SINGAPORE (EDGEPROP) - With the residential project marketing business becoming increasingly competitive, there has been a series of mergers and acquisitions among the various real estate agencies over the past three years. The latest to go down that path is Savills Singapore and Huttons Asia. Over the weekend, a deal is said to have been struck, whereby all agents at Savills Residential will move across to Huttons Asia, which will solidify the latter’s position as fourth largest agency in Singapore.
Based on the number of agents registered with the Council of Estate Agencies (CEA), Huttons has 3,039 agents, as at Sept 5. Assuming all 582 agents at Savills Residential cross over to Huttons, that will bring its total number of agents to 3,621. Hence, Huttons will remain firmly in fourth place, after OrangeTee & Tie, which is in third spot with 4,360 agents (See Table).
OrangeTee & Tie is the result of a merger in August 2017, between the agents of Edmund Tie and OrangeTee, which propelled the combined entity into the third spot. The second largest agency is ERA Realty with 7,321 agents and PropNex is in top spot with 8,728 agents.
Savills Residential is currently ranked sixth. Its merger with Huttons means it will no longer be listed as a standalone entity on the league table of Singapore’s agencies. Its removal will also mean that SRI will now sit comfortably in fifth place with its latest tally of 960 agents. Sans Savills Residential from the table also means Knight Frank’s KF Property Network will move up from seventh to sixth place. It has 438 agents as at Sept 5 – which is less than half the size of SRI’s.
The merger between Savills and Huttons comes as no surprise. After all, Savills has been a major stakeholder in Huttons since January 2005, when the London Stock Exchange-listed global real estate services firm merged with Singapore-based Hampden Real Estate. Hampden’s chief, Michael Ng, became the first managing director of Savills Singapore in 2005. Ng left Savills in 2010 to join United Industrial Corp as its group general manager. In 2017, he joined Chip Eng Seng Corp as executive director of its property development and investment subsidiary, CEL Development.
Prior to its merger with Savills, Hampden was the result of a rebranding and repositioning of the former Hamptons International, a firm focused primarily on the marketing of UK properties. When Ng bought Hamptons from its British owners in September 2001, one of the conditions for the acquisition was that the company’s focus should switch to the Singapore residential market. “At that time, Hamptons was bleeding as the appetite for UK property was affected by the Asian Financial Crisis,” relates Ng. “It was a tough time because Sept 11 was followed by the economic recession in 2002 and SARS [severe acute respiratory syndrome] in 2003. But switching to Singapore residential business worked well with the Hamptons legacy.”
Even as he was overhauling Hampden’s business, Ng co-founded Huttons Asia in 2002 with Herman Chang, founder of property developer Macly Group, as well as realtors Peggy Ngiam and Loke Tuck Choy (aka TC Loke). Ng held a 48% stake in Huttons, which Savills took over following the merger with Hampden in 2005.
Apart from the 48% stake that is now owned by Savills, Chang and Ngiam each hold a 20% stake in Huttons, and Loke, the remaining 12%, according to an ACRA (The Accounting and Corporate Regulatory Authority) search on the company.
At its inception, Ng’s idea for Huttons was to create “a lean and mean agency, with pure-commission agents”. That completely changed the rules of the game. Until then, the residential project marketing business was dominated by the big international property consultancies such as CBRE, DTZ (now Edmund Tie) and Knight Frank. These agencies kept a bigger cut of the commission for themselves, and less for the individual agents, recounts Ng. “But Huttons operates very much like a budget airline with low overheads and high volume.” In fact, Huttons is known to hand over up to 95% of the commission received to its agents and keeps just 5% for itself.
Following the merger with Savills in 2005, Huttons initially started by playing a supporting role to the Savills Residential team in the projects they were marketing. Huttons then started to venture out to secure its own project marketing business – starting with boutique developments of “shoebox units” and moving its way up to mainstream projects by established developers, where it was appointed joint marketing agencies with the international property firms.
Over the past decade, Huttons earned a reputation for achieving very high sales rates on launch weekend, with sales conducted by balloting. It has since set a precedent in the way sales are conducted on the first day of launch.
However, the property cooling measures since 2013, with the imposition of the total debt servicing ratio (TDSR) loan framework, higher additional buyer’s stamp duty and lower borrowing limits combined, made it increasingly difficult for project marketing agents to achieve the same high sales rate they had in the past.
In recent years, other property agencies such as PropNex, ERA and SRI have also been aggressive in beefing up their agency teams and muscling their way into the residential project marketing business. The movement of big teams of agents from one agency to the next over the past two years had also shifted the scales, resulting in the new pecking order today.
For Huttons, one of the biggest departures was in September 2018 when Ken Low, who had specialised in residential project marketing and led one of the biggest teams of agents there, left the firm. Low joined SRI as managing partner and launched the firm’s residential project marketing business.
The merger with Savills Residential could lead to the “corporatisation” of Huttons and change the way the business operates.
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