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Study top 500 Commercial 2017

LIGHTHOUSES AND GREY BRANDS

Brand management in the real estate industry is becoming more professionalised in big steps – at least for the top brands. The broad mass of brands are however sinking into uniformity, according to the fifth Real Estate Brand Value Study Top 500 Commercial for Germany and Austria.

This year’s results of the Real Estate Brand Value Study Top 500 Commercial starts full of promise. The German winners in banking, funds/investors and project management perform absolutely brilliantly. With values between 90 and 96%, first place Union Investment, DG HYP and WISAG left hardly any brand strengths unrealised. But the front runners in the seven remaining industries also performed remarkably with values between 80 and 87%. The capability of the Austrian champions is very good, if somewhat lower in the overall standard. With a respectable 90% in the area of funds/investors and 77% in the asset management segment, the Immofinanz Group at the same time combined the strongest and weakest winning brands. The fact that in doing so it improved by four or respectively two positions in comparison with the previous year is testament to a disciplined brand management. “In general, the data collected shows that brand consciousness is increasing in the real estate industry”, concludes Harald Steiner, CEO of the EUREB Institute, with regard to the overbearing trend.

 

German real estate brands in the fast lane

The capability of 500 brands in ten sub-segments was collected. In comparison with the previous year, seven segments in Germany were added between 7 and 10% in average brand strength. Austria’s growth was more restrained: for every four segments, just as many stagnated as improved. The values lie between 5 and 8 %. There were however also losses. On both sides the branches of asset management and banking/investors, and in Germany the real estate consultants as well, suffered between 2 and 9 scale values of their brand strength. The decline could be explained by the rampant “one-stop shop approach”. Above all for consultants and asset managers, portfolio enlargement is currently in vogue in order to be able to serve the increasing customer demand for complete solutions. The price for more services is decreasing specialisation, which stirs a lack of distinct image. Let us remember: until JLL Kempers took over, there was a retail specialist at the top. But what can one write about these expertise for the consulting company six years after taking over? In spite of this, JLL is the strongest brand for real estate brokers. Besides being the biggest, it stands out from the competition above all for its quality of implementation and professional expertise.

Logically, the exceptions prove the rule. Since it is only where segment performance sank that there were individual brands with fitter conditions. So for this year’s winning banks, the DG Hyp swapped its position in the rankings with Helaba. And not, for instance, because the Landesbank Hessen-Thüringen weakened. No, the Deutsche Genossenschafts- und Hypothekenbank added noticeably to the performance criteria of regional competence and customer service. In this regard, the increase mirrors the build-up of service levels, which the market clearly appreciates. “Among the strong brands, strategic management has increased in significance, since more and more companies grasp that clear profiling supports their sales”, concludes Steiner.

 

Qualified competition in the top third

The leading brands of many sub-industries delivered a head-to-head race. With 80.1 and 80.4 % of realised brand potential respectively, the two brokers JLL and CBRE differ by only three decimal points. And only 0.9 percentage points behind there remains BNP Paribas in third place, close on the heels of second place. Similar homoeopathic differences between the winners are also present in Austria. For facility managers, IFM Facility Manager and Porreal were 0.7 under 78%; for asset managers, Immofinanz and CA-Immo were only 0.3 under 77%. And between the 87% of the Erste Group Immorent Bank and Raiffeisen Zentral there were only 0.01 % points. The differences for the winners in Germany between banks, facility managers, property managers, or also brokers hot on their heels, was not quite so close. The differences were around 1.5%. And regardless of the country and line of business, there are often exchanges in rankings among the Top Ten brands which made it to the Top Five. For this, better placing was generally a consequence of increased performance and no drops in service as experienced by the others.

DEKA really moved in giant strides (94%) from sixth to second place among German funds/investors. The leap was produced through higher performance values in customer service, asset management and through more experience, as well as a better reputation. All of this counted noticeably to the readiness of clients to re-commission. The company evidently gained in image since it decoupled the appearance of the finance and real estate branches, and pushed asset marketing in a targeted way with innovative concepts.

Similar clear leaps in solution competence and quality of implementation were made by CBRE, which developed from the fourth and second weakest consulting brand. Here the purchases by project manager Preuss or auditor Valteq clearly paid into the competency account. Whether CBRE will manage to make the competence purchased into a long-lasting and sharp profile will remain to be seen.

