The 7 Biggest Real Estate Portal Mergers and Acquisitions of 2021 (Plus 2 Near Misses)

December 9, 2021
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When we analyse our output at the end of the year, there is one category of news that comes out above all the others in terms of page views and engagement. Everyone loves a good M&A story it seems and this year, like last year, there have been some big ones in the real estate portal industry to talk about...

PropertyGuru buys out bitter rival iProperty

We’ll start this year’s roundup with what feels like the most important deal of the lot. In May Singapore based PropertyGuru signed a deal to buy out Australian portal operator REA Group’s titles in Southeast Asia. 

Until the deal, Malaysia’s was the market with perhaps the bitterest real estate portal rivalry between PropertyGuru and REA-owned iProperty. The two portals are now both owned by PropertyGuru which is set to go public via a SPAC merger in the next few months and dominate in the country as well as in its home country.

There are plenty of implications for both companies as well as for regional rival 99.co which REA Group has had to divest from as part of a deal that ex-REA Group CEO Simon Baker called “obvious” and “the right deal”.   

 

Four-way deal for Swiss market tie-up

What do the top four Swiss property vertical sites all have in common since September 2021? Well, they all form part of the same joint-venture company set to dominate the market for years to come.

Classifieds operators TX Markets and Scout24 Schweiz (through its owners Ringier and die Mobiliar) have come together with General Atlantic (which has plenty of online classifieds experience with the likes of Hemnet) to effectively seal off the Swiss market from outsiders.

ImmScout24.ch, Homegate, Flatfox, Home.ch and many smaller verticals and horizontals are now under the same umbrella.

 

TradeMe seals NZ market by buying Homes.co.nz

Another deal which is important because it has effectively sealed off a lucrative market to outsiders. TradeMe is a dominant generalist classifieds title in New Zealand with a very strong real estate vertical made much stronger by the September acquisition of Homes.co.nz for an undisclosed sum.

The merger was not without its opposition with one anonymous letter submitted to competition authorities claiming that:

"The merger will strengthen an already substantial degree of market power in TradeMe. TM will use this power to gain close to 90 per cent-plus of available margin, the cost to consumers will move into the $500 to $1000 range for listing a residential house in Auckland and this price can only be gained through having an untouchable network effect strength.”

 

REA Group buys publicly-listed Mortgage Choice

When a portal company buys out a fellow listed business for A$244 million it’s always going to make this list.

The price may have been high, but there is potentially a big reward in it for REA according to a release on the Mortgage Choice website:

“a significant national broker footprint in Australia’s $400+ billion annual home loan market with more than 940 brokers, more than 720 franchises, over 40 lending partners and a loan book over $84 billion dollars.”

REA Group is getting into mortgage brokerage in a big way and Mortgage Choice was the company’s second big move in the sector. In 2017 the company paid some A$67 million for a stake in brokerage business Smartline going on to acquire the remaining shares in the company two years later for a further A$16 million. 

Now the two businesses have been merged and REA is now the biggest player in real estate leads in Australia and one of the biggest in mortgage leads as well.

 

CoStar doubles down on residential with Homes.com purchase

CoStar desperately wants a big slice of the lucrative residential American pie. To do so, the commercial giant knows that it will have to take it from Zillow’s table by building a marketplace that consumers want to use. 

A big part of that is a domain and a brand that consumers will recognise. That’s why in April the company forked over $156 million to Dominion Enterprises for its challenger portal Homes.com.

Homes.com’s domain and front end with Homesnap’s agent tools and well-rated mobile app is the combination that CoStar is hoping will shift Zillow out of the dominant it has enjoyed for many years. 

 

Zillow generates controversy with ShowingTime acquisition

Perhaps 2021’s most controversial acquisition in our industry, Zillow’s $500 million acquisition of the popular showing management tool provider ShowingTime really had US agents’ backs up.

The concern was not only that a portal company was getting into yet another area around real estate transactions but that it was set to inherit a lot of user data from ShowingTime (which also has an analytics platform) that in theory, it could use to disintermediate agents. Below: US market expert Brain Boero tells us all about Zillow-agent relations.

Needless to say, Zillow’s newest rival CoStar has developed its own rival to ShowingTime in response as have others in the market. If CoStar’s acquisition of Homes.com was a declaration of war in the US residential market, Zillow’s ShowingTime acquisition might just have been the spark that kicked it up a gear.

 

KE Holdings pays $1.2 billion for home renovation business

This one almost certainly went under the radar for a few people, but it shouldn’t have. When the world’s biggest real estate marketplace company pays $1.2 billion to acquire a well-established player in a lucrative adjacent market, other marketplace companies around the world ought to take notice.

KE Holdings, the parent company of leading Chinese real estate marketplace Beike and brokerage Lianjia, is on record as saying that it wants to expand and be a touchpoint for every transaction Chinese people make around their homes. 

With the problems being suffered in the Chinese primary real estate market since the Evergrande debacle, the move to acquire adjacent businesses and build tech that compliments it is looking wiser by the day.  

 

There were a couple of potentially massive deals which were kiboshed this year as well...

 

CoStar fails in multi-billion bid for CoreLogic 

This one would have been big! CoStar is the undisputed heavyweight champion of commercial real estate in the United States and CoreLogic is a publicly listed data intelligence company with a market cap of around $6 billion and operations all over the world.

The eventual no-deal played out in public with CoStar admitting that talks had been taking place back in October 2020. From that point, there were several massive bids submitted by CoStar including one worth $7 billion which actually outbid eventual buyer Stonepoint Capital and Insight Partners by 20%.

With the FTC snooping around the deal there were ultimately no guarantees that a deal would be allowed and CoreLogic CEO wrote to CoStar to say that CoStar’s bid was lacking “with respect to the following key areas: (i) value, (ii) certainty of value, and (iii) certainty of closing in a timely manner", so that was the end of the matter.

Instead of total world commercial real estate data domination, CoStar decided to go after Zillow in residential instead and in doing so provided some great headlines for us.

 

Competition authorities block Avito’s purchase of Cian

Prosus-owned Avito.ru is the leading general classifieds player in Russia and Cian.ru is the leading specialist real estate vertical. It might have been a match made in shareholder-heaven were it not for the Russian competition authorities who in October blocked the deal from going through over concerns that a combined 62% market share would have stunted the market.

After being denied a merger with a big rival, Cian decided to go down the road to an IPO and eventually went public on the NYSE a few weeks later raising $290 million in the process and is looking to enter the European portal big leagues while building out its end-to-end rentals product and monetise regional listings.

December 9, 2021
Edmund got to know the world of portals and marketplaces working at Mitula Group (which became Lifull Connect after the buyout in 2018). He worked directly with hundreds of portals across the world in his role in the content department for three and a half years before transferring to the SEO department to understand the inner workings of listings sites. He joined Online Marketplaces as Head of Content in March 2020.

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