Following the recent acquisition of the iProperty Group by the REA Group, Georg Chmiel from the iProperty Group and Arthur Charlaftis, Chief Operating Officer from the REA Group Limited were interviewed by Bloomberg TV Asia.
Here is the interview ...
As reported by Property Portal Watch on February 18, Australia’s leading digital advertising business specialising in property the REA Group has completed the its acquisition of Malaysian-based iProperty Group.
In 2014, the REA Group acquired a 17.22 per cent stake in iProperty Group and in July 2015, increased its stake to 22.7 per cent.
In November 2015, the company purchased the remaining shares at $4 per share, equivalent to AU$578 million. The deal valued the iProperty Group at about AU$750.8 million (US$532.6 million or S$749.6 million).
With a population of more than 500 million people, South East Asia is the world’s fastest-growing real estate market.
REA Group Chief Operating Officer Arthur Charlaftis says the advertising opportunity in South East Asia is worth about $1.2 billion which is equivalent to the Australian market, but the volume of transactions is double that of Australia at over a million a year.
Average property prices in Singapore and Hong Kong are already higher than in Australia, presenting a huge opportunity to grow the business.
According to iProperty data, in the next four years Malaysia and Indonesia will enjoy strong property prices, while Hong Kong come back from its decline with an uplift in supply and overseas investment will increase in Thailand.
Charlaftis says the addition of iProperty will provide a more complete geographical network for consumers to find property anywhere and developers or agent customers to market properties in more countries.
“We know there is a lot of trade between Australia and the South East Asian region,” he says.
“ iProperty will now be able to deliver more choice for consumers coming to the website and better results by driving more leads to its developer and agent customers from the REA global network.”
He also says investors can now benefit more fully from hedging options, choosing which way to go depending on the movement of foreign currencies.
Charlaftis adds REA Group shareholders will be looking to see a conversion from the traditional print and offline media in South East Asia where just 6 per cent of media spend is online compared to 43 per cent in Australia.
“We know the audience is there so we intend to leverage our expertise in print to online conversion to drive growth,” he says.
Plans to improve technology include improving the experience for agents in Australia wishing to upload properties and translating Australia’s strength in lead management to the Malaysian business.
“Key in IT will be sharing the platforms we’ve already built but we’ll work with each individual country on the basis of what’s best for them to improve throughput and ‘go to market’,” he says.