 

Continuity distinguishes the winners

What the companies do individually as a way to provide their brand with a workout evades the EUREB Real Estate Brand Value Study. What is noticeable, however, is the range which the increasingly powerful brands display. Like a phoenix rising from the ashes to brand prime, which strives for perfection in a disciplined way, leaving nothing out. Austria’s number one funds/investors and asset management, Immofinanz, also redeveloped their brand with their company in an absolutely masterful way. In 2014 it was at fifth/third place, four years ago it was at eighth/sixth place and 2008 it was last. Rather than being associated with service, the financier, developer and asset manager was associated with megalomania, scandal and fraud. With really tough restructuring of the portfolio, apologies and turning the company culture upside down, the executive Dr. Eduard Zehetner brought the company back on course for success, and licked its reputation into shape. With strong attentiveness, Immofinanz communicated its metamorphosis in 2013 and positioned itself as a service provider which puts the customer in the centre. In its international campaign “If Clark Kent preferred to stay in the office”, Superman preferred to save the world from the excellently managed office, rather than flying around in a red cape. “More than office” puts the claim of above-average asset management services in a nutshell. In the level-headed real estate industry, the spot was laughed at, but following the measurements of its strength, the provider honours its brand promises: Both in customer support for existing customers, as well as property analysis, the scale values climbed from 3.2/3.3 to a remarkable 5.2.

On the subject of imposing developments: Union Investment is an industry leader nearing perfection. Just 5 index points are missing before reaching its zenith. The final miles are however especially difficult, and to reach 100 % is almost impossible. Even more imposing is its 3 per cent increase on the previous year. This constant growth does not come by chance, but has a system. As can be read in the Real Estate Brand Book, the company professionalised its marketing through a brand control system introduced by itself in 2011.

 

The majority of brands are nondescript and unexceptional

Increasing professionalization among the top brands is certainly a welcome trend. Yet when we zoom out to observe the entire real estate brand cosmos, results are far less encouraging. In both Germany and Austria, a few vibrant top-tier brands face a barely distinguishable majority of disappointingly nondescript companies. And this ‘profile-lacking midfield’ already starts at #5. The telltale factors? Their markers for brand-building performance dimensions barely reach a ‘satisfactory’. And the competition fares no better. No positive outliers at all. This suggests a brand recognition issue that can only be solved via targeted (re-)positioning efforts. The good news: There is plenty of scope for progress since each segment has distinctly undervalued brand evaluation criteria. According to the study’s findings, for example, the industry lacks innovative estate agents and trustworthy project developers. Here, the top seeds – JLL and STRABAG – barely reach a 3.5 value on the scale. Furthermore, asset managers with an exceptional long-term tenant support track record seem to be sorely underrated. Here, too, even segment leader Bilfinger leaves plenty of room for improvement at 4.0. In short: There is still plenty of space and scope for well-positioned brands in the real estate industry. Which of these will join the marketing professionalization bandwagon – or even pave the way for new benchmarks – will be revealed in the next instalment of the Top 500 Commercial Real Estate Brand Study.

Why it makes sense to measure brand strength

A short digression on brand theory: According to the ideas of classical marketing, reputation and trust are produced from professional brand management. The reputation of a brand is produced by adding up the attitudes of all stakeholders. The clearer the actions of a company cover its brand values, the more strength and trust is generated by the brand. If the positioning is lacking, companies are difficult to grasp for market participants, since there are no classification criteria. As a consequence, companies squander opportunities to make sales work easier thanks to a good reputation, e.g. by anchoring in a relevant set or implementing premium prices on the market. Whether a brand ensures the desired effects on trust are created can be proven by systematically measuring the market value. On the basis of a representative survey, this year around 16,500 industry experts were surveyed for the Top 500 Commercial Germany and Austria.  In this context, “important” means proven in previous rankings and supplemented with new, promising brands. In a total of ten sub-industries, each respondent provided information about brands which are relevant for his field of work. Surveyed with support and without, in each segment 18 brand assessment criteria and five value driving brand factors were determined. The first are dimensions such as dependability, price-service ratio or innovation; the second are potential drivers such as brand profile, customer loyalty or readiness to recommend to others.

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