Real estate chain LJ Hooker is in negotiations to buy at least part of Melbourne agency Barry Plant Group ahead of an expected $400 million initial public offering next year.
The move is part of a wave of floats and consolidation in the real estate agency and advisory sector, with Real Estate Investar Group yesterday completing an IPO and listing on the ASX.
LJ Hooker is said to be eyeing a stake in the ownership of Barry Plant, or perhaps strike a joint venture arrangement with the Victorian firm. The well-regarded Barry Plant — partly owned by founder Barry Plant as well as Vic Care — owns about 80 franchises and has an 11.6 per cent of the market share in Melbourne.
It understood that the Barry Plant brand would remain despite a potential change in ownership of the company.
It may give the Barry Plant brand a way to realise its ambition to expand beyond Victoria.
A spokeswoman for LJ Hooker confirmed that the negotiations were in play.
“LJ Hooker and Barry Plant have had initial talks and are continuing their discussions. No deal has been reached. These discussions are only one of many in the industry taking place,” the spokeswoman said.
Barry Plant Group chief executive Mike McCarthy also confirmed that the group was in talks with LJ Hooker but said nothing had been agreed.
He said Barry Plant was not for sale, with the negotiations about brand “synergies” or a “joint venture”.
“We have certainly had discussions with LJ Hooker as we have with a number of groups and those discussions broadly are getting to the pointier end. Where they go from here we are not quite sure. They could go somewhere or they may go nowhere. It’s too early to tell,” Mr McCarthy said.
The move could follow a model in the US, where a behemoth agency, Realogy, owns a number of the major agency brands in the country.
Sydney-based listed agency McGrath Estate Agents has flagged that it may also pursue this model in Melbourne, as established brands are highly regarded.
Elsewhere, property investment tool Real Estate Investar, which has the joint backing of Domain’s Anthony Catalano and former REA Group chief executive Simon Baker, yesterday floated on the ASX.
The company, which runs a website to facilitate property investment, yesterday joined the listed space after raising $5m through underwriter Baillieu Holst. The shares finished slightly below the 20c issue price last night, at 19.5c per share.
The chairman of the company is Mr Baker, while Clint Greaves is the chief executive.
REI Group owns and operates the websites in Australia and New Zealand. “We are delighted to list the company on the ASX after receiving such strong demand for our IPO. This is testament to the continued growth and success of our business,” Mr Baker said.
“We believe an ASX listing will provide the foundation for the next phase of our expansion and ultimately help us achieve our longer-term growth ambitions,” he added.
This article first appeared in The Australian Business Review.