APAC Realty

APAC Realty changing hands again. The sale price is ~20% and 30% below last 12 months and last traded price. I reckon OPMI may not be so happy moving forward.

Morgan Stanley Private Equity to Partner with the Management and Become the Majority Shareholder of APAC Realty

NHPEA Ace Realty Company Limited (“Offeror”), a wholly-owned subsidiary of a private equity fund managed by Morgan Stanley Private Equity Asia (“MSPEA”), today announced that it has agreed to acquire 59.8% of the total outstanding shares of SGX-listed APAC Realty Limited (“APAC Realty”), a leading real estate services company in Asia, for a total consideration of approximately S$129.5 million

Details of the Offer include:
• The Offer Price is S$0.57 per share in cash1.
• The Offer is unconditional.

Sale of majority stake: https://links.sgx.com/FileOpen/Offeror%2...eID=713708
Mandatory GO: https://links.sgx.com/FileOpen/Offer%20A...eID=713707

(25-04-2022, 08:29 PM)weijian Wrote: APAC Realty changing hands again. The sale price is ~20% and 30% below last 12 months and last traded price. I reckon OPMI may not be so happy moving forward.

Morgan Stanley Private Equity to Partner with the Management and Become the Majority Shareholder of APAC Realty

NHPEA Ace Realty Company Limited (“Offeror”), a wholly-owned subsidiary of a private equity fund managed by Morgan Stanley Private Equity Asia (“MSPEA”), today announced that it has agreed to acquire 59.8% of the total outstanding shares of SGX-listed APAC Realty Limited (“APAC Realty”), a leading real estate services company in Asia, for a total consideration of approximately S$129.5 million

Details of the Offer include:
• The Offer Price is S$0.57 per share in cash1.
• The Offer is unconditional.

Sale of majority stake: https://links.sgx.com/FileOpen/Offeror%2...eID=713708
Mandatory GO: https://links.sgx.com/FileOpen/Offer%20A...eID=713707

It's strange that North Star sold its stake at deep discount as against the market price.

(26-04-2022, 10:59 PM)Shiyi Wrote:

(25-04-2022, 08:29 PM)weijian Wrote: APAC Realty changing hands again. The sale price is ~20% and 30% below last 12 months and last traded price. I reckon OPMI may not be so happy moving forward.

Morgan Stanley Private Equity to Partner with the Management and Become the Majority Shareholder of APAC Realty

NHPEA Ace Realty Company Limited (“Offeror”), a wholly-owned subsidiary of a private equity fund managed by Morgan Stanley Private Equity Asia (“MSPEA”), today announced that it has agreed to acquire 59.8% of the total outstanding shares of SGX-listed APAC Realty Limited (“APAC Realty”), a leading real estate services company in Asia, for a total consideration of approximately S$129.5 million

Details of the Offer include:
• The Offer Price is S$0.57 per share in cash1.
• The Offer is unconditional.

Sale of majority stake: https://links.sgx.com/FileOpen/Offeror%2...eID=713708
Mandatory GO: https://links.sgx.com/FileOpen/Offer%20A...eID=713707

It's strange that North Star sold its stake at deep discount as against the market price.

Maybe kena margin call from Morgan Stanley =)

In comparison, Hersing did a better job and gave investors better returns (excluding dividends, purely from share price standpoint). Hersing was in my watch list and APAC is not. If I am not wrong Hersing did dilute itself with bonus shares a few times while APAC did not. ERA is a decent franchise thus far, a cash cow, low capex, a durable demand, not sure why it is passed around at low valuations. Maybe some of you have much better insights to why this is so.

As consumers become more tech savvy, the role of the middle man(in this case, property agents) become more dispensible / less lucrative. But it may take more time for the industry to transform itself/or disrupted than say stock broking.

The industry can be disrupted anytime in Singapore. If property owners want to transact HDB deals on their own, they can pay $2000 to do it on HDB portal, bypassing property agents. What the agents value adds to you is marketing your home or negotiating.

However, should buyer and seller be able to aggregate and nego on a single platform, think propertyguru equivalent or carousell, it will eliminate the 2-3% commissions (approximately $20,000 savings). HDB did consider automating the transaction process as it has the software deployed and system resiliency to take on the volume; however, some mysterious force is stopping it from going large scale but continue running it quietly without marketing, unlike CPF mechanisms. In the private market, SLA has similarly created an automated deed registration where buying/selling can be automated as well.

All it takes is some platform to open itself to allow individuals to buy/sell; schedule appointments like MS Team/Skype and you already have a disruptor in place for the entire agency business

It looks like it can be easily disrupted but it isn't so, why is it?

Do property agents actually value add? ie. they have a higher probability of obtaining the best selling price for the seller? Or they actually provide decent advice for an undecided buyer.

Do property agents address a pain point? ie. who cares about a 1% (or 4 figure sum) if one is making a transaction that is almost 100x that? That is how car sellers up-sell features - car buyers are much willing to pay an additional 5k for built in GPS/reverse camera and better looking leather seats when the car is already selling for a 6 figure sum.

And yes, of course we can kick out the middle man with platforms! But don't we have the cold start problem? Where is the demand when there is no supply to start with? And then we log onto propertyguru.com and what do we see? Listings made by people with nice photos...alright, agents!

Theory and reality can be really different sometimes.

With technology, with increased productivity, with more agents in the market the reality is that commissions will start coming down gradually