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.
Brand Finance is the world’s leading brand valuation consultancy. Bridging the gap between marketing and finance for more than 25 years, Brand Finance evaluates the strength of brands and quantifies their financial value to help organizations of all kinds make strategic decisions.
Headquartered in London, Brand Finance has offices in over 20 countries, offering services on all continents. Every year, Brand Finance conducts more than 5,000 brand valuations, supported by original market research, and publishes over 100 reports which rank brands across all sectors and countries.
Brand Finance also operates the Global Brand Equity Monitor, conducting original market research annually on over 5,000 brands, surveying more than 150,000 respondents across 38 countries and 31 industry sectors. Combining perceptual data from the Global Brand Equity Monitor with data from its valuation database enables Brand Finance to arm brand leaders with the data and analytics they need to enhance brand and business value.
Brand Finance is a regulated accountancy firm, leading the standardization of the brand valuation industry. Brand Finance was the first to be certified by independent auditors as compliant with both ISO 10668 and ISO 20671 and has received the official endorsement of the Marketing Accountability Standards Board (MASB) in the United States.
Brand is defined 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 is the efficacy of a brand’s performance on intangible measures relative to its competitors. Brand Finance evaluates brand strength in a process compliant with ISO 20671, looking at Marketing Investment, Stakeholder Equity, and the impact of those on Business Performance. The data used is derived from Brand Finance’s proprietary market research programme and from publicly available sources.
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 Brand Rating up to AAA+ in a format similar to a credit rating.
Brand Finance calculates the values of brands in its rankings 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, while 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 Discount post-tax brand revenues to a net present value which equals the brand value.
Brand Finance has produced this study with an independent and unbiased analysis. The values derived and opinions presented in this study are based on publicly available information and certain assumptions that Brand Finance used where such data was deficient or unclear. Brand Finance accepts no responsibility and will not be liable in the event that the publicly available information relied upon is subsequently found to be inaccurate. The opinions and financial analysis expressed in the study are not to be construed as providing investment or business advice. Brand Finance does not intend the study to be relied upon for any reason and excludes all liability to any body, government, or organisation.
The data presented in this study form part of Brand Finance's proprietary database, are provided for the benefit of the media, and are not to be used in part or in full for any commercial or technical purpose without written permission from Brand Finance.
