Passing of an ERA? Top realty firm may be sold
The
Business Times | MAY 10, 2013
ERA brand said to be on
market with $150m price tag
[SINGAPORE]
Harry Chua, a key figure in Singapore's real estate agency industry, is looking
to sell his baby - ERA Realty Network - for about $150 million.
Mr
Chua's Hersing Corporation is understood to have put the group's master
franchise rights to the ERA brand on the market. Hersing's rights to the US
brand covers Asia-Pacific and are perpetual renewal rights, renewable every 30
years.
ERA
has about 9,000 agents across the Asia-Pacific in countries such as Japan,
Taiwan, Thailand, Korea, Malaysia and China. Most are located in Singapore,
where ERA has 5,103 agents, according to data from the Council for Estate
Agencies.
The
agency is currently led by Richard Tynes, who took over as chief executive
officer in January this year. Running the show previously was Jack Chua, who
has been with Hersing for over 20 years and is widely regarded as a key figure
at ERA, and the agency's dealmaker.
BT
understands that Mr Jack Chua, who is Hersing's CEO, is currently more focused
on growing the Singapore outpost of famed Hong Kong dim sum chain Tim Ho Wan -
which opened recently at Plaza Singapura. Mr Harry Chua owns the franchise
rights to the Tim Ho Wan brand for the Asia-Pacific region.
"ERA
gets a lot of projects due to Jack," said a source, who declined to be
named.
In
response to BT's query on the sale, Mr Tynes said: "Harry Chua has
received interest from external parties regarding a potential transaction with
ERA and is in the process of evaluating it.
"Harry
Chua receives interest in ERA from time to time due to the long term success
and future potential of the business and brand."
Talk
that the ERA brand may change hands has been in the market for more than a
month. Said the managing director of a real estate agency here, who declined to
be named: "There are people who are interested, but the issue is the
price."
The
move to sell the ERA franchise rights comes after Hersing was delisted from the
Singapore Exchange Mainboard in November last year after more than 14 years as
a listed company with earnings largely driven by the ERA business.
A
group-wide restructuring exercise led to the individual units all appointing
their own CEOs. Previously, all units came under the direct purview of Mr Jack
Chua, who has been Hersing's CEO from 2011. Prior to that, the group was helmed
by Mr Harry Chua, who is now Hersing's executive chairman.
Mr
Harry Chua, who is 66 years old this year, is an established figure in the real
estate scene and is credited for having sold 12 condominiums on one record-
breaking afternoon in 1979.
He
brought the ERA brand into Singapore in 1982, when it was still an unknown US
name, and set up shop in a 2,000-sq-ft office on the fifth floor of Plaza
Singapura.
Under
his leadership, ERA grew from selling $25 million worth of properties in its
first year, into an agency that made $1.1 billion in property sales in 1993.
It
was also under Mr Harry Chua that ERA launched new products for the resale
market such as a Seller Security Plan, which promised: "If we don't sell
your house, ERA will buy it". Other marketing programmes it initiated
includes one that assured buyers of Housing and Development Board properties the
return of their deposit if a seller is later found to be a bankrupt.
In
1998, Mr Harry Chua listed Hersing - which at that time was made up mostly of
the ERA business, and which therefore made ERA the first property agency in
Singapore to be listed.
By
2011, the year before Hersing was delisted, ERA was involved in over 35,000
transactions with a total property value of about $17 billion, according to
Hersing's annual report that year.
ERA
is a large contributor to Hersing's bottomline. In 2011, the real estate
services business accounted for 86 per cent of the $274.2 million in total
revenue that Hersing made.
Profit
after taxation from the real estate business was $13.7 million, although
Hersing's profit after tax that year was $12.8 million due to losses incurred
by its self storage, design and furnishing services segment.
Hersing's
real estate services business includes ERA, real estate course provider RIA
School of Real Estate, and Coldwell Banker - which Hersing holds master
franchise rights to in Singapore.
Hersing
also runs self storage business Storhub, and design and furniture companies
such as Casa Kidi and HC Design. It also manages Western Union Money Transfer
Singapore.
In
April, it opened the Singapore branch of Tim Ho Wan, and has plans for more
outlets in Singapore and in the region.
Martin Koh | 86666
944 | R020968Z
Sherry Tang |
9844 4400 | R020241C
Senior Sales Director
DTZ Property
Network Pte Ltd (L3007960A)
Email: marshe_inc@yahoo.com.sg