Fine & Country CEO on firm's future plans

Adapting to change is key to survival in a market like Dubai which has undergone a massive transformation during the past two to three years. Predictably, several real-estate firms that simply didn’t have the wherewithal to survive in the changed market conditions had to close shop. At the same time, those who knew the market and business found themselves well placed despite the adverse situation. One such firm was Fine & Country and Property spoke to its CEO, Phil Sheridan, about where he sees the company heading, what new ideas it has come up with and what the state of the market is.

Tell us about the brand Fine & Country. What business model does it follow?

The company evolved ten years ago, dealing with high-end properties, typically with values of £1 million upwards or unique properties.

Fine & Country appreciates the most exclusive and more expensive properties require a more compelling, sophisticated and intelligent presentation — leading to a common, yet uniquely exercised and successful strategy enhancing the lifestyle of the property.

This unique approach to luxury homes marketing delivers high-quality, intelligent and creative concepts for property promotion combined with the latest technology and marketing techniques.

Fine & Country is a licensed model and not a franchise, since it doesn’t share in the profitability of the estate agency, but rather charges a fixed monthly licence fee and in return provides the branding and marketing collateral designed to increase market share at the most profitable segment of the market.

Dedicated marketing studios assist with the various marketing techniques, including that of advice on advertising [through] leading newspapers, audio and video tours, iPad and iPhone applications.

The next step for Fine & Country was to expand into the international market, and it did so in South Africa where it has established 50 stand-alone offices.

Then we came along and took the master licence for the Middle East, starting with
the UAE.

On a micro outlook of our scheme for sales advisers, we retain 50/50 commission splits for our property consultants and 70/30 for our senior property consultants.

Fine & Country is now a global network of licensed real-estate offices specialising in the marketing and sale of luxury residential property, with offices in the United Kingdom, South Africa, Dubai, West Africa, Qatar, Mauritius, Cyprus, Malta, Abu Dhabi, Portugal, Spain and the United States.

Fine & Country responded to the tough times by launching the Associate Director Programme early this year. What’s this concept all about?

We launched the Associate Director Program designed for those who wish to benefit from 100 per cent commission on everything they earn over Dh6,000 monthly.

We need a career progression path for this advisory team and we are looking to have a team of 45 by the end of 2011, 15 already being in place.

We have an in-house training academy and provide regular training to ensure minimum performance standards.

In the UK, with some 270 offices, the company is looking to the future, building on the programme by recruiting 500 associate directors, and in the US, some 1,500, within California alone.

The concept sounds interesting. Where did you get it from?

When I attended the Fine & Country international conference in the UK, I heard an incredible guy talk about the Associate Director Program.

He was an independent agent who was typically earning 30-40 per cent commission, running 24/7 and had aspirations to own his own business. However, he was also conscious of the fact that running a business can be financially challenging, so the programme came along to provide high-quality operators a platform where they can maximise their income and have more working flexibility than a normal property consultant would have.

Then we came to the conclusion that we had to adapt our business model, targeting independent operators running their own real-estate business requiring a trade licence, a local sponsor and a commercial lease — for they are the very people who would be better off coming to the Associate Director Program, retaining 100 per cent of their income.

Also the programme targets individuals, some of whom were previously working
with very big companies, running around 24/7 and would make 50 to 60 per cent — some even less. We believe the programme will change the face of realty-sector earnings in the UAE.

Do you think this concept will become more popular in the coming days? And will it make real-estate agents look at the business differently?

Yes. For anybody who works for an agency generating Dh15,000 to Dh20,000 per month in commission, this Dh6,000 is incidental to their overall earning potential.

Buyers and sellers probably don’t trust estate agents and we need to break that mould. We have an in-house compliance regime and training academy; we give regular training and make sure there is a minimum standard. Realtors in Dubai haven’t had a single day’s training in five years. So we are trying to break the mould, but it takes time.

The face of a real-estate agency has changed. Now a good operator can work online, a hot desk, and so on. Technology is also there to help you out. You can email property particulars, and there are audio tours, property tours, iPad applications. Fine & Country has its very own iPhone and iPad applications.

So someone who is at the top of their game needs to maximise their income through an international brand and operations support. Additionally, the Associate Director designation elevates their standing in the real-estate community.

The backing of a global winning brand, combined with full back-office support, office facilities, a dedicated marketing studio and training academy are but a few ingredients for a winning formula.

Where does the market stand compared with the past couple of years?

As far as the market is concerned, in terms of transactions, there is no doubt that it has picked up slightly this year. There are obviously far fewer advisers around and there seems to be a little bit of confidence in the market.

There is volume but of course the prices keep slipping. Supply and demand will eventually level the price of any commodity.

There is a massive supply to come, commercially and residentially. I hear that business applications are up through the free zones and municipality. I think Dubai has got some way to go.

The big thing is liquidity with finance houses providing mortgage funding. Once people start believing that the market has bottomed out, some tenants will switch to ownership stages as there is no difference in costs.

Also, cash investors are coming into the market believing they can probably buy Palm Jumeirah stock at Dh700 per square foot on a wholesale basis or JLT commercial property for Dh300 to Dh400 per square foot. That’s virtually the build cost. And the property is up and they are not taking the off-plan risk.

How do you look at Dubai as an investment option now?

With the way the prices have gone here, the personal security one gets and the fact that it remains tax free, Dubai is very attractive to international buyers. Once Dubai reinvents itself, it will be attractive to any investor.

Burj Khalifa at Dh2,500 to Dh3,000 per square foot is incredible value in the tallest building in the world, compared with buying similar space in Mumbai, Tokyo, Moscow, Tehran and London. There is value in this market. Investors with cash recognise that every market goes through peaks and troughs. This is a good time to buy. The government is doing many things to reinvent Dubai which will help in the long run.

Company’s timeline

2008 Fine & Country, a well-known brand on the global real-estate scene, is launched in the UAE.
2009 The firm reaches the milestone of 300 office locations worldwide, including Spain, Portugal, the US, the UK, Nigeria and Egypt.
2009 A showcase office is launched in Park Lane, London.
2010  The firm is voted World’s Best Marketing agency by Sunday Times and Bloomberg TV.
2010 Fine & Country launches its iPhone and iPad applications.