PropNex expands into auction, management

Source : Business Times - 1 Aug 2008

It’ll focus on private homes, commercial realty for auction

REAL estate firm PropNex is adding auction and management consultancy services to its repertoire in a bid to diversify its revenue stream, it said yesterday.

PropNex’s auction division, set up three months ago, will conduct its first auction in September. The firm will focus on private homes and commercial properties, said PropNex chief executive Mohamed Ismail.

And to provide a comprehensive suite of real estate services to its clients, PropNex will begin providing management services.

The firm bought Oracle Property Consultants Pte Ltd two months ago and set up its own unit to address the growing demand for professional property management services. Some properties in PropNex’s portfolio include The Ladyhill and 1 Moulmein Rise.

The firm currently earns more than 80 per cent of its income from brokering residential sales. According to Mr Ismail, PropNex has 38 per cent market share in the public housing market, as well as 33 per cent of the private home secondary market.

The other 20 per cent of the revenue comes from the firm’s commercial, investments and project marketing divisions.

But in three years’ time, Mr Ismail hopes that brokering residential deals will account for just 50 per cent of revenue as the firm grows its other business segments, including the new auction and management divisions.

PropNex saw its revenue grow to $28 million in Q2 2008, from $24 million a year ago. For the whole of 2007, revenue came to $108 million, up from $60 million in 2006.

The firm made news recently when it announced that it was firing about 2,800 agents who have been with the firm for over a year, but did not record a single transaction.

The move, said Mr Ismail, was part of PropNex’s attempts to clean up a largely unregulated industry.

Yesterday, PropNex also unveiled several other new initiatives to boost self-regulation.

Among other measures, all PropNex agents will now have to sign up for compulsory professional indemnity insurance and new agents will have to take a proficiency test.