European Real Estate Franchise Engel & Völkers Makes Inroads in Florida

As part of our research for the upcoming 2010 Swanepoel TRENDS Report we have been expanding our research to include the changes, growth and new players in the real estate industry from a global perspective.  The international market continues to be a strong draw for our national franchises as they steadily add to their growing number of offices outside the country. 

At the same time, foreign companies listed in the 2009 Report, Trend #6 – “The Foreign Factor,” have also continued their growth despite the slow housing market worldwide. Harcourt is one of the companies listed recently signed an exclusive deal with Global Franchise Consultants to bring the Harcourt’s name to Brazil (thereby jumping another ocean and getting closer to the US). Meanwhile north of the border Brookfields is looking for a new CEO to head up the to-be-rebranded GMAC Real Estate.

Already very active in the US is German-based international real estate company, Engel & Völkers. Expansion in both the New England area as well as California has continued although it is the Florida master franchisor that really seems to be expanding the fastest. So we decided to talk with Oliver Tonn, Co-Owner of Engel & Völkers in Florida (www.engelvoelkers.com/florida) and get his views as a master franchisee.  Later this month we will be talking with a couple of their Florida franchisees for their perception.   

RealSure – Give us your thoughts on the current status of the world real estate market?

Tonn – In most international markets we have seen a dramatic decrease in prices and therefore a decrease in transactions, especially in Dubai, Spain and the USA.  However, there are still some markets that are very stable in Europe such as Germany and Switzerland where prices didn’t increase that much over the last few years. We also see a slightly increasing demand worldwide due to inflation fear, but clients are still very unsecure about where to invest their money.

RealSure – So which countries are still buying US real estate?

Tonn – As there has been a lot of negative press about the American real estate bubble and many foreigners are still not completely comfortable with investing in the US. During the past six months we have seen a slight 5-10% increase in international buyers in Florida with the majority coming from Germany and the United Kingdom.

RealSure - What are the Engel & Völkers expansion plans globally and the US?

Tonn – Internationally Engel & Völkers is planning on adding 1,000 new shops within the next three years and 2,000 within the next five years.  At the moment Engel & Völkers is opening a shop every 100 hours somewhere in the world. In the US some 600 shops are planned with some 250 earmarked for California alone.

RealSure – What has E&V achieved in Florida and what are the future plans in Florida?

Tonn – During the first two years, Engel & Völkers sold 27 franchises in Florida. Fifteen offices/shops are already open with 12 in the process of site selection or build out. We are in negotiations with another 7 at the moment and feel confident to reach our goal of 150 Engel & Völkers shops within five years. 

RealSure – That’s impressive. Why is that happening despite the housing recessions?

Tonn – Engel & Völkers is a strong global brand with a very strong brand in the high-class properties.  Everything in the company – the brand, the system, and the tools – is tailored towards serving the luxury homes market more effectively than any other company. That includes our boutique-style property shop system, high-class marketing tools and innovative software.  Many of the worlds wealthiest consider E&V as the leading brand for the luxury real estate market on a global level. 

This interview was conducted by Thomas Mitchell, Managing Partner of RealSure, Inc (www.realsure.com), a leading business management consulting company, trend trackers and publishers of the annual Swanepoel TRENDS Report (www.retrends.com).