FEBRUARY 2013 |
www.opp-connect.com
INTERVIEW
CONSULTANCY | 15
Look on the bright side H
ow do you ensure your failure in today’s leisure property market? Easy! Do exactly what
you did in 2007. Such is the (only slightly) tongue-
in-cheek opening statement of Pied a Terre, a consultancy group now making waves in as diverse projects as Japanese ski resorts, Spanish development rescue and, their latest project, a spectacular 200 unit beachfront resort in Mauritius. “I’ve lived through the worst of the boom and bust myself,” says David Honeyman, sitting on the terrace of his Andalucian villa overlooking the Los Naranjos golf course outside Puerto Banus. “In 2007, we had 200 staff around the world, selling €300 million worth of property a year. But although the market slowed down slowly and steadily, we all ignored it. We pretended that it was just a blip, when it actually was the beginning of a crash that reverberates to this day – and it’s only now showing any real signs of market recovery.” It’s early January and David’s two sons are playing football in the garden. It’s 20 degrees centigrade in the sun and his wife Michelle is preparing a barbecue for friends. Life is still good in Spain.
“The fundamentals are still here:
it’s a lovely country, with a great climate, and the dream of a second home has never gone away; but the world economy is different. The market has undergone a massive correction. Spain is affordable again and, most importantly, those who have learnt from the crash are set to do well again,” says Honeyman.
“Consumers are now much better educated about the market and much more discerning than ever before. They have a well defi ned checklist of what they want from an overseas property purchase and they will not be easily beguiled into buying something unless it really is a great product and sound investment.”
It is these key changes that David is now applying in his new business, Pied a Terre AB, a partnership with three old friends and colleagues: the legendary Dwayne Hill, who has probably sold out more resorts than anyone else in the Mediterranean real estate belt; Nils
“Consumers are now much better educated about the market and much more discerning”
meter plots, for sale at three million dollars each, with a club house in the middle and a rather over-optimistic rental programme in the brochure. In other words, exactly the same type of development that has sunk without a trace throughout the region since 2008. Nobody wants this stuff any more!” Pied a Terre’s principles for launching successful resort & leisure developments in 2013 can be summarized in four key points:
• Build smaller, build better, build more affordable
There are massive deals to be had in the residual market. To compete, you have to offer spectacular design, exceptional
• Brand, brand, brand
Non-branded, in-house managed leisure property resorts consistently fail to generate rental returns for the investors. So brand it. Pied a Terre works hand in glove with all the major hotel brands: Starwood, Marriott, Wyndham, Accor and Hyatt, as well as the smaller boutique brands.
• Go where the money is The survivors in our industry are those who have gone after the customers, wherever they are, and created the demand. Case in point: The First Group in Dubai. When the UK market imploded, they went to Africa, India, Kazakhstan and Pakistan and not only maintained their sales but grew it, in the middle of a world recession.
• Get the best sales and marketing team you can possibly fi nd Pied a Terre’s business model is simple: they create a solid, well thought-out,
Wetterlind, a Swedish developer and marketer who started on the Costa del Sol in the late 1980s and then built up a huge eco development business in Bali and Thailand; and Ian Cook, who has been running large scale direct marketing operations throughout Asia and Australia for the past 15 years. Together, they have created a sales & marketing machine which works in- house for developers in Europe, Africa, the Middle East and Asia.
So what have they learned from the recession that they are now applying in their new resort marketing business? “Well, some people seem to have learned very little,” says Ian. “We recently did a study for a resort developer in Phuket. The Phuket market has been hit just as hard as Bali, Koh Samui, Langkawi, the Seychelles and all the other Asian paradise island resorts. “A massive over-supply of luxury villa projects, sold to expats in Hong Kong and Singapore, none of them generating any rental income, and all of them costing their owners fortunes to maintain. Almost all of them are falling in value. Not a good formula. “So what did we fi nd at this project? Lovely brochures showing 40 odd 5-bedroom villas, set on 5,000 square
After the global fi nancial crisis, many started to despair of any improvement. Pied a Terre, a consultancy group operating in a diverse selection of markets, have seen the good times and the bad. They think that things are looking up – provided, of course, property professionals don’t repeat their mistakes of the past
Fun in the sun | Pied a Terre’s newest 200-unit project is in Mauritius
build quality, and build smaller, well planned units that are affordable to purchase and much easier to rent out than residential style homes.
exceptionally detailed marketing strategy, involving every aspect from inspection visit, off site marketing, on line marketing, resort area sales and agency networks, and then sell themselves using their own in-house sales teams.
“Agents are great for referrals and leads, but you absolutely, positively have to have your own sales team,” says Nils Wetterlind. “We create the entire sales and marketing infrastructure for developers: then we fi nd the clients and we make the sales. We work on an exclusive basis only; we are extremely focused. When we launch a project, we push as hard as we possibly can and shout as loudly as we can from every available rooftop. Resort properties have about the same shelf life as oysters these days. If you don’t create a huge buzz immediately you are dead in the water.”
So no magic wands, then? “Sadly not,” says Wetterlind. “Get your basics right, do your homework, get a good team, then strike hard and fast.” Judging by the success of Pied a Terre’s projects to date, this sounds like solid advice to us…
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