Brands based around bricks and mortar will increase, argues Paul Jayson, following the corporatisation of property and the focus on equities
| ? The real estate industry is trailing in the use of brands and logos ? REITs are part of a trend whereby property is becoming a separate and respectable asset class ? As in the |
In a sense, REITs can be viewed as global brand names that people respect. This has been evidenced in both the
For the past two or three years, the property press has been awash with articles on REITs. Much of this interest has been generated as a result of the mystique surrounding them. For some, they were seen as the property industry’s duty-free shop – a place where property could be traded tax-free. For others, they were and are a means to exploit the successes of the
Distinctive elements
Property that is held within listed securities is traded, valued and taxed in a different way from direct property. Property investment has generally been associated with nameless buildings and faceless landlords.
The recent, tax-driven trend to package up properties and migrate them into offshore entities emphasised this. Moreover, the industry’s obsession with property values has centred around the creation of short-term capital gains rather than a long-term brand value.
The “corporatisation” of property, helped in part by REITs, and the focus on real estate in the form of equities are likely to see an increase in the use of brands.
This is not mere crystal-ball gazing. In the late 1990s, two major
The branding concept carried over from the hotel industry, where a premium is placed on brand identity. Several academics have taken this further, arguing that, in addition to economies of scale, a key benefit of the consolidation of US REITs has been brand imaging.
The
With image-conscious tenants and customers, the retail sector could be expected to take the lead in brand issues, but the more recent involvement of Land Securities in the creation of a brand for its
As Land Securities explains, its “capital commitment” campaign strives to “market our offering in
Choosing the brand
It is essential to exercise care when selecting and adopting a brand in order to ensure that: (i) it will have a long and successful commercial life (ii) it will be legally protectable and (iii) its use will not infringe any third-party rights.
One of the first steps to take when establishing a brand is to carry out research into what competitors are using. This should include searches of trade marks that have already been registered. The research should be carried out in each area that is, or might realistically become, of importance commercially.
It is also crucial to find out which domain names are available. Clearly, it would be extremely unsatisfactory to invest in a distinctive brand name only to find that it is necessary to operate the related website at a domain name that does not directly reflect the brand. It is therefore sensible to purchase as many domain name variants as possible, as early as possible, to prevent any cybersquatter or other unscrupulous entity from using a close variant of the key domain name.
Once the brand has been chosen, it is advisable that as many elements as possible, such as words, logos and, possibly, colour combinations, are registered as trade marks in order to crystallise the rights claimed in those elements. It is possible to obtain a single registration – the Community Trade Mark – to obtain protection across the EU.
When it comes to the legal protection of brands and, in particular, any new logos, it is worth considering the possibility of registering them, throughout the EU, as registered designs. This is a quick and inexpensive process, which takes two to three months and costs €350 for the official fee. It provides extra protection beyond that offered by a registered trade mark.
In particular, registered trade marks have to be registered in respect of the specific goods and services for which they are to be used registered designs protect against use on any product.
Conclusion
Whether striving for economies of scale, a change in emphasis of growing net operating income or being answerable to the market and a new class of retail investor, REITs and other listed real estate securities are likely to take branding more seriously than has previously been the case. The marketing campaigns of Fidelity and others to offer property funds to the retail investor are evidence of the influence that brands will have.
Creating and using a brand is an aspect of the new era of demonstrating premium levels of service and value while focusing on the end users and the tenant for the benefit of the investors.
Paul Jayson is a partner in the real estate investment department at DLA Piper UK LLP
