RICKI OSTERTHUN (Head of Finance - Engel & Völkers Resort) presentation about the potential and requirements of the German market (VIVA IN PORTUGAL's Residential Tourism Conference)
1. The potential and requirements
of the German speaking markets
www.engelvoelkers.com/resorts
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2. ENGEL&VÖLKERS RESORTS | The German market
Reasons for an investment
Investment
Investment
Investment / /Private Use
Investment Private Use
Private Use
Private Use
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3. ENGEL&VÖLKERS RESORTS | The German market
Favourite destinations for an investment
Europe
• Spain
• Italy
• Portugal
• France
• Greece
• Germany
Worldwide
• USA
• South Africa
• Dubai
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4. ENGEL&VÖLKERS RESORTS | The German market
Purchase decision criteria for an investment
Macro
• Family
• Country – Accessibility
• Language
• Medical Support
• Weather
• Costs
• Interest of Family
• Service Concept
• Political circumstances
• Security
• Utilisation
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5. ENGEL&VÖLKERS RESORTS | The German market
Purchase decision criteria for an investment
Micro
• Decision of the family
• Additional costs
• Size of the property
• Fitting
• Daily routine
• Accessibility - Airport
• Accessibility - Infrastructure
• Security within the property
• Service und Maintenance
• Contracts
• Furniture
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6. ENGEL&VÖLKERS RESORTS | The German market
Requirements demanded by German-speaking customers
Real estate:
§ Views, open view, at best water view and landscape
§ Clear floor plan / layout, not too intertwined, rooms not too
small
§ Parking space in building, short walk from parking space to
apartment
§ Private sphere through sufficiently large balconies and
terraces hidden from view
§ Pool
§ Small communal facilities for owners
§ Ceiling height
§ Windows down to the ground
§ Bathrooms with windows
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7. ENGEL&VÖLKERS RESORTS | The German market
Requirements demanded by German-speaking customers
Quality:
§ Brand manufacturers
§ Technology of the highest level
§ High-quality material
§ High-quality kitchens, bathrooms and fittings
§ High-quality doors and windows
§ Very good finish
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8. ENGEL&VÖLKERS RESORTS | The German market
Requirements demanded by German-speaking customers
Infrastructure:
§ Excellent infrastructure within the project and to the airport
§ Distance from sea and beach
§ Shopping possibilities for daily requirements
§ Restaurants
§ Leisure time facilities (indoor and outdoor)
§ Distance to the next towns
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9. ENGEL&VÖLKERS RESORTS | The German market
Requirements demanded by German-speaking customers
Security/Service concept:
§ Comprehensive offer for real estate but also other services
§ Comprehensive Service concept
§ Transfer, catering, laundry (clothing)
§ Preliminary set up for alarm system
§ Intercom system
§ Cameras
§ Caretaker
§ Concierge Concept
§ Comprehensive Spa and Wellness supply
§ Shopping area
§ High quality restaurants
§ Good medical Supply
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10. ENGEL&VÖLKERS RESORTS | The German market
Market performance and future development
§ We are in times of a financial crisis and investors are very risk averse
§ The international markets have changed dramatically
§ Supply: Secondary homes – a former supply-driven market
§ Hundreds of developments neglecting architecture, service, maintenance and above all the unique selling
prepositions in a highly competitive surrounding were built in the past decade resulting in overcapacities
§ Demand: Different customers with different needs
§ Especially UK as a former strong buyers market suffered
§ The currency parities devalued all assets and banks do not grant more than 70% mortgage loan to value
for the buyer.
§ Market transparency: Customers have access to a vast range of information through the internet.
§ Usage intention has changed: A growing majority of customers use the property themselves, looking for
uniqueness, high quality and a profitable return on investment.
§ The German speaking markets are stable and strong, increasing demand in tangible assets
§ Large aim group with strong purchasing power and adequate capital assets in the German speaking markets
§ In 2008, E&V had a total transaction volume in real estate of approx. 5 billion EUR and a brand commission
turnover of 146.5 million EUR
§ Until 06/2009 E&V Residential Germany had a turnover performance of plus 15% compared to 2008
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11. ENGEL&VÖLKERS RESORTS | The German market
Successful marketing and customer communication
The German customer highly quality sensitive, with strong safety needs and high expectations towards all
contractors.
Customer
Customer communication and service process moves in
Customer approach Information and
Site visits Sales and after sales
and lead generation customer contact
services
• Ad campaigns • Brochures • Travel • Contract management
arrangements • Financing consultancy
• Online/ Internet • Facts & Figures
for customer
• Direct • Exposés • Consultancy and
• Site visit support concerning
marketing
• Building program construction and
• Events descriptions furnishing
• Highly qualified
sales personal
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12. ENGEL&VÖLKERS RESORTS | The German market
Successful marketing and customer communication
Customer approach and lead generation – marketing tools in the German
speaking markets
Advertisements are the most effective measurements to target the market -
Requirements:
§ Large formats (i.e. Double DIN A4/ ½ page)
§ In representative media
§ i.e. Welt/ Welt am Sonntag
Style: Daily national newspaper/ WamS every Sunday
Circulation: Welt: 280.387 / WamS: 402.069 (Reach Combination
1,2 Mio.)
