PropertyGuru has today announced that it has entered an agreement to acquire all of the shares of REA Group's business in Malaysia and Thailand. In return, REA Group will acquire an 18% stake in PropertyGuru as well as a seat on the company's board. The surprise announcement means that PropertyGuru will take over operations of iProperty.com.my and Brickz.my in Malaysia and thinkofliving.com and Prakard.com in Thailand.
Malaysia and Thailand are not the only countries in the region that are set to experience a seismic shakeup in the property portal landscape because of the REA - PropertyGuru agreement. The deal is contingent on REA Group selling off its 27% stake in 99 Group which operates iPropery and 99.co in Singapore as well as rumah123 in Indonesia. Talks around this proposed A$10M divestment are said to be at an advanced stage and not subject to a shareholder vote.
Speaking about the deal made with a fierce regional rival, REA Group Chief Executive Officer, Owen Wilson said:
“Building on the success of our operations in Malaysia and Thailand, this transaction presents a unique opportunity to create the most compelling digital property classifieds company in Southeast Asia and accelerate the next wave of proptech innovation across the region.”
The sensational deal announcement follows a long period of intensifying rivalry between PropertyGuru and iProperty in Malaysia during which there have been several claims and counterclaims of domestic market leadership citing various different metrics and sources. In recent years iProperty has slowly been losing ground to PropertyGuru in Malaysia in terms of brand strength and in February hired former Google employee Shylendra Nathan to the position of General Manager of its Malaysian operations.
Comments from PropertyGuru CEO & MD Hari V. Krishnan indicated that iProperty staff would largely be kept on to work on the integration of the two companies, for which the synergies and benefits of shared expertise are expected to be great:
"We welcome the teams who have built REA Group’s Malaysia and Thailand businesses as they join our team of Gurus. In the months ahead, we will work closely as a team and put in place a strategy that supports our combined businesses in both markets. By combining our resources, we will be able to deliver even more innovation to home seekers, equipping them with the insights they need to make confident decisions. Together we will also enable our customers, the agents and property developers powering the market, to reach an even wider audience and be more efficient in their allocation of resources."
Press releases from both parties this morning were keen to stress the nature of the opportunity provided by the deal and the potential of the property markets in the region. While REA Group claims an important stake in a business that is rumoured to be reigniting plans to go public, PropertyGuru gets the experience and clout of a Newscorp-backed giant behind it and both sides remove the resource-draining competition from markets that are experiencing a rapid digital transformation.