Because it is the only thing that can’t be copied!
It was November 2013, and we were already talking about branding:
“TEN GOOD REASONS TO INVEST IN ZAGALETA®” by Ignacio Pérez Díaz
It’s a good time to travel back in time to see how we’ve evolved…Let´s go back to 2013.
At current levels of pricing, investing in Zagaleta is a solid and smart investment, according to Ignacio Perez, the Group’s Head of Business Development.
ZAGALETA is one of the most solid investments that can be made in the luxury property sector and is a safe bet, both on substance and on price development. Together with the most luxurious real estate brands it is becoming an alternative diversiﬁcation call for the ultra high net worth wanting to make a solid investment with potential capital gains. Why? There is a truly limited offer, the ownership title is safe and it can be easily transferred. Why? Here are 10 even more solid reasons.
1- THE BRAND, DISTINCTION FACTOR Nº1
Location is not equal to brand! There are many exclusive locations in the world but they are not registered trademarks. Where lies the difference, then? It is the company, who owns the brand and its team working for it, who make sure it is protected at all times and will make it grow bigger over the years. In the eyes of potential consumers and even more to the existing company customers, this is a distinctive factor of the highest relevance. The recent appointment by the board of the Spanish company La Zagaleta SLU (owner and developer of the resort) of Mr. Oswald Grübel as the new Chairman made the front cover of Spain’s leading ﬁnancial paper Expansion. The day following that publication, hundreds of other papers reported the news causing a huge impact on the brand. Zagaleta, one of the most exclusive luxury real estate brands in the world had just named the former CEO of the two major ﬁnancial institutions in Switzerland, namely Credit Suisse, and more recently, UBS.
The appointment also contributed positively in the eyes of the residents of the estate who welcomed the news, as it would contribute to a strong positioning of the brand on an international level, leading to a positive evolution of the prices due to a stronger demand.
2- LOCATION, LOCATION AND LOCATION
The best-known saying in the industry! You should only invest in a prime site or a prime location. That is everything in real estate, whether you are in a city or anywhere in the world. With the highest density of top luxury homes in mainland Spain there is no doubt that, based on this criteria, over 200 people and families owning properties representing a value in excess of some 2 Billion Euros have made this reﬂexion in the past, independently of the remaining reasons leading to their decision to purchase. Needless to say that, although Zagaleta is not Mayfair, it is interesting to know and observe that many homeowners at Zagaleta have properties or second homes in the prime residential areas of London, Europe’s largest and strongest real estate market.
3- INCREDIBLE BEAUTY – SECURE ENVIRONMENT
Yes, this needs to be said over and over again because it led to the success of the undertaking! In fact, those readers who might have had the chance to visit Zagaleta will certainly remember it, or better said, “will not be able to forget it so easily”. This was the statement by a leading Swiss golf magazine journalist in the year 1996.
Twenty-four years of ongoing search for improvement in all products and services combined with an incredible beauty and unprecedented setup has managed to convince many of the European business elite to own second homes in the estate.
4- CONCEPT EXCLUSIVITY, WORLD CLASS SPORTS AND NETWORK INFRASTRUCTURE
The perfect combination of a gated and secure estate with world class infrastructure and sporting facilities match the perfect setup for a highly demanding clientele wanting a pack of services that go far beyond just the purchase of a property.
The exclusivity in the homes comes from the initial settings and planning of the developer, who bet on a very low home density gated resort with golﬁng and other sports facilities; a concept that brought recognition and prosperity by the markets. But exclusivity is also about experiences, lifestyle, sports, catering and restaurant services, entertainment, wildlife and size. Because size and large spaces are synonyms of luxury, this 10 square-km surface of the world, with its super low density of homes and plenty of trees and green areas, is today considered one of the most exclusive branded luxury resorts in the world.
But how do the rules of property, its prices, the offer and the demand actually work? An insight analysis shows that investing in any piece of land or property in this resort will be winning decision, especially as market- makers and consumers become increasingly aware of the scope of the project: The people who live there, the homes to be found there, the visitors, and last but not least, the people who work in there, and make it all happen. The notoriety of the brand combined with the exclusive property asset class holding (2nd or 3rd home for most cases) and the old saying “money attracts money,” is a guarantee for constant demand.
