04.10.2018 by Prof. Dr. Stephan Kippes

"It is important not to conceal a possible weak point"

Professor Dr. rer. pol. Stephan Kippes teaches at the Faculty of Business and Law of the Nürtingen-Geislingen University of Applied Sciences (HfWU). He is a leading real estate marketing expert. Among other things, Professor Kippes chairs the jury for the real estate marketing award and heads the IVD Institute.

 

Professor Kippes, at what point should marketing experts deal with the branding and positioning of real estate projects?

As early as possible. Branding and marketing should ideally be taken into account during concept development as well as location and market analysis. At this first stage you should carefully and openly analyze whether a project development makes sense or not. Simply waving the project through is irresponsible. Unfortunately, this often looks quite different in practice. And after an unsystematic, incomplete or even biased analysis, marketing can only assume the function of pathology in the end.

You can quickly come up with a promising marketing strategy for a fancily restored factory building with a decorative facade from the Wilhelminian era. But what about an unpopular 1970s warehouse? Can the image of problem properties even be tweaked?

I recommend taking a systematic approach in this case. What can be done with the existing building structure at the location? Development may be easier after demolishing the building rather than working with the existing problem property. Or can the building be converted? If the problem cannot be resolved, there may be a way to upgrade the property or lot for a different use. Although this does not solve the problem, you put significant additional benefit in the balance. It is important not to conceal a possible weak point or simply use marketing to cover up a fault. It does not make a confident impression.

No masking: When it comes to marketing, you should address problems and disadvantages of properties openly.
No masking: When it comes to marketing, you should address problems and disadvantages of properties openly.

It is better to ask oneself the following question: For which target groups does the problem even exist? After all, disadvantages and challenges are perceived quite subjectively – perhaps even as an advantage. For example, a manufacturing company that generates a lot of background noise will perceive the noisy highway in the immediate vicinity as less problematic than a laboratory that conducts highly concentrated research. And finally, it depends on whether a project is developed for buyers or for tenants. Tenants are sometimes less sensitive to individual disadvantages; they may after all only inhabit the property for a limited period of time. Marketing must be even more compelling to convince buyers.

It seems that no real estate project of any type of use and size can do without a catchy name today. You can come across some rather strange coinages in this respect. Would you rather recommend an artificial name or a name with a specific reference?

It tends to be more complicated and difficult to come up with a completely new artificial name. If possible, you should build on the existing names or pick up on specific characteristics when it comes to real estate branding. A suitable reference does not immediately present itself for every project. And not every immediately obvious name can even be used. You can usually find suitable starting points through systematic and persistent research, however.

What kind of starting points can these be?

The property's history or the location is a good place to start. There are often remarkable historic uses, particularly in the case of commercial property projects. Classics are market halls, railway stations, factories or harbor piers. Or very well-known former companies as previous owners. It is important that such historic names and uses are familiar to and seen positively by the people in the region. You can also pick up on features from the landscape, although this tends to be the exception for commercial real estate. If for whatever reason history or landscape are inappropriate, you can refer to unusual architectural or technical aspects of the property or to a specific tenant mix: In Berlin, for example, there is the "House of Associations". The branding should ideally also fit the company's mission statement and corporate identity.

Pay-per-use models such as co-working are becoming increasingly prevalent in the office sector. Will such concepts also gain a stronger foothold in logistics or mixed-use commercial properties – and change the requirements for marketing?

Although I do not expect such a trend in logistics properties, it is always important to look at each individual case separately.

Prof. Dr. Stephan Kippes, Nürtingen-Geislingen University of Applied Sciences