs.

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Impact On The Community

MyTown has sponsored free accommodation to successful students, local artists during art festivals such as Fringe Manila, entrepreneurs from underprivileged families, and essential staff during the coronavirus quarantine. We similarly provided free coworking desks along with improved internet speeds during the quarantine to accommodate tenants with work-from-home arrangements. We do all this to assist the wider community, and nurture a diverse and vibrant tenant population.

Moreover, MyTown has local hiring programs and CSR-events such as sponsored sports events, “back to school” projects with local high schools, neighbourhood runs, and street beautification projects. These efforts create a supportive local ecosystem where MyTown helps the community and vice versa. Finally, we extend this image as a caring and sustainability-conscious brand by organising tenant outings that educate through beach clean-up drives, tree planting efforts, visits to senior homes, and programs for homeless children.

Affordability, profitability and sustainability can go hand-in-hand and create a virtuous cycle that results in a scalable and profitable coliving business. MyTown has not only built a successful and scalable concept, but also helped shape a new and growing real estate sector in the Philippines, and hopes to be an example for aspiring coliving operators around the world.