REA Group Limited, a digital media business specialising in property, has completed acquisition of the iProperty Group.
The acquisition is set to position REA Group as the clear market leader in the online real estate industry across the Asia Pacific region.
Prior to the acquisition, in 2014, the REA Group acquired a 17.22%stake in iProperty Group and in July 2015, increased its stake to 22.7 per cent.
In November 2015, the company purchased the remaining shares at $4 per share, equivalent to AUD $578 million. The deal valued the iProperty Group at about AUD $750.8 million.
“This move is a game changer for our industry,” said Arthur Charlaftis, chief operating officer, International and Developer at REA Group Limited.
“The iProperty Group’s local market expertise is second to none and our teams will be working closely together to tap into the needs of buyers throughout the region and deliver even more value to our customers and consumers.”
He added that with a population of more than 500 million people, South East Asia is the world’s fastest-growing real estate market.
Average property prices in Singapore and Hong Kong are already higher than in Australia, and the volume of transactions also exceeds that of Australia, with more than a million property transactions per year in South East Asia.
“The total advertising spend is at a similar level to Australia however in the key South East Asian real estate markets, online only accounts for between 2% to 12% of the total advertising spend,” Charlaftis continued.
“We know that consumers in South East Asia are online and connected. We would therefore expect that the advertising spend will migrate rapidly towards online channels to mirror consumer media consumption.
“These factors have driven our interest in the South East Asian market, and in particular, in iProperty Group, which has a demonstrated understanding of the market, the customers and what it takes to continue to grow and succeed in this industry,” he added.
The iProperty Group, which operates in six countries with clear leadership in Hong Kong, Indonesia, Thailand and Malaysia and with leading portals in Singapore and Philippines, has established an excellent reputation in the industry.
“This acquisition also further demonstrates our commitment to international expansion and is the next step in our growth strategy. We are very excited to welcome the iProperty Group to the REA family,” said Charlaftis.
iProperty Group CEO Georg Chmiel added: “We have strong synergies with REA Group and this acquisition is a major accelerator as this significantly enhances the growth profile for both companies, while giving our customers, property buyers and investors the opportunity to tap into a wider market.”