Each day you open the newspaper you will see some kind of celebrity property investor in the headlines talking about their latest development. Very often their name will allow them access to editors and prominent journalists which would ultimately be off limits for most investors. However, do celebrity figureheads help property developments or hinder them?
Those who follow the worldwide real estate market will know that Mark Zuckerberg was recently forced into a humiliating climbdown amid suggestions he was going to compulsory purchase various small plots on his $100 million property development in Hawaii. These plots have been held by many families for decades and are dotted around Zuckerberg’s land. Initially his solicitors issued what were effectively compulsory purchase orders taking the owners to court to arrange a sale.
This prompted headlines across the globe amid suggestions that the head of Facebook was using his power, influence and money to force small families into selling their properties. As we highlighted above, ultimately the move was withdrawn but would this have received as much headline news around the world if it was not a celebrity property owner?
Ryan Giggs and Gary Neville
As we touched on yesterday, a £200 million property development which would change the look and feel of the centre of Manchester has hit some significant turbulence. The development is led by former Manchester United players Ryan Giggs and Gary Neville which in itself has split opinions across the city. Indeed the proposed demolition of historic buildings to make way for the new development has also cast these two multimillionaires in a difficult light. Many in the press have indicated these two players were using their name to attempt to ride roughshod over public opinion.
Again, if they were not famous around the area and multimillionaires would their proposed property development have received as much criticism or as much coverage as it has?
Big names raise big money
There is no doubt that a celebrity investor can have a significant impact upon the amount of money raised to fund a property development. These famous individuals tend to demand headline space which furthers the property development itself and encourages more investors to step forward. Sometimes the “celebrity investor” may have a minimal stake in the operation but other times, such as Ryan Giggs and Gary Neville, they can be very active. This is a very positive aspect of having a big name heading a property development.
Unfortunately for celebrity investors not all of the media coverage they receive will be balanced. Some individuals will look to pay back on issues in years gone by while others may simply attempt to influence the public’s opinion. As much as a big name can be helpful when raising money it can sometimes attract unwanted attention and not all of it is relevant but it can rub off on the property development. Sometimes the political elite like to flex their muscles and go toe to toe with celebrity investors to show they will not be pushed around. So, on one hand it is good to have a celebrity name there but on the other, depending upon the celebrity, it does not always attract positive coverage.
In the two examples above Mark Zuckerberg and Ryan Giggs/Gary Neville saw their property interests become headline news simply because of who they are. The press like to take a “David and Goliath” approach to celebrity investors often giving the impression they are trying to push the “little men” around. A lot will depend upon the stature and the reputation of the celebrity investor but this is most certainly a double-edged sword, great for raising money but it can sometimes attract unwanted attention.