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Mon, Sep 07, 2020 – 5:50 am
Singapore
Consolidation among real estate agencies here continues. This time, Savills Singapore’s associate arm, Savills Residential, will merge with Huttons Asia.
Savills Singapore is also the largest shareholder in Huttons.
The move will see Huttons strengthen its current pool of 3,044 brokers, and will be invited to join Savills’ 582 commission-only residential brokers.
This is expected to enhance Huttons’ abilities to secure developer appointments to market their residential projects for sale.
Savills Residential is wholly owned by Savills Singapore, which is part of the UK-listed company.
Marcus Loo, CEO of Savills Singapore, said: “This integration with Huttons, a dominant local player, presents a fantastic opportunity for Savills’ residential partner brokers to access a larger market, allowing them to participate in the large number of of projects Huttons is currently managing. “
Terms of the merger have been agreed and the deal will be completed this month, said Chris Marriott, CEO of Savills South East Asia. He declined to comment on the dollar value linked to the transaction.
The post-merger business will be marketed as “Huttons – in association with Savills” and, as the largest shareholder, Savills Singapore will be represented on the board of directors of Huttons Asia through Mr. Marriott.
Savills is currently not represented on the Huttons board.
Huttons is a local real estate agency established in 2002. Savills Singapore acquired a stake in the company in 2005.
Huttons Asia’s other shareholders include Peggy Ngiam, its key CEO, and Loke Tuck Choy; both are CEOs.
Said Mr. Marriott: “We have had a longstanding interest in Huttons … and we welcome the opportunity to take a more active position on the board and complement Huttons in its future growth in this important market.”
Ms. Ngiam noted that “the ability to build on a globally recognized international residential brand will accelerate our growth as a leading agency in Singapore.
Marriott said: “The merger means that Savills Singapore will focus on its full-service real estate business in Singapore, overseen by Marcus Loo.”
In a joint statement, Huttons and Savills said: “The enhanced board will focus on strengthening services to its clients … through a recently expanded agency force and access to international markets, particularly China. In doing so, they will leverage their Knowledge of PropTech and digital marketing, thus expanding opportunities for their brokers. “
After the merger, Huttons will maintain its fourth position in terms of the number of real estate agents. Assuming all of Savills Residential’s brokers are incorporated, Huttons will have a total of 3,626 agents.
The top three agencies are: PropNex, with 8,727 agents, followed by ERA Realty Network (7,321 agents) and OrangeTee & Tie (4,359 agents).
The SRI occupies the fifth position, with 960 agents. These figures were provided to The Business Times by the respective agencies on Sunday.
Market watchers say the merger between Savills Residential and Huttons can be seen as the latest in a string of inter-agency consolidations in recent years. That said, this deal is unique given that Savills Singapore is already the largest shareholder in Huttons.
Commenting on the proposed merger, a veteran analyst said, “If you don’t have a certain critical mass of agents, you won’t easily check all the boxes for developer criteria when selecting sales marketing agents for your residential projects.”
Another industry player noted that Savills Residential has been losing a few agents lately and doesn’t have as many project marketing appointments as the big guys. “Huttons have big appointments, but they seem to have lost some of their luster in the last four or five years.”
PropNex CEO Ismail Gafoor noted that the real estate business has become more challenging since the introduction of the Total Debt Service Ratio (TDSR) framework in late June 2013, causing a slowdown. in private housing sales volumes of developers. The situation has been exacerbated by the July 2018 property cooling measures.
SRI co-founder Bruce Lye expects the consolidation to continue. “In a recession, we can expect the smaller agencies (those with fewer than 300 brokers) to hang on to the larger agencies, which have better resources and more opportunities to land marketing quotes for residential projects.”
The wave of consolidations includes the merger of PropNex with Dennis Wee Group in 2017.
In the same year, OrangeTee’s associate arm joined forces with Edmund Tie & Company Property Network to defend itself against competition by creating a joint venture, OrangeTee & Tie.
In 2018, ERA entered into separate agreements with CBRE Realty Associates and HSR International Realtors to absorb their agents into ERA while these companies closed.
Last year, PropNex took over the agents for Global Alliance Property.
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