Luxury homebuyers’ expectations are not anchored to the physical property alone. While they do pay attention to location, privacy, architecture, design, and facilities, their demands go beyond the bricks and mortar, with environment that inspires the creation of new experiences among their top priorities.
Marketing efforts are constantly being improved to keep up with demands from VVIP clients, with technology giving those efforts tremendous push. Virtual reality (VR) tours are fairly common nowadays, but Sotheby’s International Realty has gone beyond that.
A series of videos that the company produces goes way beyond the perimeter walls. Called Houseguest, each video runs for approximately three minutes and is heavy with lifestyle references and imagery, as well as high production values. Surely, details of the property where guests stay are constantly in the background, but the focus of the video is clearly on the experiences of houseguests not only within the property, but more so in its wider location.
Sotheby’s International Realty has been leveraging on digital marketing assets that are at its disposal. Its single global website, sothebysrealty.com, houses and hosts all listed homes offered by franchise partners in almost 70 countries. The company also provides high-definition VR tours of properties on mobile and desktop platforms, as well as on Apple TV.
In 2016, sothebysrealty.com inked an agreement with juwai.com, a leading property search website in China, which boasts two million monthly visitors. The partnership is expected to boost interest among Chinese buyers of international luxury properties as leads are redirected to the global website.
There are over 880 Sotheby’s International Realty offices around the world, managed by affiliates to sell luxury residential properties and conduct real estate-related businesses. Besides formidable marketing infrastructure, it has 20,000 sales associated in almost 70 countries across the globe.
- A SINGAPORE LIST
- A STRONG PARTNER
- INDEPENDENT PERFORMANCE TARGET
- DEMAND FROM STEADY TO HIGH
A Singapore List
Sotheby’s International Realty is positioned to support List Sotheby’s International Realty, Singapore, its newly organized franchise office. Besides a range of operational, marketing, training and business development resources, List Sotheby’s International Realty will have access to and presence on sothebysrealty.com, and coverage in international periodicals with whom Sotheby’s International Realty has ongoing media partnerships.
“We have amazing relationships with digital partners around the world. We have set up an electronic referral system to handle leads. Within our network, a referral goes through a multilingual, multicurrency system,” says Michael Valdes, Global Vice-President, International Servicing for Sotheby’s International Realty Affiliates LLC. “We open up the properties not only to specific markets, but to the entire world. And we’re the only company that does that.” Valdes adds that the company is in final negotiation with WeChat on a global corporate channel.
Valdes was in Singapore recently for the launch of List Sotheby’s International Realty Singapore. “Sotheby’s International Realty sells franchises under the brand. As we look at awarding our franchise to a potential affiliate, we also look at the market, our appetite for it, how the luxury segment might do there, and what the potential might be,” Valdes explains. “When we consider potential candidates (to become affiliates), we look at the future for the brand within those parameters. We will not be in every market – we don’t want that; our focus is on the global luxury market.”
“We open up the properties not only to specific markets, but to the entire world. And we’re the only company that does that.” - Michael Valdes
- A SINGAPORE LIST
- A STRONG PARTNER
- INDEPENDENT PERFORMANCE TARGET
- DEMAND FROM STEADY TO HIGH
A Strong Partner
The List Group, with interests in property development, construction, and asset management, has bought the rights to launch List Sotheby’s International Realty Singapore, adding the new affiliate office to three others located in Japan, the US (Hawaii), and the Philippines. It is also slated to open List Sotheby’s International Realty in Hong Kong in the third quarter of this year, and in Thailand later.
“The List Group is led by (CEO and President) Hisashi Kitami, who has run a very successful real estate development company in Japan for over 25 years, and has been an affiliate in Japan under our brand for eight years now. He has run an incredibly successful business for us, and is a great ambassador of our brand,” Valdes says.
In Japan, the List Group has developed and sold over 7,000 condominium and housing units. Valdes shares that List Sotheby’s International Realty has nine offices in Japan, and over 200 agents. “On of our top international affiliates is the List brand in Japan. Last year, they sold quite a lot, and then did their growth trajectory with two different offices that they purchased off our brand in Hawaii, which is the direct feeder market into Japan. From there, they moved their interest into other territories in Asia. We then felt very comfortable with awarding them with further territories based on what they have achieved.”
"The List Group, with interests in property development, construction, and asset management, has bought the rights to launch List Sotheby’s International Realty Singapore, adding the new affiliate office to three others located in Japan, the US, and the Philippines."
- A SINGAPORE LIST
- A STRONG PARTNER
- INDEPENDENT PERFORMANCE TARGET
- DEMAND FROM STEADY TO HIGH
Independent Performance Target
List Sotheby’s International Realty, Singapore will offer brokerage, project marketing, investment advisory, research, and consulting services. COO and director Leong Boon Hoe, former managing director at CBRE Realty Associates Pte Ltd, heads the Singapore affiliate office; he is also setting up an investment team to advise and broker cross border transactions in Southeast Asia.
As an independently owned and operated franchise, List Sotheby’s International Realty Singapore will operate independently, Valdes points out. “As long as our affiliates follow our parameters of protecting the brand, and comply with the royalty requirements, we will be there to support them.
“But if an affiliate faces financial difficulties that place our brand in jeopardy, then we will have to step in and protect our brand. If there are instances of reputational risks of the brand – a very ambiguous statement – we would step in. There are other parameters, but they are mostly financial.”
Valdes clarifies that they “don’t set performance targets formally; we work an affiliate’s business plans and provide advice and historical experiences that we have. We set the floor but we don’t set the expectations – which, of course, is floor plus. I’ve been with the brand for 12 years; based on my experience and background in finance, I can offer them advice.”
- A SINGAPORE LIST
- A STRONG PARTNER
- INDEPENDENT PERFORMANCE TARGET
- DEMAND FROM STEADY TO HIGH
Demand from Steady to High
Demands for luxury property from mainland China remains high, Valdes admits. Sotheby’s International Realty’s alliance with juwei.com is a testament to that.
In 2015, a report said, China will contribute 74 per cent of new billionaires in Asia. In 2020, the population of Chinese dollar millionaires is expected to reach 2.3 million – a 74 per cent increase from the figure last year.
Measures set up by the central government to curb new acquisition of overseas properties are not likely to affect the global luxury market, Valdes says, because they’ve already had their money outside of China for some time. “They have diversified their finances to a degree where those restrictions won’t affect them; they’ve been very wise investors,” Valdes says.
A report says that Chinese investors tend to favor real estate as an asset class, as supported by acquisitions of at least US$350 billion worth of properties in the US between 2010 and 2015. But it is not only the Chinese investors who are snapping up luxury real estate. “Overseas property acquisitions among mainland Chinese are often tied to the education of the next generation; hence, they tend to buy in cities where major universities are located. Health is another factor, especially among wealthy Chinese buyers who foresee healthcare being important in advancing years.”
Chinese buyers acquiring properties for investment tend to buy in key cities where financial returns on real estate investments tend to be steady: San Francisco, Los Angeles, London, Sydney, and Melbourne. Others prefer cities where there is large Asian population such as Vancouver and Toronto.
Meanwhile, a trend of Chinese luxury property buyers breaking into new markets is developing, Valdes says. “We’ve seen it in Miami, for example, where Swire Properties has built one of the largest mixed-use developments – Brickle City Centre – in the US. We’ve not seen Asian investors going into the Miami market before. I guess it has to do with the developer that they know and trust.”
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