BREAKING PROPERTY NEWS – 15/06/2022
Daily bite-sized proptech and property news in partnership with Proptech-X.
Dexters is fusing digital strategy with a traditional approach to deliver strong profits
Since 2017, like a prophet in the wilderness, my day job has been as a consultant to a large number of proptech and fintech founders. I’ve been doing my bit to convince real estate operators that the right type of digital transformation can add huge profits.
Dexters, it would now appear, are very much the industry’s case study, having just reported over a 30% uptick in its latest profits. With a gross profit of around £40 million on a £143 million turnover.
For any agency to digitally leverage its profit base, the business needs to be fundamentally a great business to start with, and Dexters was and is such a business. It was efficient and had a great brand with lots of key staff in situ for many years, running flagship offices.
Then, after seeing an opportunity, it enhanced its market position by selectively executing a people and tech strategy, which meant it could deal with more business. Yes, it has been on an acquisition trail buying up agency businesses, but it also bought market share and digital strength by buying Howsy, an app-based lettings platform, and the assets of Rentify.
There is no quick route to having a real estate business that delivers profits, it takes investment and total focused attention from the teams that run the branches.
But what is becoming clear is that there appears to be a two-tier league table opening up, where forward-thinking and forward-planning businesses who selectively embrace and invest in the right technology are squeezing out every last profit, whilst other agencies cling to their old models of business.
There is no quick route to having a real estate business that delivers profits, it takes investment and total focused attention from the teams that run the branches.
Though it wasn’t quite London, where Dexters and its other agencies under other brands operate, I was in a medium-sized town yesterday, with a population of about 170,000. Having not been there since the start of the pandemic, I noticed a large new agency perched at the top of the high street. As I walked around, I saw that a number of very established agency businesses had gone.
Over lunch, as I spoke with an old friend who is still very much in the property business, I learned that the new agent had acquired the other businesses and was now a very dominant player in lettings there. I said they could do this as the agency was using property technology to create the huge efficiencies that can be pushed into the lettings business.
Yes, it was still very much a people business, but a team of six in the new agency was dealing with the same workload that twenty staff across four former businesses were, whose owners thought excel sheets and a top-heavy human approach was a great way to run a business.
Pre-pandemic, perhaps. In 2030…definitely not.
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