The smart sell

Homes are no longer selling like hot cakes, so surely more attention should be given to marketing strategies? Such is the view of residential market consultants. However, up until now, only a very few developers have been using non-standard techniques in the competition for buyers

“Nothing lasts for ever” sang Echo and the Bunnymen some years back. Were they thinking of the Polish housing boom? Maybe. The astonishing state of the market in Poland’s largest city last year, came first as a shock to developers, before eventually making them lazy. The hunger for homes is still huge, said to exceed one million; but on the other hand, it has encouraged developers, including first-time operators, to begin new investments – which means the supply of homes is gradually, albeit slowly, rising. The number of licences issued to build homes in Warsaw rose by 50 pct in the first months of the year, with the number of starts increasing by more than 60 pct, according to the Central Statistical Office (GUS). The average price for 1 sqm of a new home has soared to around PLN 8,000, holding steady at that level for several months, resulting in customers’ appetites falling off somewhat.

You can still

pick and choose

People interested in buying their own flats no longer have to stand in queues at 6.00 am on the day when they are put on sale – which was still the case until very recently. If you happen to be looking for a home in a number of Warsaw districts you can now pick and choose.

According to Maria Hahn, market and marketing research coordinator at CB Richard Ellis’s housing property department: “Developers in the Wola, Wilanów and Białołęka districts are coming up with a relatively rich variety of offers. The prices of flats in many projects are similar, which means that a person looking for a home in a specific location is beginning to pay attention to such factors as a developer’s professional standing, the quality of the finishing of the building and the residential project itself. The set up of the sales office where the potential customer is received is also becoming important, as are the promotion materials handed to the customer. Such seemingly small things as a cup of coffee or a glass of cool water offered during a hot spell can also be decisive for the success of negotiations.”

Support for Wilanów

Miasteczko Wilanów – a huge project under development by Ryszard Krauze, who bought almost 170-ha of land from the Warsaw Agricultural University, is now beginning to take shape. In this project, Polnord (previously Prokom Investments), together with several partners (Robyg, Fadesa and TFI Skarbiec), has several housing investments underway. Independent developers are also building housing estates, while others (B.S.R., Wilanów One) are relying on the synergy effect and so are investing in Miasteczko’s vicinity. The competition is motivating such companies to greater efforts in attracting customers.

Agnieszka Jaworska, marketing & sales director of B.S.R. Polska Wilanów, the developer of the Wilanów One estate, reveals that: “We hit the first advertising blow last autumn when we wanted to surprise and intrigue the market – a move which was a clear success. A clip promoting our name and the slogan “the best in Warsaw” was published in the daily press, weeklies and the TVN24 television channel. We finally disclosed our secret, the housing project, after two weeks had passed. We also wanted to break through developers’ prejudice for such forms of advertising as mega-boards. Ours have been put up in the city centre not far the Marriott Hotel on ul. Marszałkowska. We have also employed buses and trams in the campaign – covering them with our logo.”

The company is building a housing estate of 2,500 apartments on an almost 20-ha site in Wilanów. To support the sales of its homes, the developer is using radio advertisements which entice people to visit the sales showroom with the chance of winning a bicycle. The sales showroom is a showcase apartment equipped and fitted in line with the latest interior design trends, such as those on offer in the estate.

Agnieszka Jaworska continues: “I am sometimes asked – even by my bosses – why go to all that trouble? After all, the demand for homes is huge. The reply is simple – our project is enormous and it will only be completed in 2012, which is why investing in the estate’s logo and fostering good relations with customers is well worthwhile. The boom on the housing market is continuing, but is already slowing. And it is nigh on impossible to predict what the market situation will be like in three or four years.”

Agnieszka Jaworska reveals that she is preparing her next advertising offensive for the autumn, this time with cinema being used as a marketing instrument.