§ i.e. FAZ/ FAS
Style: Daily national newspaper/ FAS every Sunday
Circulation: 362.396/ FAS 336.513 (Reach: FAZ/ FAS: 1.6 mio.
readers in Germany/ worldwide)
§ High quality lifestyle images
Product quality, reliability and positioning
Strong tool for lead generation
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13. ENGEL&VÖLKERS RESORTS | The German market
Successful marketing and customer communication
Toscana Resort
Castelfalfi
Double page,
Welt/ WamS,
June 16th 2009
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14. ENGEL&VÖLKERS RESORTS | The German market
Successful marketing and customer communication
Customer approach and lead generation – marketing tools in the
German speaking markets
Online measurements
§ Internet presentation (homepages)
§ Internet exposés
Results:
§ Media usage in Germany is still very print focused
§ Online marketing is important and a growing instrument
For the main target groups online marketing is not
effective and efficient.
Source: Media Focus Werbedruckstatistik, 06/2008
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15. ENGEL&VÖLKERS RESORTS | The German market
Successful marketing and customer communication
Customer approach and lead generation – information and
sales material for the German speaking markets
High quality brochures – Content:
§ Region and location, surrounding/views
§ Amenities, service, maintenance and security
§ Specifications, layouts and master plan
§ Information about the developer
Facts & Figures, Building description
§ Detailed information about the project
§ Detailed information about the architecture
§ Detailed information about tax and legal requirements
§ Product characteristics in detail
Exposés – Individual Offers according to the customers needs
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16. ENGEL&VÖLKERS RESORTS | The German market
Successful marketing and customer communication
The German customer has high expectations concerning a site visit of the project.
Tasks/ requirements in the customer service process:
§ Travel arrangements for customer
§ Highly qualified sales personal
§ Site visit program
§ The host takes full care of the customer from the arrival to the departure.
§ The journey will be planned for the customer; he will be given an itinerary incl. sightseeing. (recommendation 2
days).
§ The customer will be welcomed at the airport and taken to the hotel (incl. welcome package).
§ A detailed discussion will take place with a subsequent viewing of the showrooms. Special apartments will be
selected before the inspection, depending on the wishes and requirements of the customer.
§ The host will be at the customer’s disposal for questions and wishes for the entire stay.
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17. ENGEL&VÖLKERS RESORTS | The German market
Sales Service
German customers need comprehensive services and
consultancy during the purchase process.
• Support and advisory services before, during and after
purchase
• Personalised offer and preparation of relevant data and
documents
• Contract management
• Financing consultancy
• Placement of tax and legal consultancy
• Consultancy and support concerning construction and
furnishing
Example:
• E&V Resorts as a developer in Portugal in cooperation
with Portuguese constructors to ensure high quality
standards, fast communication, transparency and local
coordination
www.engelvoelkers.com/resorts
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20. ENGEL&VÖLKERS RESORTS | The German market
Conclusions
Conclusions concerning German customer behavior:
Media usage:
§ German customers still rely on classic print media
§ Greatest effects are measured, if the advertisements are in high quality, very representative and support the products‘
positioning
Material:
§ German customers require highly detailed information material to satisfy their safety needs
§ High profile documents alleviate the sales process and ensure transparency for the customer
§ Time intense, individualized offers and exposés are expected by the German customers
Service:
§ The German customer requires various services, security, and transparency during the communication and sales process
§ The German customer needs to be addressed with great sensitivity, with great time effort to create trust as a basis for
selling
§ A full service concept has to be offered including highly trained sales staff, consultancy and 100% customer orientation
www.engelvoelkers.com/resorts
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21. ENGEL&VÖLKERS RESORTS | The German market
Conclusions
Conclusions concerning the German speaking markets:
§ There is a stable and growing market potential due to the strong customer base in the German speaking region
§ The German customer is rather risk averse and has great safety needs
§ The German customer requires various services, security, and transparency during the marketing,
communication and sales process
§ The German customer needs to be addressed with great sensitivity, with great time effort to create trust as a
basis for selling
§ A full service concept has to be offered including highly trained sales staff, consultancy and 100% customer
orientation
www.engelvoelkers.com/resorts
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22. Thank you for your attention!
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23. ENGEL&VÖLKERS RESORTS | The German market
Executive Summary E&V Resorts
Who is Engel & Völkers?
§ Established in 1977
§ 3.340 employees/agents worldwide
§ 382 residential real estate shops/ offices and 540 residential licences worldwide
§ 36 commercial offices and 32 commercial licences
Who is E&V Resorts?
§ Since 2004 - E&V Resorts is a full subsidiary of the E&V group
§ Specialized in the tailor-made marketing, sales and strategic consultancy services for luxury resorts
§ Target market: German speaking countries (Germany, Austria, Switzerland) and Europe
§ Team: Efficient and customer-orientated with experienced in-house architects and marketing and sales experts
What is our service portfolio?
§ Consultancy services for every stage in the development process: Feasibility studies, SWOT analysis, master
planning, master concepts and more
§ Tailor-made marketing and sales for your resort using the strong E&V brand and the extensive network
How do you benefit from a cooperation with E&V?
§ Market entry opportunity: Target the high potential German speaking market with a professional cooperation
partner!
§ Image transfer and market access: Be part of the E&V success and profit from the network!
§ Individual strategies: Benefit from the years of experience!
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