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Evergrande Grows as World’s Most Valuable and Strongest Real Estate Brand

  • Evergrande most valuable and strongest real estate brand, brand value breaks US$420 billion mark.
  • Chinese brands dominate taking 20 of 25 top spots
  • Emaar is most valuable outside China, brand value US$2.7 billion
  • CBRE fastest-growing, up 53% to US$2.1 billion

View the full Brand Finance Real Estate 25 2019 report here

Evergrande most valuable and strongest

Evergrande has remained the world’s most valuable real estate brand, with a brand value increase of 26% to US$20.4 billon, breaking the US$20 billion mark, according to the latest report by Brand Finance, the world’s leading independent brand valuation consultancy.

As China’s second-largest property developer, Evergrande has stayed ahead of the curve by continuing to modernise and embracing new technologies. The real estate giant’s recent venture with State Grid Corp. to develop home car-charging technology is expected to elevate the brand’s competitiveness in the market, setting Evergrande on a positive trajectory for the rest of the year.

Aside from calculating overall brand value, Brand Finance also determines the relative strength of brands through a balanced scorecard of metrics evaluating marketing investment, stakeholder equity, and business performance. Alongside revenue forecasts, brand strength is a crucial driver of brand value. According to these criteria, Evergrande is also the strongest real estate brand of 2019 with a Brand Strength Index (BSI) score of 77.3 out of 100 and a corresponding AA+ rating.

David Haigh, CEO of Brand Finance commented:

“Over the last year, Evergrande has been riding the surge of the Chinese real estate market, staying ahead of its competition through strategic EV-related acquisitions and ground-breaking projects such as developing electric-vehicle powertrains. Subsequently, the brand’s expansion into the EV industry should place it in a favourable position to weather potential dips in the Chinese property market”.  

Chinese brands dominate

Chinese brands dominate the Brand Finance Real Estate 25 2019 ranking this year, with an impressive 20 of 25 brands hailing from the country. China is also home to the five fastest-growing brands on the ranking, led by Agile Property (up 72% to US$2 billion) and Longfor Properties (up 72% to US$8.2 billion), followed by R&F (up 70% to US$3.1 billion), China Merchants Shekou (up 70% to US$2.2 billion), and China Resources Land (up 68% to US$6.5 billion).

However, China’s Dalian Wanda continues its dramatic downward trajectory as the fastest-falling brand in the ranking, dropping 34% from US$7.8 billion to US$5.2 billion. Dalian Wanda therefore remains troubled by its debt obligations following the brand’s failed shift towards alternative business projects.

Emaar and CBRE ones to watch

Outside of China, UAE-owned Emaar Properties (brand value US$2.7 billion) is the most valuable brand on the Brand Finance Real Estate 25 2019 ranking. Emaar Properties is publicly-listed in the UAE and continues to increase in brand value due to its large-scale projects, such as developing the Dubai Mall, the world’s largest shopping centre, and the Burj Khalifa, the tallest building in the world. Currently accounting for one third of real estate deals in Dubai, Emaar Properties continues to build its portfolio by signing on to high-profile projects such as developing part of Beijing’s new Daxing International Airport and the first 3D printed model home.

US-owned CBRE is the fastest-growing brand outside of China, up by a staggering 53% to US$2.1 billion. As the largest commercial real estate services company in the world, CBRE has been expanding into new markets and acquiring deals to develop new infrastructure over the last year. The brand has also been bolstered by its commitment to social responsibility efforts, including charity partnerships with Shelter and Action for Children.

ENDS

Note to Editors
Every year, Brand Finance values 5,000 of the world’s biggest brands. The 25 most valuable real estate brands are included in the Brand Finance Real Estate 25 2019 report.

Brand value is understood as the net economic benefit that a brand owner would achieve by licensing the brand in the open market. Brand strength is the efficacy of a brand’s performance on intangible measures relative to its competitors.

Additional insights, charts, and more information about the methodology, as well as definitions of key terms are available in the Brand Finance Real Estate 25 2019 report.

Data compiled for the Brand Finance rankings and reports are provided for the benefit of the media and are not to be used for any commercial or technical purpose without written permission from Brand Finance.

Media Contacts
Sehr Sarwar
Communications Director, Brand Finance
T: +44 (0)2073 899 400
M: +44 (0)7966 963 669 
s.sarwar@brandfinance.com

 

Florina Cormack-Loyd
Communications Manager, Brand Finance
T: +44 (0)2073 899 400
M: +44 (0)7939 118 932
f.cormackloyd@brandfinance.com 


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About Brand Finance           
Brand Finance is the world’s leading independent brand valuation consultancy, with offices in over 20 countries. Brand Finance bridges the gap between marketing and finance by quantifying the financial value of brands.

Brand Finance helped craft the internationally recognised standard on Brand Valuation – ISO 10668, and the recently approved standard on Brand Evaluation – ISO 20671.

Brand Finance is a chartered accountancy firm regulated by the Institute of Chartered Accountants in England and Wales (ICAEW), and also the first brand valuation consultancy to join the International Valuation Standards Council (IVSC).

Brand Finance’s brand value rankings have been certified by the Marketing Accountability Standards Board (MASB) through the Marketing Metric Audit Protocol (MMAP), the formal process for validating the relationship between marketing measurement and financial performance.

Methodology
Definition of Brand
Brand Finance helped to craft the internationally recognised standard on Brand Valuation – ISO 10668. It defines a brand as a marketing-related intangible asset including, but not limited to, names, terms, signs, symbols, logos, and designs, intended to identify goods, services or entities, creating distinctive images and associations in the minds of stakeholders, thereby generating economic benefits.

Brand Strength
Brand strength is the efficacy of a brand’s performance on intangible measures, relative to its competitors. In order to determine the strength of a brand, we look at Marketing Investment, Stakeholder Equity, and the impact of those on Business Performance.

Each brand is assigned a Brand Strength Index (BSI) score out of 100, which feeds into the brand value calculation. Based on the score, each brand is assigned a corresponding rating up to AAA+ in a format similar to a credit rating.

Brand Valuation Approach
Brand Finance calculates the values of the brands in its league tables using the Royalty Relief approach – a brand valuation method compliant with the industry standards set in ISO 10668. It involves estimating the likely future revenues that are attributable to a brand by calculating a royalty rate that would be charged for its use, to arrive at a ‘brand value’ understood as a net economic benefit that a brand owner would achieve by licensing the brand in the open market.

The steps in this process are as follows:

  1. Calculate brand strength using a balanced scorecard of metrics assessing Marketing Investment, Stakeholder Equity and Business Performance. Brand strength is expressed as a Brand Strength Index (BSI) score on a scale of 0 to 100.
  2. Determine royalty range for each industry, reflecting the importance of brand to purchasing decisions. In luxury, the maximum percentage is high, in extractive industry, where goods are often commoditised, it is lower. This is done by reviewing comparable licensing agreements sourced from Brand Finance’s extensive database.
  3. Calculate royalty rate. The BSI score is applied to the royalty range to arrive at a royalty rate. For example, if the royalty range in a sector is 0-5% and a brand has a BSI score of 80 out of 100, then an appropriate royalty rate for the use of this brand in the given sector will be 4%.
  4. Determine brand-specific revenues by estimating a proportion of parent company revenues attributable to a brand.
  5. Determine forecast revenues using a function of historic revenues, equity analyst forecasts, and economic growth rates.
  6. Apply the royalty rate to the forecast revenues to derive brand revenues.
  7. Brand revenues are discounted post-tax to a net present value which equals the brand value.

 

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