Connells has upped the stakes in the increasingly naked ambitions of corporates to buy high street independents.
The corporates are tussling to build their businesses, signalling a message to small independents: name your price.
Connells has appointed Mike Rowley as acquisitions director – a new role.
It has also appealed for independents thinking of an exit route to contact it.
Rowley was previously managing director of Connells Survey & Valuation. He rejoins the company after a period of time out of the industry, which we are told he spent travelling.
Connells Group CEO David Livesey said: “We are delighted to welcome Mike back to the group.
“He brings valuable know-how to Connells and a wealth of experience in all areas of the property industry.
“We have signalled our intention to grow our lettings and estate agency presence nationally and Mike will significantly enhance our ability to do this.
“Also, having previously been a senior executive, Mike already knows the Connells Group inside out.”
Rowley said: “It took me a fraction of a second to jump at the opportunity to rejoin Connells at such an exciting time for the business.
“The Connells management team is made up of entrepreneurs who still think like independent agents. This will help me when talking to interested parties.”
Over the last year Connells has embarked on what it calls one of the most ambitious growth strategies ever undertaken by a UK agency.
Recent acquisitions include Peter Alan, one of the largest estate agents in Wales; Berkhamsted and Chesham based Adrian Cole & Partners; Platinum lettings in Crawley, Sussex; Harrisons lettings in Lincoln and most recently Farrell Heyworth in Liverpool.
In its statement, Connells emphasised that it is seeking to expand by acquiring estate agency and lettings business across the UK and is urging owners to get in touch if they would like to discuss this further.
Countrywide has also been snapping up agencies, as has LSL.
The buying spree is unprecedented since the 1990s, when corporate finance firms looked to expand their distribution networks by acquiring independents. Most were bought for small fortunes – but many were bought back cheaply by their owners not long after for as little as £1 when the market collapsed.
Another more recent major buying spree was started when London agent Farleys reversed into Humberts, enabling growth from a single office in London to a network of over 60. The move subsequently proved near-disastrous although Humberts has since bounced back.
Countrywide have also been on the acquisition trail in Lincoln. Two independent Letting Agents have sold so far this year to them. Can anywhere else beat three Corporate acquisitions so far this year?
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LSL are a big player. Market cap of £400m. We’ve had independent agencies in Sheffield and Gainsborough merge their existing businesses into our franchise businesses operating in those areas. This has happened without any planning on our apart and came from approaches from the other agencies. So this is quite interesting and something we’ll look to capitalise on going forwards as part of our growth plans.
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When one considers how dire some of the Countrywide Branch Network is, how low staff morale is, how poor the customer service is?….. makes you wonder why the don’t sort all their own shortcomings first?….. however the quick fix is lash out money on good independents…. let’s see how those businesses perform long term after being hoovered up by the corporates.
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Its not about buying well run independents its about buying the letting book.
With the increased costs of running sales in advertising, staff etc and the erosion of fees, the corporates are focusing on buying up lettings books as regular income and very seldom do landlords move.
Countrywide and a like have dismal staff moral as you point out but they are moving more and more towards call center ethos. lettings fits in well with this.
I would not be surprised if Countrywide soon launch their own online agency to run along side the high street offering. In my opinion they will start to merge branches (has happened already in some parts of the country) to again reduce the headcount,
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