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Two of Australia’s largest real estate networks met with their franchise owners today to discuss a strategic partnership between the two groups.
Executives from LJ Hooker and Barry Plant outlined the benefits such a deal would deliver to franchise owners, their agents and their customers. While over the longer term, the relationship between the two groups may evolve, a strategic partnership is seen as a first step in determining and implementing the potential benefits.
Collectively LJ Hooker and the Barry Plant group would account for 8.8 per cent national market share (sales volume) throughout Australia.
In the 12 months to November 2015, the two networks collectively sold $28.6 billion in real estate. They would be Australia’s largest property managers with a combined portfolio of more than 180,000 properties under management valued at $102.3 billion, equating to a market share of 13.8 per cent.
LJ Hooker and Barry Plant franchise owners at the meeting discussed the ability to continue operating as distinct brands while being able to enjoy competitive advantages resulting from the partnership. Such benefits would include collective buying power, cost efficiencies, business support services and cutting-edge technology, as well as training for franchise owners and their staff.
LJ Hooker CEO Grant Harrod and Barry Plant CEO Mike McCarthy told those assembled that the networks would complement each other as market leaders.
“Throughout Victoria, Barry Plant is the market leader and, most importantly, shares the same values as LJ Hooker – putting the customer at the centre of everything they do,” Mr Harrod said.
“Victoria is a significant market for us in terms of potential for growth.
“We anticipate that the partnership with Barry Plant would see LJ Hooker continue to grow its market share in the state, as was the case with LJ Hooker and New Zealand network Harveys in late 2010. LJ Hooker’s market share alone grew from six per cent to nine per cent as the offices enjoyed a healthy rivalry.
“We are two of the most respected, recognised brands in real estate, and by partnering together we would create an even brighter future for our people and our customers,” Mr Harrod said.
Mr McCarthy said the partnership presented a unique opportunity to grow the Barry Plant brand.
“We’ve discussed opportunities with other parties in the past, but this is the structure and vision which we’re confident will succeed,’’ he said.
“LJ Hooker pioneered franchising in real estate and by partnering with them we would benefit from a strong platform with increased resources to take our dominant Victorian brand to the rest of Australia.
“Our franchise owners are looking forward to the opportunities and benefits that the strategic partnership will deliver,” concluded Mr McCarthy.
More to come.
[Related: Major real estate group continues expansion]
- <p>And despite a BA can't even spell..*is there a....</p>0
- <p>PS Is it just me or is their a rather embarassing dearth of diversity in this happy smiling cis white guy (mostly of a certain age) management group? How a modern business expects to prosper into the future when it's management in no way reflects the diversity of its customers, let aone it's staff, in age, cultural heritage or gender is beyond me..and I don't have a degree from Harvard Business School. Just sayin'</p>0
- <p>Obviously the disappointing results from the McGrath IPO mean that LJH are deciding to look for ways to shore up their aging, un-agile and distinctly unprofitable "business in a 1980's box" model...If LJH was still a goose laying golden eggs they wouldn't be sharing their bounty with any Barry come lately....LJ Junior Junior wouldn't be looking to share his grandfather's legacy with anyone if it was still an industry leader.</p><p>"Pioneering franchise" read "almost 50 year old business model that is harder to turn than the Titanic" Internal change is too hard so we need to find an external catalysts we can coerce our long time rusted on franchise owners with....let's merge!</p><p>So LJH HO is going to enjoy cost savings, BP HO is going to enjoy access to the rest of Australia..(Hands up all those single office franchise owners in Mum and Dad suburbs that CAN'T WAIT to have a you beaut Barry Plant office open up next door!! Anyone? Bueller? Anyone??), but I digress...</p><p>So LJH business owners improve their profits but agents still have to compete on the ground, against each other and that's a GREAT thing for all you agents ( whose average income is a whopping $58K according to the ABS) Right? Because having new competition with the same offering is definitely "healthy" and no way will it result in a race to the bottom on fee price..No way will we see agents under more pressure to take "shortcuts" and bypass good practice to win more listings or move more stock to make up for the fee cutting...( see comment about flagship office/fraud/no good at actually making profit just looked like they were) No way. Won't happen.</p><p>But that's ok for the business owners, more turnover will make up for less profit ... and Franchise HQ will be just fine taking a small clip of ALOT more tickets, so I can see why they would be keen to do the deal...</p><p>But how exactly is this good news for the 1000's of AGENTS in these two networks??? Maybe I missed the paragraph that explains that LJH/BP management plan to parlay these cost efficiencies into: higher commission splits for their agents; investing in better training and mentoring for their most important asset (their PEOPLE); attracting and retaining the best talent in the industry; improving their "trusted industry" status from one above used car salesman and one below politician to something closer to Firemen and Nurses ? Yeah I must have missed that bit....</p>0
- <p>Behind all the posturing, I can't help thinking about the LJHooker flagship "Best Team of the year 2015."<br>A poor choice as flagship office. Shut down for trust account fraud, as reported on this site. Oops!<br>The victims of LJHooker's Best team won't have much respect for the brand. Surprised to see this strategic alliance happening in Victoria of all places.</p>0
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