The strength

of the internet

Agnieszka Krzywicka, marketing and sales director of the Robyg company which is developing housing estates in Wilanów and elsewhere (Nowa Rezydencja, Królowa Marysieńka), remarks that: “You can get fed up and tired of too much advertising, which is why we are very careful when promoting our products. In our view, it is better to care of the customer in the sales office and give him or her the time to take such an unusually important decision, and also to put the final finishing touches to a product so that it satisfies the expectations of the estate’s future resident. I rate the internet highly among the various forms of marketing and can see rising interest amongst various groups of internet users.”

The housing market is becoming more transparent thanks to the internet. Customers look for information not only on developers’ websites (where they can see a visualization of the building, take a virtual walk through the investment, and have a look at the plan of the flat), but can also exchange information in internet discussions.

Mikołaj Martynuska, director of the housing real estate department at CB Richard Ellis, is of the opinion that: “An especially effective form of advertising several years ago was the so-called grapevine. The internet has now taken over this function in its unrestricted and – above all – rapid exchange of information. An interesting development and something which distinguishes developers in the whole advertising commotion are multimedia stands, for instance in office buildings and shopping centres. Such a market pioneering device has been installed in Rondo 1.”

Daily newspapers are the standard

Experts are currently of the opinion that residential fairs, which had – up until recently – been increasing their presence on the market, are now losing their importance.

Alicja Kościesza, marketing deputy director for Orco Poland describes the situation: “We are present at housing fairs twice every year – in the Torwar hall in Warsaw in the spring and in the Palace of Culture and Science in the autumn – and am sure that is enough. The advertising budget is more efficiently used when channelled into other forms, e.g. advertisements placed on internet websites, traditional advertisements in the real estate supplements of the largest dailies and banners at the places where investments are, or soon will be, under way. It can also be invested in creating relations with the media. This is our strategy used for our popular segments.”

The company used a new promotion technique in its campaign for the Daniel Libeskind ‘sail’, that is, the Złota 44 apartment block which is to stand in the very heart of Warsaw. Orco Poland were make an impression developers by staging a gala event officially opening the sales of apartments. It was held in the Wielki Theatre and 700 people attended.

Alicja Kościesza of Orco Poland looks back at the project’s early stages: “From the moment the concept was born to develop a tower to replace the City Centre building according to Daniel Libeskind’s magnificent design, we knew there could be no talk of a standard marketing strategy, Hence the idea for an exceptional gala event in the Wielki Theatre, at which the first spectacle of its kind – a modern ballet – would be performed. To this event the famous architect was also invited; the reaction of the locals and the media was tremendous.”

This November event was followed by another one, this time a more intimate meeting with potential customers who had expressed their interest in the investment during earlier contacts with the developer. Orco presented the plans to about 100 people at the evening cocktail party that they laid on. The benefits brought by this campaign are clearly visible with 170 apartments out of the total 251 in the building already sold. The tower building is to come into use in the first half of 2010. Having said that, however, the high quality of the building and the magic of the architect’s name may fade from people’s minds somewhat and the developer will have to make greater efforts to secure buyers. The Lilium company intends to develop a tower more than 200 m tall next to the Marriott hotel and has invited to the design competition such renowned names as Zaha Hadid, Sir Norman Foster, Richard Meier and Anthony Bechu. The Wrocław-based LC Corp will be building Sky Tower in Gdańsk, where the Hossa Investment Group will also be developing the 202 m BigBoyBuilding.

A gold medal

According to Mikołaj Martynuska of CB Richard Ellis: “Standard promotion costs for a housing project amount to around 0.5 to 1 pct of its sales value. It comes as no surprise to learn that developers spent only tiny sums past year on marketing. Information on an internet website, an information board at a construction site and a short press information item sometimes prove sufficient. But in the future the situation will surely change.”

Orco refuses to reveal what the marketing costs amount to and B.S.R. Polska Wilanów is also tight-lipped when asked about such data.

Agnieszka Jaworska remarks that: “We have already spent a lot on the whole project and will still spend quite a sum – maybe up to PLN 20 mln. But I really believe that now people know who the ‘number one’ is – and not only in Warsaw.”

And as Echo and the Bunnymen sang: “Nothing lasts for ever”.

Ewa Andrzejewska