Private equity-backed Nick Dunning Associates has bought London lettings agency Stirling Ackroyd and augmented its empire of 100 lettings agents across London and the UK. Set up in 2016 with backing from Alchemy Partners, Nick Dunning Associates is looking to capitalise on the stability of income offered by lettings management.
“The lettings business creates a steady profit stream,” said chief executive Nick Dunning.
“If you run a managed book you can have up to 80% of your monthly revenue from your managed book and as a result of that steady revenue stream and profit stream it becomes much more predictable in terms of what results you are going to deliver.
“The sales business is incredibly cyclical and subject to market conditions and changes. As a result, you can make £5m one year and lose £2m the next.”
Since starting in 2016, the agency has built up a portfolio of 34 branches and intends to build a company of around 100. Stirling Ackroyd is its third acquisition, after Adams Property in June and Badger Holdings Group in January.
“We would like to expand up to 100, and then we will look for another partner for the next stage of our journey,” said Dunning.
Dunning, sales director Graham Harrison, commercial director Matt Hewitt and chief financial officer Julian Irby have all worked together previously at Countrywide.
“Prior to setting up this business with my fellow directors, I was the commercial director at Countrywide,” said Dunning.
“I joined that firm in 2007 and part of my remit there was to build its lettings business, which was virtually non-existent. Over the next seven years, my team and I opened 200 branches and purchased around 20 letting business every year.
“In truth, setting up Nick Dunning associates is nothing more than what the four of us at Countrywide were doing.”
Most of the main agencies have set up their own letting agencies now. But according to Hewitt, 90% of the industry is still one-branch companies – though there has been some consolidation since 2007.
Dunning said that for the moment the expansion is concentrated within the M25, which offers the right opportunities at the right prices.
“Strategically we are prepared to go anywhere but now most of the opportunities are right here in London,” said Dunning.
“In reality you buy businesses only when they are put up for sale. At the minute there are lots of people who effectively want to sell their business, because London is such a big lettings market and sales market.”
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