According to industry sources and unconfirmed reports, PropNex Realty might be acquiring parts of Dennis Wee Realty (DWG), a homegrown agency with more than 1,000 salespersons.
Assuming the acquisition comes through, PropNex could potentially boost its current strength of 5,855 agents to nearly 7,000. It could overtake ERA Realty Network as the largest agency in Singapore. As at April 10, ERA has a headcount of around 6,200 agents.
An industry veteran says the acquisition price could be a mix of a fixed amount and a performance-driven component. The latter could be based the final number of DWG agents joining PropNex, or the revenue generated within a specified financial period.
“Some agents may decide to leave and join another agency,” he explains. Regardless, PropNex would enjoy an economy of scale as the additional cost of having more agents would be minimal, he adds.
In 2015, catalyst-listed bereavement care services provider Asia-Pacific Strategic Investments acquired Global Alliance Property with a prevailing headcount of 800 agents for $2.75 million. The price was subsequently slashed to $1 million owing to the weakening property market in Singapore.
Earlier this year, PropNex announced its expansion plan in the region. It is doing so through the master franchise model, starting with PT PropNex Realty Indonesia, which was set up in 2H2016. Over the past six months, PT PropNex Realty Indonesia has signed up 600 property agents across seven agencies, which are largely concentrated in East Java, Jakarta and Surabaya.
In the pipeline are plans to grow the number of agents to over 1,000 and to open five more offices in Jakarta by year-end. The target is to double the number of agents to more than 2,000 by next year, with 50 offices across major cities in Indonesia, including Bandung in West Java, Jogjakarta and Marang in Central Java, Makassar in Sulawesi and Balikpapan in Kalimantan.
Last year, PropNex joined forces with JLL to set up a team specialising in marketing luxury homes. Since then, PropNex has succeeded in marketing GuocoLand’s 381-unit freehold Leedon Residences, in addition to OUE Twin Peaks, Gramercy Park and V on Shenton
PropNex agents sold a total of 250 luxury residential units in 2016, up from about 80 in 2015. Incidentally, JLL acquired a 20% stake in PropNex International in August 2014. PropNex International is the project marketing arm of PropNex.