Zagaleta, which has often been described as a trendsetter and a “ﬁrst-mover,” was already capable of delivering a “unique selling proposition” some 20 years ago, long before any competitor in Spain. This recipe not only has brought immense wealth to the region, but has also created thousands of sustainable jobs in the area.
MANAGEMENT & UNIT TEAMS
When you buy or invest into a company, a brand or a business, you are betting for the people and teams who run it. Here are three additional reasons for investing in Zagaleta.
5- ZAGALETA COUNTRY CLUB: GOLF EXCLUSIVITY TO THE MAX
Golf is an exclusive sport by tradition. As most golf courses in Spain are highly crowded and busy with green fee players, the positioning of the Zagaleta Country Club and its 36 holes of world class golﬁng is, without doubt the most exclusive facility in the entire country, if not in Europe. The amazing views of the homes, the mountains and the sea combined with a challenging course design makes any of the 36 holes a real delight to play for any golfer. Add a “no- stress sensation” on the golf course, and you have a guaranteed unique experience.
There is a newly elected and highly qualiﬁed board in the Club, whose ambassador is its Chairman, Bertil Hult, one of the most successful businessmen and visionaries in the world of education; certainly a very strong asset for the Club. Having created the EF Education First group from the ground up in 1965 to what it is today, the largest privately owned language and business school network in the world is a ﬁrst class reference for the estate. His willingness to put his name at the forefront of the Zagaleta Country Club in a non-remunerated role can only be interpreted positively by all market observers. His kind style and approach, as well as his determination, will certainly help position the golf and sports facilities at the highest levels.
6- FORO LA ZAGALETA®
In 2012 Zagaleta Group launched a new brand under the name Foro La Zagaleta – Brands & Trends. A yearly conference known for “bringing the best marketing brains to Marbella” combined the desire of a city to become the destination for quality, business tourism, with luxury characteristics. And the event found major success.With an exclusive, by-invitation-only audience of some 600 guests and the support of large multinational and luxury corporations, Zagaleta and Marbella managed to be the centre of attention of the Spanish press. The large branding footprint left by all the supporters of this event is to be found in various social media channels, fuelled by the support of leading speakers who kindly accepted the invitation.This initiative has made millions of viewers and followers aware of Marbella as a top luxury destination where incredible knowledge and talent can be found and heard; a clear winner for all parties involved, including of course, Zagaleta Limited, the UK holding company, owner of the group of companies that operate under the same brand.
7- OBSERVE EXTERNAL SIGNS: CAN YOU DETECT ANY TALENT?
The products you see today advertised are characteristics or “external signs” of the capability and the skills of the people who make them, the powerhouse they represent. Based on that same Apple Computer example back in the mid-80s, one should have invested in their company; moreover, as we had clear “external signs” that we were dealing with people with exceptional talent.
Now here is our – in comparison with the previous – small Zagaleta story and brand. What were our external signs when we ﬁrst started to offer our product. Who were the courageous people who invested in it, and ﬁnally, where do they stand today with their initial investment? Whatever the answer, the reality is that early investors have made a great investment. And without a doubt, they deserve successful returns, as they were smart enough to recognize the scope of the undertaking as a whole to know that this was something exceptional that would evolve naturally. Of course, other factors played in favour too, like timing and the state of the industry at the time, but ultimately, these early investors made the correct decisions.
But there are also “external signs,” such as product quality, general image and multiple collaborations with leading luxury groups and multinational companies that partner every day with the Zagaleta brand.These promotions lead to a greater visibility and distinctive factor in the marketplace and that will lead inevitably to stronger prices.
TIMING, FUTURE & LIKELYHOOD ARGUMENTS
“Timing” can often be the differentiating element in business.This is true to such an extent that products or initiatives that were launched in unfavorable times have not succeeded, but they have been able to be rescued (or revived) at a later stage obtaining huge commercial success.
