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In an increasingly connected world, there are plenty of benefits that come with a boost to size and scale, according to John McGrath.
In conversation with REB following the ASX announcement that Knight Frank and Bayleys had entered a Scheme Implementation Deed with McGrath, the CEO and founder of McGrath Estate Agents reflected on the benefits of connecting in with international partners.
Acknowledging globalisation as very much a continuing trend, McGrath is of the belief that “businesses, brands or groups that have connections in other parts of the world, will be benefited greatly by that”.
Suggesting scale is going to be very important in the future, the CEO acknowledges margin compression is “everywhere”.
“The ability to scale your business to a high level will be important.”
“We’ve seen what’s happened in the legal world and the accounting world, that a lot of the firms that are international and better organised and with scale globally have started to win a larger market share.”
“I think real estate, while it is very local, I think it’ll benefit from a global network.”
While Knight Frank and Bayleys’ path to ownership of McGrath Estate Agents will be subject to a range of conditions, the CEO said that if it does go ahead, the business will “get all the benefits that we enjoy today being part of McGrath, and we get a whole host of additional benefits of being part of Bayleys and Knight Frank networks”.
“It really does give us access to ideas, relationships that didn’t exist before now,” he shared.
“No doubt there’ll be a great exchange of ideas between the various brands, what’s happening in different parts of the world, and we’ll be able to incorporate all that IP into our business going forward,” McGrath remarked.
“And if you look at Knight Frank, I think it’d be hard to argue [against the notion] that they would have the best black book of high-net-worth individuals around the world, when you look at where they operate and the sort of properties they represent.”
“We think that’s important,” McGrath continued, before raising their strength in Asia – a fact that is not lost on him given the region’s status as becoming a “more and more important part of the Australian economy”.
But even with the benefits that come from increased eyeballs and partnerships, McGrath acknowledges that size doesn’t necessarily equal service.
“Real estate is a relationship people game,” he stressed.
“And even though the internet can post a property and have it seen around the world, I think that relationships, deep relationships, are invaluable. “
Read more about the potential alignment between McGrath, Knight Frank and Bayleys here.
ABOUT THE AUTHOR
Grace Ormsby
Grace is a journalist across Momentum property and investment brands. Grace joined Momentum Media in 2018, bringing with her a Bachelor of Laws and a Bachelor of Communication (Journalism) from the University of Newcastle. She’s passionate about delivering easy to digest information and content relevant to her key audiences and stakeholders.
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