Do brands really add value to real estate developments? (II)

by Alvaro HIDALGO

After our first blog entry on this last February (http://bit.ly/qQujFJ), the topic has become hotter and hotter.

More brands are entering into this, some of them with mixed results. The more negative of which is  – as in most cases – not due to the concept itself, but to its faulty application. 

Is it the right brand in the right market?

Introducing a successful brand in a country/region in which it is not known is risky business in itself.

And it is so, even if the objectives are limited to the core brand products, not to mention trying to export a brand and simultaneously enter a non-core sector. 

The second common mistake is branding just an average real estate project in which the brand brings only a stamp. Why should someone pay something for nothing?

  

So, when do brands add value?

Quite simply, when the resulting product becomes a better one by incorporating the qualities and know-how that the brand represents.it is just getting back to basics, and  High-end and Ultra Luxury brands are proving their ability to do this in earnest.

Back to basics

By successfully translating their respective expertise into the real estate and hospitality sectors, quality brands bring to the table what is expected from them, i.e., creating and maintaining value (the latter is proving to be a capital point under this market). 

An excellent cross-comparison on this was published by Sally Howard in Forbes http://onforb.es/lMJGey.

But then, there is the other side of it.  Real Estate is probably the most important statement and expression of lifestyle.

Brands bring similar people together

It is true that in some cities the location of the property provides by itself this flare, but in many other places the results of the location-identification equation are not clear. 

Thus, the incorporation of a well established brand that impersonates the essence of lifestyle to a property investment is the natural step to follow.

Moreover, people identify themselves with a certain image, and since most of us want to live in places surrounded by people with similar interests and values, branded property ensures, in a way, that the owners/users will be in contact and in the vicinity of like-minded people. Brands, In the end, bring similar people together.

This natural market segmentation reduces the buyer’s decision time; besides, there are not so many properties available under a specific brand. Thus, reduced decision time translates into quicker sales and easier cash-flow management, which benefits the developer.

Brands are powerful tools and, as any other tool, when handled with care provide the desired results. 

By creating a valuable product that will keep its value in time, branding properties provides benefits for all parties involved.

Of course, under the brand umbrella there are many different standards.....And none can compare with the reputed “Coolest brand”: http://bit.ly/mdMAmz

For more information please contact  FIRSTLOGIC Consulting www.first-logic.com

 Pictures courtesy of wozcup2011.com ; events.piaget.com ; thedailytruffle.com

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