8- LIFESTYLE AS AN INTEGRAL PART OF THE COMPANY CULTURE
As the markets and the economy begin to recover, demand and prices scale up gradually and progressively. In the real estate business, deals are closed eventually, but they do close.What does it mean? Nothing less than letting consumers and prospects discover you and your products whenever they are ready.The wave of buyers come in due course, for example, when they begin to see proﬁts in the stock market, sell other assets, make good earnings, have the time to focus, or even when parents think of travelling on school holidays with their children. Or, presently, when people feel it is time to buy because prices are attractive as they have fallen substantially. Would you not rather invest in strongly depressed markets such as Spain, rather than markets in other European countries, where real estate prices are at an all-time high?
In the EU and the US an important aspect in people’s behaviour is that they are not prepared to renounce their concept of lifestyle. It is true that they may not increase spending substantially, but they will certainly maintain their usual consumer habits and way of life. This is important, especially in the high-end real estate sector, as it is not under such strong selling pressure as in the rest of the market.
With second generations, many consumers reach for what is known as “the permanent search of improved lifestyle and quality of life”. Consumers, especially in emerging countries or the Middle East, are in search of the best quality and features, the fastest, the most advanced or innovative; and for that, they are prepared to pay.
In a business like ours, where a second home costs an average of 7,5 million Euros, the “air becomes thin,” in terms of potential clients. It becomes high luxury where a mix of factors play a key role in the purchase decision, starting with the brand. But it is also a business about people and networking. And questions of high importance arise, like, “Who else is in the neighbourhood?” or “Whom will I meet on the golf courses?”
To put this argument under perspective, let us think about the Ferrari brand.Just as there are many Ferrari cars spread throughout the planet, there are Ferrari fan clubs in different parts of the world. The fans ﬁnd the need to meet and share their stories and emotions around the cars and the brand. In our speciﬁc case, the Zagaleta brand is the common denominator, and its customers, whenever they meet, will be curious to know who else shares the passion, how they came across the product and what made them become part of it. What are the known stories related to Zagaleta and who shares them?
9- IN THE FUTURE ¨BUYERS WILL QUEUE UP TO BUY”.
Why? New, innovative products and designs will on the pipeline each year, creating expectation and demand. Whether the company manages to achieves this or not, it will be a clear OBJECTIVE.
The reasoning is quite simple: Why not?
If customers are pre-ordering limited car editions and are prepared to wait long periods of time to get a speciﬁc model delivered, the same could happen in a hyper-luxury resort like Zagaleta, where the offer is limited, both by space and number of units. Especially as most new customers want the latest architectural designs, materials and features, the only way to obtain such a product is either by acquiring an exiting object and making the necessary changes and reforms (sometimes there is no other way than to demolish the existing building) or buying a new product from the product maker, hence the developer.
Of course the market, to a great extent, is still looking for traditional custom architectural homes, but the bidding is generally lower than the latest available on
the market. The ability of the teams behind the product to “steer” the offer is key for such wishful desire (for any company, by the way) to have people prepared to queue to be served. This is an existing trend at Zagaleta that started some six years ago and that will gain momentum as the economy starts to recover.
Clearly all communication patterns of the company are pointing towards exclusivity and uniqueness of the products and future supply waiting times.
10- THE LIKELYHOOD: A GREAT FUTURE LIES AHEAD FOR THE PROPERTY PRODUCT
Far from being exhausted, and in comparison with other prime areas of the world, the price range is perceived as reasonably attractive.
When can one recommend with great tranquillity an investment? When the substance is there and the price is right. We are experiencing a moment just like that in history and it is worth it to pay premium prices to become part of the brand. But this premium is justiﬁed, as the future will allow you a much better and higher exit.
Amazing property – Heaven 11 – Zagaleta ARK Architects
SECRETIVE’, ‘exclusive’ and ‘elite’ are words that appear synonymous with La Zagaleta – said to be Europe’s most expensive residential estate and country club.
It is home to some of the world’s richest businessmen, oligarchs and celebrities, up in the hills above Marbella and with all-encompassing views along the Costa del Sol and out to Gibraltar and Africa.
Surrounded by rumours and jealousy – and easily one of the world’s slickest security operations – Zagaleta has the mysterious allure of a place that is both known, yet completely unknown.