Interview with cometis board member Henryk Deter on financial communication and investor relations in the real estate sector
Mr. Deter, which role do financial communications and investor relations play in the real estate sector?
A very important one. More than 170 real estate shares are currently traded on the Frankfurt Stock Exchange, 78 of which are domestic shares, i. e. German companies. 27 shares of which are listed in the regulated market, i. e. Prime Standard and General Standard. By way of comparison, these are more than the shares of banks, car manufacturers and pharmaceutical companies combined. Instone Real Estate is yet another new real estate company this year. What I mean by this is that there are many options for investors to invest in the market. If you want to stand out from the peer group on this playing field, you need to sharpen your own profile, highlight the company’s special features and communicate them visibly and regularly to the outside world.
You’re talking about the stock market. Does that also apply to unlisted players in the real estate industry?
Even more! The real estate sector has been booming for some time now, competition is fierce, attractive products and investment opportunities are becoming increasingly rare. In addition, the potential end of the cycle is gradually emerging on the horizon. The ECB signals very gently but audibly that the flood of money is coming to an end. In this environment, sophisticated and differentiated communication is very important. Most real estate transactions are designed to be long-term. Communication must also be forward-looking and seen not as a flash in the pan, but as a marathon run, in order to establish itself permanently in the perception of the target groups.
How should real estate companies communicate?
This naturally depends on it, because the real estate market produces many business models with very different target groups and different risk/reward profiles. Therefore, it is always the first step to position yourself clearly: Inventory owners, project developers, investment managers, brokers, service providers or a hybrid form? Commercial or residential? Which regions are dealt with nationally and internationally, which micro-locations? Nowadays, real estate is no longer just about location, location, location. Who has access to objects, the technical and legal know-how, knowledge of permits, development, construction and renovation, property management, access to financing etc. – the more the investor can be relieved of these areas, the better. Appropriate communication should focus on this capability and the successful track record. In addition, there is communication: courage to take one’s own point of view, new perspectives on old topics as well as consistency and staying power.
Interview published in:
March 2018, Issue 11
100 Real Estate Ratios
In the well-proven DIN A6 format, all important sections of the plant’s life cycle are covered chapter by chapter. On one page each, the topics of project development, letting, management, financing and valuation – for example for a later sale – are explained. These include key figures such as the vacancy rate, loan-to-value, gross multiplier and the net income of a property. In addition, the book written by real estate expert Tobias Schultheiß contains the most important key figures for listed companies: Net Asset Value (NAV), Funds from Operations (FFO), EBIT or debt ratio must not be missing!