SINGAPORE: Australian real estate website company REA Group completed the acquisition of Malaysia-based iProperty Group on Wednesday (Feb 17), in a deal that it described as being a “game changer” for the industry.
REA, which is 62 per cent owned by media magnate Rupert Murdoch’s News Corp, first announced in Nov 2015 its decision to buy the rest of iProperty Group that it did not already own for A$578 million (S$576 million). The deal valued iProperty, a real estate portal listed on the Australian Securities Exchange since 2009, at about A$750.8 million.
Prior to the acquisition, Melbourne-based REA owned about 22.7 per cent of iProperty
“This move is a game changer for our industry,” Arthur Charlaftis, chief operating officer for International and Developer at REA Group, said at a media launch in Malaysia. “The iProperty Group’s local market expertise is second to none and our teams will be working closely together to tap into the needs of buyers throughout the region.”
The deal will add iProperty’s property portals in Malaysia, Hong Kong, Thailand and Indonesia to REA’s stable, giving the latter exposure to a rapidly-growing Southeast Asian market.
According to figures by REA, average property prices in Singapore and Hong Kong have surpassed those in Australia. Southeast Asia is also home to more than a million property transactions per year, a number that exceeds the volumes in REA’s home market.
“These factors have driven our interest in the South East Asian market,” said Mr Charlaftis. “We know that consumers in South East Asia are online and connected. We would therefore expect that the advertising spend will migrate rapidly towards online channels to mirror consumer media consumption.”
“The iProperty Group provides us with exposure to new geographies where we can apply our experience and know-how from existing markets,” added Mr Charlaftis. He also said that the acquisition underscored REA’s “commitment to international expansion” and marked “the next step” in the company’s growth strategy.
According to iProperty’s chief executive officer Georg Chmiel, the firm will retain its name and “continue operations and business as normal”.
“We have strong synergies with REA Group and this acquisition is a major accelerator as this significantly enhances the growth profile for both companies, while giving our customers, property buyers and investors the opportunity to tap into a wider market,” Mr Chmiel added.
iProperty was founded in 2007 by Patrick Grove, a Singapore-born serial entrepreneur and co-founder of Kuala Lumpur-based tech investment firm Catcha Group.
On Wednesday, shares of REA Group closed down 0.23 per cent at A$50.96, tracking a 0.57 per cent decline in the broader S&P ASX 200 index.