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I have spent more than 25 years in China and know the country not from books but from personal experience. Working in the luxury property and design industry has brought a wealth of experience over the years. The unique scheme of dealing with property developers and niche factories, suppliers of interiors for the most luxurious properties, has taught me many techniques that can be used in Europe as well. For luxury developers, I came up with unusual property projects for the residential sector, that they used as the company's calling card to attract a high-end clientele. In coalition with factories, where I used to be a master designer creating unique collections for the manufacturers, we formed a group of like-minded people to implement those kinds of projects.
Unusual look at property investment on Costa del Sol
As a rule, property developers tend to go the beaten track, following the stereotypes of the market: whatever everyone else is doing and whatever is currently deemed to be in trend. However, this practice, although ubiquitous, leads to competition in the market and, consequently, to a universal rate of profit, which is a certain standard in the industry. Usually, it is 15-20% of profit.
We are looking for a different kind of investment on Costa del Sol, where the rate of return is not commensurate with industry standards and could be up to 100% or more, depending on the project idea.
Such an ambitious application requires ambitious people and ambitious ideas. It requires a completely unconventional view to the world, to investment, to architecture, to interior design, to post-sales service and to the sales philosophy itself. What is not available to the majority is available to a select few.
Most would say this is impossible in the industry, otherwise there would be examples of this kind in the marketplace. But as Albert Einstein said, "There is always some ignorant person who doesn't know it. He is the one who makes the discovery." Such discoveries and such opportunities may not be mass-produced. That's why we don't see examples on the market. But that doesn't mean they don't exist.
I have spent over 25 years of my life in China and have come up with just those kinds of projects for the most well-known property developers. They are all very exclusive and spot-on type. Residential architecture and investment projects of this level are not intended to be widely advertised. That is why they remain in a special niche that only the initiated know.
Extensive experience in the luxury industry, a special talent to see uncommon things, artistic perception may give a lot to invent unusual things. "Genius is just an unusual way of looking at things". as Einstein said.
My niche in the market is exactly such projects. And only in such projects we are ready to become an investor.
Coalition with co-investors for the implementation of unique projects
Yes, this kind of project requires investment that is significantly higher than developers or private investors are usually accustomed to. But the result is not comparable to the standard approach. We call this as unique coalition with co-investors to give them maximum benefits.
How is it possible for the rate of return to be so high? I try to tell you. However, in order to fully understand the idea, we have to meet in person. Much of what we talk about here may not be disclosed to the public and remains confidential information. And it's clear why.
First rule. The price of the product should seem to be lower than the product value
In other words, the property should visually look more expensive than the seller is asking for it.
This is partly the talent of its creator.
How is this done?
I have written in my previous articles much on this topic. I recommend you to refer to the following materials:
But here, I shortly list partially those elements defining the so-called visual value. Exactly visual. The price of luxury products, and the property we are talking about is just this class, is always identified visually, that is, by its appearance.
This is exactly how fashion brands, global jewellery brands, do it. Why are they able to allow themselves to do this? Because their product is a designer's product and do not belong to mass production, there are no similar products and, therefore, there is no chance to compare prices. No one even thinks of adopting a similar practice for the property industry.
In order to have high visual value, there are several conditions to be fulfilled:
- the property developed for the investment project must be unique. This means that it is difficult to find a match on the world market. This is the talent of the creator and the most difficult task;
- When designing, visually such a property should look bigger than the announced construction figures. In other words, if the developer says a villa is 1200 square metres, then visually it should impress with 1700 square metres, for example. The figures given in the article are not final, for illustration only. Everything depends on the project. But the principle remains inviolable;
- WOW effect. This is a tool not used on the market at all, but it is one of the key and decisive metrics in determining the selling price. I apply this effect to almost every room, taking into account the maximum perception at the beginning and at the end of the property viewing at the time of sale.
What is the WOW effect? It is the ability to create a perception where the buyer should have a slight sense of euphoria about what they are seeing. Depending on the room, this effect may be stronger or weaker, but the sequence of perception should lead to an accumulation and amplification of it. This has a significant impact on the generation of the selling price.
- the well-known brand as a partner, in coalition within the project. However, it is worth noting here that a simple name such as Villa Fendi, Villa Lamborghini and so on, simply helps to speed up the sale, but not generate the sales price we need.
In our case, we are talking about a completely different approach and completely different names. And not just names, but a special approach, when the brand name is associated with a visual line in architecture, interior and landscape. Then and only then the WOW effect will be amplified many times over;
- with all the exclusivity involved, the cost of the project should not go beyond the budget estimated for a property of a similar size, that the market calls luxury property. We don't need luxury property. We could never earn such profits on it. We need a different class of property. I call this class " Collectible Property" .
If we are able to create that collectible class, the question becomes, where is the upper bound on profitability? And this is where the story could just be getting started. The upper limit depends on whether the property is capable of reaching the level of a global franchise.
That is why there are no parallels, because only a few are able to reach that level. Their brain cannot be stolen, they are special people, you have to co-operate with them. Who could be interested in franchise, or perhaps just a licence for the copyright repeat? The first place is China with its enormous industry. The projects made in Europe with big brands, elevated to the level of collectible class are a priority for this country without doubt. A licence for just a few similar projects, say 5-10 units (which is negligible business for China) could bring profit returns that the market is unable to even dream of.
For this, you need to know that country and have well understanding of the mentality of the nation. Given that I have been associated with China for 25 years, this idea is completely realistic.
The issue here is the investor, or rather the co investor: an investor of a special character who is able to see a little further than the standards and stereotypes of the market.
How do we achieve low production costs?
This is the key question. If the construction costs are predictable and depend little on the design of the architecture (design is not a price, design is an idea), then everything else is a stumbling block. In order to realise such ambitious projects, it is necessary to be able to produce all the design items for both facades and interiors.
At the same time, the cost should be low and the production possibilities as limitless as possible. This gives the designer a flight of fancy to create masterpieces. This is exactly the kind of production facilities we own.
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