This will strengthen Huttons’ current pool of brokers and enhance its capabilities to market residential projects
The consolidation among property agencies in Singapore continues, with Savills Singapore’s associates arm – Savills Residential – set to merge with Huttons Asia.
Savills Singapore is also Huttons’ largest shareholder.
The move will see Huttons strengthen its current pool of 3,044 brokers, with all 582 Savills commission-only residential brokers being invited to join.
This is expected to enhance Huttons’ capabilities in clinching appointments from developers to market their residential projects for sale.
Savills Residential is fully owned by Savills Singapore, which is part of the UK-listed company.
Marcus Loo, chief executive officer of Savills Singapore, said: This integration with Huttons, a dominant local player, presents a fantastic opportunity for Savills’ residential associate brokers to access a larger marketplace, enabling them to participate in the large number of projects that Huttons is currently handling.
The terms of the merger have been agreed, and the deal will be completed this month, said Chris Marriott, the CEO of Savills South East Asia. He declined to comment on the dollar value pegged to the transaction.
The post-merger business will trade as “Huttons – in association with Savills” and, as the largest shareholder, Savills Singapore will be represented on the board of Huttons Asia through Mr Marriott.
Currently, Savills is not represented on the Huttons board.
Huttons is a home-grown property agency set up in 2002. Savills Singapore acquired a stake in the company in 2005.
The other shareholders of Huttons Asia include Peggy Ngiam, its key executive officer, and Loke Tuck Choy; both are executive directors.
Mr Marriott said: We have had a long-standing interest in Huttons… and welcome the opportunity to take a more active position on the board and complement Huttons in their future growth in this important market.
Ms Ngiam noted that the “ability to draw on a globally recognised international residential brand will accelerate our growth as a leading agency in Singapore”.
Mr Marriott said: The merger means that Savills Singapore will focus on its full service real estate business in Singapore, overseen by Marcus Loo.
In a joint statement, Huttons and Savills said: The enhanced board will focus on strengthening services to their clients… through a newly expanded agency force and access to international markets, in particular China. In doing so, they will leverage on their PropTech and digital marketing knowledge, thereby broadening the opportunities for their brokers.
Post-merger, Huttons will retain its fourth position in terms of the number of property agents. Assuming all the Savills Residential brokers come on board, Huttons will have a total of 3,626 agents.
The top three agencies are: PropNex, with 8,727 agents, followed by ERA Realty Network (7,321 agents) and OrangeTee & Tie (4,359 agents).
SRI is in fifth position, with 960 agents. These figures were provided to The Business Times by the respective agencies on Sunday.
Market observers say the merger between Savills Residential and Huttons may be seen as the latest in the series of consolidations among property agencies in recent years. That said, this deal is unique given that Savills Singapore is already Huttons’ largest shareholder.
Commenting on the proposed merger, a veteran analyst said: If you don’t have a certain critical mass of agents, it won’t easily tick all the boxes for developers’ criteria in selecting sales marketing agents for their residential projects.
Another industry player noted that Savills Residential has been losing some agents lately and that it does not have as many project marketing appointments as the bigger boys. Huttons does get major appointments but it seems to have lost some of its shine in the past four or five years.
PropNex chief executive officer Ismail Gafoor noted that the property agency business has become more challenging since the introduction of the total debt servicing ratio (TDSR) framework in late-June 2013, which led to a slowdown in developers’ private home sales volumes. The situation has been exacerbated by the July 2018 property cooling measures.
SRI co-founder Bruce Lye expects the consolidation to continue. In a downturn, we can expect to see the smaller agencies (those with under 300 brokers) latching onto the biggger agencies, which have better resources and more opportunities to clinch residential project marketing appointments.
The wave of consolidations include PropNex’s merger with Dennis Wee Group in 2017.
In the same year, OrangeTee’s associates arm joined forces with Edmund Tie & Company Property Network to fend off competition by setting up a joint-venture company, OrangeTee & Tie.
In 2018, ERA entered into separate deals with CBRE Realty Associates and HSR International Realtors to absorb their agents into ERA as these companies were shutting down.
Last year, PropNex took over agents from Global Alliance Property.
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