In an interview just published in the Swiss real estate and living magazine “NZZ Residence”, Christian Völkers, CEO/ Founder of Engel & Völkers AG, talks about the importance of the company in Switzerland, future plans for growth, and his passion for polo.
You are managing a global network of offices brokering real estate under the Engel & Völkers brand. Which subsidiaries do you derive the most pleasure from?
“I am proud that our company is now represented in over 700 locations worldwide.
And I am especially pleased by the strong growth in our core markets at the moment, which include Germany, Austria and Switzerland, as well as North America, Belgium, Spain and Italy. The shops and offices in my home city of Hamburg and on Majorca, which I have called my second home for many years now, are very close to my heart. Majorca in particular has played a special role in our company’s history, as it was here in 1990 that our first office outside Germany opened its doors.”
One of the company’s recipes for success is the standardised etiquette that your employees are instructed to follow wherever they’re based. What rules of conduct should real estate agents always pay attention to?
“Let me put it a different way. The brand makes up a significant part of Engel & Völkers. Clients should have the same brand and service experience wherever they are in the world, regardless of which real estate agent they are dealing with. This can only be achieved if service quality and processes are clearly predefined. In the so-called “Engel & Völkers Fibel ” (a handbook), which I wrote a long time ago now, every aspect of our business – from property valuations to closing deals, through to the after-sales service, is outlined in detail. For example, it states that a viewing appointment should always end in the most beautiful room in the property, to make sure a client always leaves with the best possible feeling. Our academy trains each of our employees in these workflows and specific rules of conduct.
In your experience, what tricks are there that help to sell a house more effectively?
“It is important to proceed in line with the personal wishes of both the homeowner and the prospective buyer when advising and supporting them. We put various different marketing tools at our employees’ disposal, designed to give them the best possible support when it comes to managing the sales process effectively. These tools range from the classic print ad through to digital presentations. Selecting the best marketing tools to use in the sale of a home depends on the individual property being sold, on the expectations of the owner and on the target buyer group. A high-end property profile with professional photos and a detailed property description forms the foundation of each and every successful sale.”
Low interest rates are one of the drivers of the recent property boom being witnessed in many countries including Germany and Switzerland. How does the current situation differ from the situation in 2007 before the bubble burst?
“Acquiring real estate remains an extremely worthwhile form of investment, due to the current low levels of interest and the lack of attractive investment alternatives. All in all, the market is proving highly stable, benefiting from the favourable economic and political climate. The demand for property is enormously high and in the mid-term this demand won’t be able to be met through increasing levels of construction. This is compounded by the fact that the banks today now have stricter regulations governing their mortgage lending compared to just a few years ago. Cities like Zurich and Geneva, and winter sport resorts like Gstaad and St. Moritz, are as desirable as ever. And the prices brackets are a reflection of this. In our recently published ranking of the most exclusive residential addresses, Geneva emerged as the most expensive city in Switzerland, with prices reaching as much as 70,000 Swiss francs per square metre.”
Wealthy buyers from all over the world are an important target group. What do you offer this clientele that your competitors don’t?
“It has always been our aim to offer a more comprehensive service than our competitors. Thanks to our global network we are in a position to broker real estate located around the world to our search clients. In 2007 we founded a new business segment, known as the Engel & Völkers Private Office, specifically for extremely affluent prospective clients. It offers a discrete and individual consultancy service to those looking to buy or sell at the very top end of the market. If a client wishes to acquiring an historic country estate on Majorca and is planning to fly there by charter plane, we are able to support them in both of these undertakings.”
The most expensive house ever brokered by E&V is said to have been in Switzerland, where a buyer paid 60 million Swiss francs. How important is business in this country for you?
“The property you’re referring to is a chalet in Gstaad. Generally speaking, prices in Switzerland are very high. It is one of our most important markets. For almost two decades now, we have managed to grow our revenues continuously year on year. In 2016, we achieved a new record result again in the residential division, with a turnover of almost 33 million Swiss francs. Last year alone, we sold over 900 properties in this segment. It is financially well-off buyers from European countries outside Switzerland who are responsible for the steady level of demand for first-class properties at the moment. For properties in prime locations, buyers are perfectly willing to accept a price that is far higher than the usual market average.”
What further potential for develop do you see in Switzerland?
“We find ourselves in a very good position in Switzerland. There are just a few licence regions still vacant. Locations that are still available are often acquired by existing licence partners. We are expecting the property market in Switzerland to continue to develop on an upward trend, even though prices tend to differ depending on region, segment, supply and demand.”
The brokerage of real estate would also work in a similar form for sports cars, yachts and artwork. What plans are there for new business segments, for instance with regard to managing them?
“We’ve been brokering yachts too for several years now, along with premium aircraft since 2015. Additionally, we operate the “Castles & Manor Houses” and “Agriculture & Forestry” business segments. In Spain, E&V recently founded “Fincas Exclusivas”, which is specialised in fincas, wine-growing estates, and rural estates in the region around Madrid. One project that is very important to me personally is the construction of our new company headquarters in Hamburg’s Hafencity. It is envisaged as a real brand building, where the Engel & Völkers brand will come to life. I am particularly pleased that we were able to win over the world-famous US architect Richard Meier to design the building. We are due to move in to our new premises at the beginning of 2018. Brokering artwork is something that we could well consider entering into in the future.”
Judging by its size, your company would be a candidate for the stock market. Is that an option?
“I would not rule out an IPO in the long term. At the moment though our focus lies on increasing our market share in existing destinations and expanding further in our core markets. This year we’re planning to open around 50 new locations worldwide. This growth also increases the need for qualified professionals. This year we intend to recruit around 1,200 new real estate agents.
You have withdrawn slightly from day-to-day operations and spend much of your time on your estate on Majorca. When you’re not thinking about real estate for a change, what is it you enjoy most?
“My greatest passion besides real estate is polo. Our property on Majorca has its own polo field, which provides a fantastic setting for the sport. I am fascinated by the dynamic interplay of speed and precision, and the team work between man and animal. I like to share my hobby with friends and business partners. For the last few years I have been inviting them each summer to a Polo Cup on my estate. I also achieved a personal ambition of mine with the founding of our polo school. By nurturing young up-and-coming talent we want to encourage a passion for the sport, particularly among children and young people. On Majorca, I spend a lot of time with my family and looking after my estate. For example, I help with the grape harvest, producing our olive oil and taking care of the animals. I draw a great deal of energy from all this and really use the time I spend on the island to recharge my batteries.”
Interview: NZZ Residence editor David Strohm