The chances of agents pulling listings and setting up their own site is close to vanishing
Rightmove is turning into a licence to print money, especially now Google has abandoned plans to offer free listings on Google Maps. Last week the website reported simply staggering profits of £56.6m on turnover of £81.6m. Hiking charges by 23% to £379 a month for each of their 18,000 estate agent offices produced that 70% margin. The 11-year-old business, which floated in March 2006, now has an 82% market share and is valued at a touch under £1bn.
The chances of the agents providing the information (and being charged for the privilege) saying, “hey, we are being milked, let’s pull our listings and set up our own site” is now close to vanishing point. But there is another site, PrimeLocation, set up in 2000 by posh agents, led by Savills and Knight Frank, which was sold to the Daily Mail & General Trust in 2006 for £48m. Here, the agents do occasionally think of pulling out.
In early 2009, the agents threatened to walk away and set up a son of PrimeLocation, after a three-year exclusivity deal expired. The agents got together and demanded to pay less; DMGT disagreed. After some huffing and puffing – including a letter from DMGT’s lawyers reminding the agents that price cartels are illegal – an uneasy truce was called and a new deal signed.
Every so often there are talks of pulling away and setting up a new posh listings site when the current agreement expires. Will the humungous profits being made by Rightmove get them talking again? Perhaps, or perhaps not. “It is a bit like herding stray cats,” says one gloomy agent, (no, not the one below) who, just a few months ago, tried to do some herding.
India is for gents
Nick Thomlinson is a gent. Not until one-third of the way through lunch last week did the senior partner of Knight Frank joke that my (joking) mention a fortnight ago of KF buying King Sturge was never on the cards.
King Sturge joint senior partner Richard Batten is a former officer as well as a gent. But let’s not try his patience with any further speculation. Instead let’s ruminate on the differing global ambitions of Savills and Knight Frank. A chat with Savills chief executive Jeremy Helsby, reported here on 12 February, found him keen on setting up a chain of residential sales shops in China. Knight Frank seems keener on India. Thomlinson has just returned from a visit to his 700-strong empire on the sub-continent, full of enthusiasm for a place that does have one distinct advantage over China in these troubled times: at least it’s a democracy.
Recycled solution?
Apologies: the following tale first appeared in the London Evening Standard on 25 February. But a mechanism invented by fund manager Richard Tanner, which helps overcome property liquidity issues, deserves a second, wider, airing.
Tanner and his team of former colleagues from UBS have set up a 50-50 joint venture in Jermyn Street with the American AEW Group, a €31bn (£26.3bn) real estate fund manager, of near-invisible profile. The prospectus for their first core fund comes out this week.
Contained in that document are details of how the fund will appoint independent assessors (including investors) to second-guess the official property valuations at times when the markets are plunging or soaring: far less contentious than the fund manager doing the job.
One law for Lorenz
Tony Lorenz is not a man who hesitates before entering a legal fight, as the editor before me at EG discovered to her chagrin 15 years ago. Now the man who once ran Baker Lorenz from narrow offices in Hanover Square is to prosecute his own case, in an attempt to recover £142,744 from a client whom, he alleges, pulled out of a deal to take 8,500 sq ft in Savile Row. Question: is anyone able to list an agent with more chutzpah than Lorenz?
Former EG editor Peter Bill contributes to estatesgazette.com/blogs
