"BUYERS IN a resort market are typically second or multiple home buyers. We see buyers looking at Rhode Island not only as a vacation destination, but as a home base down the line," said Lila Delman Presidnet Melanie Delman.
In the last two years, Lila Delman Real Estate has opened new offices on Block Island and in the East Side of Providence. This fall, the firm sent a delegation to Luxury Portfolio International’s International Symposium in Madrid, Spain, where luxury real estate brokerages from around the world gathered to discuss developments in the market for high-end properties. Now back from Europe, Lila Delman President Melanie Delman took a few moments to discuss her efforts to market Rhode Island’s high-end real estate globally.
PBN: What was the most important thing you learned while in Madrid that you’ll take back to Rhode Island?
DELMAN: Real estate investment is up significantly in well chosen, traditional, targeted locations like New York, Washington D.C. and Los Angeles, as the world’s wealthiest look to real estate as a safe haven in turbulent economic and political times. London, Paris and New York are now beginning to look like value for the global super rich, as they offer relative price stability, coupled with political stability. We believe in time Rhode Island will benefit as well.
PBN: Are Realtors in Hong Kong or London going through some of the same things we are here in New England, or did you find the experiences of participants from different areas varied widely based on where they were from?
DELMAN: London is experiencing a huge flow of money from wealthy international buyers into prime London property, viewed by many as a safe haven for wealth. Scarcity of property is driving up prices especially in top cities such as London, Paris and Hong Kong. the Chinese, Middle Eastern, Russian and South Asian buyers are investing in London against the backdrop of global uncertainty and recession. Billionaires’ homes in London now sell for an average of more than 3,000 pounds per square foot and London has the fourth most expensive house prices in the world.
Sterling's weakness has made London house prices look like bargains to international buyers. It has also helped Paris overtake London as the third most expensive city in the world, with house prices at an average price of 3,270 pounds per square foot. Scarcity is also driving the market forward in Paris. Building regulations mean that new luxury properties are unlikely to be built in the French capital, resulting in intense competition when choice properties come on the market.
China’s booming economy has helped Hong Kong become the world’s most expensive city with billionaire homes in Hong Kong now typically 6,700 pounds per square foot. Cash continues to be the most popular means of payment.
PBN: What are “resort markets” and why is marketing them important?
DELMAN: A resort market is one where lifestyle, coupled with the prospect of long term investment is the primary focus. Buyers in a resort market are typically second or multiple home buyers. We see buyers looking at Rhode Island not only as a vacation destination, but as a home base down the line. Buyers with college age children are attracted to the higher education institutions that Rhode Island has to offer like Brown University and the Rhode Island School of Design.
Marketing is important to introduce Rhode Island as a viable option and an attractive investment, especially now with reduced pricing and historically low interest rates. We highlight it’s proximity to Boston and New York as well as the amenities that Rhode Island has to offer, like its beautiful shoreline, beaches, world class sailing, tennis and golf, as well as its history, art and cultural events.
PBN: I think most people naturally think of real estate very locally or regionally. How has real estate gone “global?”
DELMAN: Real estate investment has made significant strides in the past decade. The world-wide increase in real estate investment can be attributed to the growth and greater variety of investment vehicles and greater diversification potential. The addition of international markets to a real estate portfolio can potentially enhance returns. Buyers are broadening their search globally and looking at areas which offer the best amenities and the best value. Rhode Island is a good relative value and an attractive alternative to other regional coastal communities.
PBN: With what you learned in Madrid in mind, what new initiatives is Lila Delman focused on right now?
DELMAN: We continue our PR efforts to market Rhode Island properties globally as it is more important than ever for real estate investors to consider the Unites States. With on-going global, political and stock market volatility, the US offers good opportunities for capital appreciation especially in New York and Boston. We anticipate a spillover effect in Rhode Island due to its proximity to these larger cities.
We are building our affiliations overseas through Christie’s International Real Estate, Luxury Portfolio International and Mayfair International Realty, through which we can highlight our extraordinary state and the attractive buying opportunities it presents. In this climate, it is more important than ever that buyers and sellers seek out a real estate company with strong international affiliations promoting Rhode Island real estate.