A Morningstar analyst quoted by Realestatebusiness (REB) says REA Group’s purchase of Flatmates.com.au, announced this week is a ‘sensible’ move for the company.
In the research note published this week, Morningstar’s Gareth James, quoted by REB, says “The acquisition spreads REA Group more broadly across the online real estate market and is likely to strengthen its position as the leading online destination of real estate information in Australia.”
James asserts REA Group now commands listings from nine out of 10 real estate agents in Australia because the realestate.com.au brand has been built through “first-mover advantage”.
“So many people use realestate.com.au that it is more popular than the next 15 competitors combined,” REB quotes from the James’ research note.
The note suggests the acquisition of Flatmates.com.au reflects the REA Group’s ‘first mover advantage’ approach he describes, but it also applies to its brand penetration into overseas markets through the purchase of companies like Asia-based iProperty Group.
iProperty, acquired by REA Group this year, is based in Malaysia but also does business in Singapore, Hong Kong, Indonesia, India, Thailand, the Philippines and Macau.
“If international growth is successful, this business could grow significantly,” REB quotes James as noting.
News Corp holds a 61 per cent stake in the REA Group.
REA Group is the principal partner of the 2016 Real Estate Business Awards, to be held in Sydney on 16 June.