Breaking Property News – 23/10/2023
Daily bite-sized proptech and property news in partnership with Proptech-X.
Chesterons UK acquired by Proptech Emeria
Proptech – Property technology – the digital transformation of real estate – it is quite a simple formula – instead of trying to sell into and then retrofit piece by piece new operating models and software into disengaged estate agencies, we will see many more proptechs like Emeria scoop up established, analogue agency players and leverage the true profit line through the roof. A pattern we will see more and more of as Covid-19 proved that ‘property’ the plan, build, sale, lease and management of real estate assets is perfectly aligned to the efficiencies of a digital rather than human model.
Why this sale at this time? Well at the moment many Proptech players such as Emeria (already operating across a number of property asset verticals and in a number of countries) are hungry for new clients, they have the deliverable state of the art digital solutions, but it is often a go slow war of attrition to generate new sticky users.
But by buying an agency you then have your own business that you can convert using the technology your company owns. So in many ways you do not just acquire an agency you are buying a distribution hub for all your services, this is a strategic way to grow in a down global economic market. Re-inventing established agency brands and equiping them to trade profitably in a digital age.
As reported in the Financial Times Monday 23rd October by Ivan Levingston and Akila Quinio
‘Chestertons, one of the UK’s oldest estate agents, has been sold to a European real estate services and technology group, in the latest sign of consolidation in the British property sector. The more than 200-year-old London agency has been acquired by Emeria, which is owned by the Swiss private equity firm Partners Group. Emeria is paying about £100mn for Chestertons, a person familiar with the deal said.
The sale of Chestertons, confirmed by both sides on Monday, follows an almost two-decade-long turnaround effort at the company and comes amid intensifying pressure in the UK housing market from rising mortgage costs following successive interest rate rises by the Bank of England. The market is on track for its slowest year in more than a decade, according to property portal Zoopla, with house prices falling in recent months from pandemic-era highs.
Chestertons was founded in 1805 and bought out of receivership in 2005 by the Mercantile Group, led by Salah Mussa. Mercantile combined Chestertons, which focuses on sales and lettings of upmarket homes in London, with Humberts in 2009 after buying the majority of Humberts out of administration. The company split the two brands again in 2014. Mercantile also owns residential developer Wellingtons and mortgage broker Springtide Capital. While Emeria is acquiring Chestertons’ UK operations,
Mercantile will remain the owner of the company’s other international operations. “With 2023 set to be a record year for the business, [the deal] demonstrates how we have transformed from a struggling small agency, into a thriving, resilient business,” Mussa said in a statement. Mercantile declined to comment on the terms of the deal.
Under Mercantile’s ownership, Chestertons has expanded in the UK to 30 branches from nine locations. Its global brand operates in 12 other countries. In the UK, Chestertons’ revenue rose from below £17mn in 2006 to a forecast record revenue of £70mn in 2023. Turnover rose 28 per cent to £58.3mn in 2021, with £13.3mn in earnings, according to its latest accounts filed with Companies House.
In a joint statement, Chestertons and Emeria said the deal would lead to “substantial investment into expansion of the 200-year-old business” but declined to comment on the price. Emeria has more than €1.5bn in annual revenue and 700 branches, with 17,000 employees across eight countries, according to its website. It has brands including Knight Square Insurance and lettings and management company Campions in the UK. Emeria is also backed by the private equity group TA Associates’.
Three-peat ESTAS victory for The Guild of Property Professionals
On Friday, October 20th, The Guild of Property Professionals achieved an extraordinary three-peat victory, clinching the prestigious ESTAS award for Best Agency Network for the third consecutive year. This remarkable achievement was based on the collective ratings garnered by participating Guild agents from homeowners across the United Kingdom, utilising the esteemed ESTAS review platform. The Guild’s network amassed a staggering 13,000 ESTAS reviews, boasting an impressive average customer service rating of 96.6%, a testament to the network’s steadfast commitment to excellence.
Iain McKenzie, CEO of The Guild of Property Professionals, expressed his elation, stating, “We are delighted to once again receive this accolade, a tribute to our Members’ indispensable contributions to the property industry. We take great satisfaction in knowing that our Members consistently deliver outstanding service to their clients.”
In addition to the Best Agency Network 2023 award, The Guild also walked away with the Supplier Award for Best in Sector 2023, Agency Network as rated by agents, another remarkable achievement. Commenting on the win, McKenzie says, “We are really proud of this award. Our passion lies in supporting independent property professionals, continuously providing them with the tools, services, and support necessary for thriving and delivering exceptional customer service, regardless of market conditions. Our primary objective is to empower our network to excel, expand their market presence, enhance revenue, reduce costs, and maintain compliance – these core principles guide our organisational decisions.”
The 20th anniversary of the ESTAS marks their dedication to spotlighting some of the finest estate and letting agents in the UK, exclusively determined by feedback from customers who rate the service levels delivered by agents at the end of property transactions.
At the event, Guild Members garnered a multitude of ESTAS accolades, including gold, silver, and bronze awards, as well as numerous regional and Best in Postcode honours. The coveted title of Guild Agent of the Year 2023 was awarded to C Residential.
McKenzie acknowledged the numerous challenges faced over the past year, including economic pressures, interest rate hikes, and the cost-of-living crisis, which impacted countless households. He commended agents for rising to the occasion and assisting people in their moves.
“The ESTAS provides us with an opportunity to reflect on the remarkable work done by so many agents over the past year and celebrate property professionals who have excelled in providing exceptional service to their clients. The fact that these winners are chosen solely based on the service they deliver makes the ESTAS even more special. There is no greater honour in the industry than receiving an award judged by such high standards,” he added.
Andrew Stanton Executive Editor – moving property and proptech forward. PropTech-X
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