Aggregators Continue to Drag Lifull's Overseas Business Down in Q3

The real estate marketplace operator Lifull saw revenues stagnate over the third quarter of the Japanese financial year as its aggregation sites continued to suffer. Highlights from the Tokyo-based company's report for the three months ended June 30th included:

• Revenue stood at ¥8.5 billion ($57.6 million), down 4% year-on-year.
• Operating profit was ¥445 million ($3 million) while net loss for the quarter was ¥175 million ($1.2 million).
• The domestic HOME'S segment saw revenues of ¥5.9 billion, up 5.7% year-on-year.

Lifull operates one of the most diverse portfolios of any real estate portal operator in the world. Domestically it runs the Homes.co.jp portal as well as several adjacent businesses including senior care, a search engine for storage solutions and an investment company.

Lifull's Overseas segment includes aggregators Mitula, Trovit and Nestoria and real estate verticals dotproperty, Hipflat, LaEncontré and Properati.

It's this segment which has been causing some headaches for management. While the tech-enabled brokerage business—Thai-based FazWaz which was acquired in 2023— and real estate portals are performing well, the aggregation sites are continuing to see traffic drops.

The signs are ominous for Europe-based Mitula and Trovit as Lifull recently decided to sack the local management and manage the segment from Japan via Kiyoshi Shishido, the company's former auditor. In the commentary accompanying a shareholder presentation, the company admitted that recovery remains slow.

"We are already seeing partial improvement in some key business indicators, but over all recovery in actual results remains slower. We will continue to monitor the situation and make adjustments moving forward."

Below: Is time up for aggregators? The PPW Pod discusses whether time might be up for aggregation businesses.

Domestically the outlook is more sanguine for Lifull. Its Homes.co.jp portal saw revenue climb 5.7% year-on-year as it deployed new features to improve the listing recommendations it gives to users. The company noted that it saw a noticeable uptick in inquiries in the re-sale and new condos markets during the period and signed three tech partnership agreements with PropTech firms to accelerate technology development.

The portal saw robust year-on-year ARPA growth despite a slight contraction in the number of agents listing on the site.