Unique investment. Development on Costa del Sol. The property is being upgraded to collectable level with the participation of one of the world's most renowned brands of the first magnitude, with the subsequent sale of licenses for the project's limited edition to international markets.
Content:
Next generation of property investment
Sooner or later, a new trend is bound to replace the traditional stereotypes that have swept the entire luxury industry. Today mass market has spread even in this seemingly unintended niche of the market. Luxury products have always been the privilege of the chosen few, and it was on these principles that great brands and great names were founded. However, today we see how even the most famous brands, always surrounded by a aura of sophistication and belonging to the elite class, have descended to the level of mass production, making their products available to the public. They produce many low-cost accessories, sportswear, footwear and home products.
The very concept of luxury is blurring so much and becoming such a casual concept that its meaning is losing its sense. Since this article is dedicated to the property industry, it is more logical to dwell on this very issue.
Stereotypes of the property market lead to depersonalisation of the most expensive acquisition for a person: his or her home. Trends imposed by the market make the consumer believe in some new fashion in architecture and interior design in minimalist style and that is the top of perfection. The only difference is the location and size of the property. As far as stylistic solutions are concerned, most properties are similar to each other as two drops of water. However, they are all advertised by the market as luxury goods.
Is it possible for investors of such housing to earn enough? The average figures for return on investment today are 15-20%, and this is very logical. Construction and architecture, even the luxury category according to the market and its experts, has also turned into a mass market. Yes, it has its own segment on the market, different from middle class property, but still this state of the market can be characterised as a luxury mass market.
Based on the topic of the article, it must be about a new trend. That's right, and this trend is ultra luxury real estate, which I assess as collectible property. It's not about building individual homes, it's about creating properties that have the potential and should remain valuable after many decades. These are the kind of niche projects that could bring very different returns to the investor. Few people are able to see those opportunities. Most people follow stereotypes.
It's like the situation with bitcoin. In the early days of the crypto industry, only a few people were able to see new opportunities in it. The rest came to it only when crypto investments became so obvious that only a blinder could fail to see it. But who benefited? Only the pioneers who made a huge amount of money by taking advantage of such an investment opportunity at the very beginning.
The very same approach exists in real estate. While the rest of the world sleeps and does not see it, the niche is not occupied, and opportunities to be the first are open.
Unique Investing in a Collectible class of property
These new opportunities are as follows.
Firstly, it is the design of projects that would be fundamentally different from everything that exists in the real estate market. They must be unique in order to capture an unoccupied niche. This refers to the solution of a complex problem: creating a unique architecture, interior design, landscape and post-sale service, the service required by the clients of such property, allowing them to offer a special image and lifestyle.
Secondly, these challenging projects should be understood by few people. They are outside of the market stereotypes.
One of my famous clients, Jackie Ma (Alibaba Group), gave me a lot of valuable advices. The most remarkable of them was one I still remember and follow. The advice was directly related to running
a business – how to find your niche and distinguish yourself from the others, and how to get to somewhere before the others. However, his point was even more ambitious, “We have to be there today where you have no hance to ever be”.
Here’s his first piece of advice: “When they bring me one of their investment projects to consider, before I make a decision, I always ask my assistants for advice on what they think of it. If their comments are positive, and everybody finds it perfect unanimously, I always throw it away as trash, without regret.
If such projects are clear to everyone, it means that there is no uniqueness and we would have to face competition. There is no point wasting time. But, if the project is such that nobody understands it, but I still feel that there is inherently something in the idea, I keep it for further investigation. That's where the uniqueness may be hidden. I like these kinds of projects, which only the initiated understand at this stage.”
Thirdly, you need to have talent and sufficient breadth of thinking to come up with such ideas. And also to have an irrepressible character to promote such ideas. Only the obsessed would undertake such tasks. The world always responds to them with aggression, but only those who are not afraid to move forward, boldly defending their ideas win. There are many such examples. They are examples of those ignorant people who didn't believe their ideas were impossible. They made the discoveries.
That's why breakthrough ideas are so rare in the market. But these are the ones that may be of greater interest to investors who are able to see new opportunities, a new bitcoin.
Investing in hundreds of per cent profit. Creating projects for global expansion
Is it possible to earn 100-200 or 300% profit on property investments. Most experts would say this is absolutely impossible. And they would be right. However, experts understand very little in this business and all their advices are based on the experience of either the past or the current state of the market. What do they know about the future? If they were so brilliant, they would be millionaires themselves, not advising others.
"Beware of consultants and lawyers, they may kill any idea and the business itself"
Jack Ma
Why does the collectible property niche remain untapped? It is because nobody knows about it, it is little understood by the majority, it requires extraordinary talent and large investments. Investors and developers are used to going off the beaten track and taking as little risk as possible.
But this does not mean that there are no white crows in the world. Someone saw the enormous potential in bitcoin and believed in the idea. They made the discovery while others were sleeping soundly.
Bernard Shaw said, “Only 2 per cent of people think, another 3 per cent think that they think,
and the remaining 95 per cent are afraid of thinking, even on the pain of death.”
Reading these lines, you realize the category you want belong to. I stay in that 5 per cent, at least convinced that I think.
After a long journey around the world, working in different countries within in the luxury industry related to real estate and interior design, I finally found myself in Marbella, a stunning resort, a town in southern Spain. Here I found my niche for the business.
One of the techniques Jackie taught me was to first find the niches in the luxury segment.
These niches always stand apart and such a place is usually not occupied or has little competition.
The secret and the know-how are on the ways to keep the cost no more than a regular project of a luxury level. Everything is hidden in the unique ability to control the cost of production, and an
opportunity to create without regarding the capability of the manufacturers. It's impossible to create great interiors every time, when you are looking back at how much it could cost in terms of
production.
Our know-how tells us that all prices are predictable from the beginning. Whatever the complexity of the projects is, we don't have to think about the price, it is all clear and predictable – that's our
discovery for investors.
If we are able to create at the highest level, at a cost that many, rather than an exceptional minority, can afford, then we dramatically increase the margin of profit.
If we add up all of the above and summarise the long discourse on new opportunities, the idea of creating investment projects of a special level lies on the surface. By creating distinctive architecture, grand interiors, unconventional landscapes, having our own special view on design and customer service, using the names of world-famous brands and acting in coalition with them, we create a world-class product capable of taking its own special place in the international franchising or licensing industry.
Why is there no such thing? No one creates and implements such projects! It all comes down to the same stereotypical thinking. Stereotypical architecture, stereotypical interiors. Many developers try to use brands to strengthen their sales positions. Look at the villas of Fendi, Lamborghini, Missoni. What is the novelty or uniqueness? Is it the use of furniture or fabrics from these brands? With this approach, could we say about these projects occupying a niche in the global franchising? Are they of interest to anyone but a local developer who implements this project as a one-time business? Hardly!
But there is another alternative solution. The property is established as the first prototype, with the subsequent purpose of selling it on the international market on the franchise principle or through licences giving the right to realise such a limited edition project. And the names here should be completely different.
If the question comes up as regards the markets we are talking about, the first priority is China, followed by India, the Emirates, Saudi Arabia and the United States.
Limited Edition in real estate is the new bitcoin!