The value of the acquisition is undisclosed but the deal is a cash-based transaction.
The full asset purchase means Ensign will be absorbed by PropertyGuru.
“We are trying to make [buying property] more transparent and easy, and content plays a very important role in that,” said PropertyGuru Co-founder and CEO Steve Melhuish, during a press event.
“We are creating a platform that helps consumers make decisions which drives sales and feeds back to advertisers,” he added.
PropertyGuru already has a vibrant and developed media platform spanning online, mobile, events, television (in Indonesia through a partnership with Emtek) and publications. Melhuish said the company has hired around 30 people in the last nine months just to produce content.
To elaborate, under ‘news’ on the website, PropertyGuru updates content with around four to five market-related articles per day.
The company says today’s acquisition is a means to strengthen its media capabilities.
For Property Report and Asia Property Awards, the advantage of the move is to leverage PropertyGuru’s reach to build the brand. Ensign Co-founder Terry Blackburn told e27 Asia Property Awards are already the “largest real estate awards event in Asia” but it should see additional growth via PropertyGuru.
“The timing was right. I achieved what I wanted to in terms of the awards, so it is nice to have a larger partner,” Blackburn said.
Addressing concerns of editorial autonomy
One question both brought up by the journalists in the room as well as stressed by Melhuish is whether the acquisition puts the integrity of the magazine and awards event in jeopardy.
The logic behind the question is the company may have to battle the perception that content or award winners could be manipulated to benefit PropertyGuru.
While Melhuish admitted educating the industry about the new product may present a challenge, he stressed there will be no buy-in entries and the publications will have an independent, neutral view.
“[For clients] it adds reach. The property awards piece supports credibility [of the developer] and we are able to offers stronger one-stop-shop capabilities,” said Melhuish.
Unsurprisingly, after landing a S$175 million (US$121.8 million) investment in July, PropertyGuru is fully funded moving forward and is not pursuing any additional investment.
Also, for the time being, it has found the four markets — Indonesia, Malaysia, Singapore and Thailand — that will be the focus of the company moving forward.
“Our focus is on depth; strengthening the existing markets,” Melhuish told e27.
But he did explain that the business model does not restrict itself to the markets. For example, a consumer survey from the company found people living in Asia are evermore enthusiastic about investing in property abroad.
“We develop partnerships and may help facilitate things like [a] Hong Kong [person] buying a home in Bangkok,” he stated.
One trend from 2015 that is expected to continue in 2016 is the cooling trend of Singapore’s property market. PropertyGuru is noticing a decrease in transactions but the overall environment may actually help the company generate revenue.
“As budgets tighten, a big chunk of advertisers move online,” said Melhuish. He added that the company grew nicely, overall traffic rose and more leads were generated on the portal.
A history of M&A
The Ensign acquisitions follows a long and consistent history of acquisitions for PropertyGuru. But when asked about the strategy, Mulhuish distinguished between the early-stage buys — like that of Indonesia’s Rumah.com in 2011 and Thailand’s DDProperty the same year — as compared to the recent acquisitions.
During the early days, as PropertyGuru was researching potential markets for operation, it found companies like DDProperty and Rumah.com which, while small, had begun to gain traction. Melhuish explained, it would have been difficult to enter the four markets starting from scratch, making M&A an attractive strategy.
By comparison, today the moves are about maintaining its position as the market leader as companies such as 99.co and iProperty vie for a share of the real estate portal market.
“How do we strengthen our business? Are there gaps in the business?” said Melhuish.
These are important considerations because having the majority market share gives the company brand preference, makes it easier to monetise and helps build stronger margins.
“So, as the long-term market matures, we want to be in that position,” he said.
At the moment, PropertyGuru is in fact the leading company in the sector; however Melhuish believes to maintain the polling position, his company needs to remain dynamic.