Major rural real estate deal
The country’s largest farmerowned co-operative, Farmlands, has sold its real estate business to Property Brokers with aspirations to build on its combined 20 per cent of the rural property market.
‘‘Property Brokers now owns and manages the day-to-day real estate business created from the agreement,’’ the two companies said in a statement after settlement was confirmed on Thursday. The price paid is not being revealed.
‘‘Farmlands Co-operative will continue to support real estate through its extensive network, events, customer loyalty programme and shareholder discounts.’’
Farmlands said through the long-term strategic partnership it would retain its investment in real estate and would receive a commission on future sales.
Its farmer-grower shareholders would still receive special real estate offers as part of their cooperative ownership, including a discount on commission and Choices Rewards Points.
Farmlands chief executive Peter Reidie said the co-operative had partnered with a nationwide brand that had a proven track record in the highly specialised service.
In partnership they could grow the business on a scale they could not achieve on their own, Reidie said.
Property Brokers would end up with 700 staff in 64 locations from Kaita¯ia to Invercargill. Property Brokers’ network presently consisted of 45 branches and more than 650 staff.
In April 2017, Property Brokers Manawatu¯ was fined $1.45 million for price fixing and its sole director Tim Mordaunt was fined $50,000.
A High Court judge called Property Brokers Manawatu¯ the ‘‘ringleader’’ in which about 13 regionwide agencies agreed to pass on the costs of higher Trade Me adverting fees to clients.
LJ Hooker’s Palmerston North branch and Unique Realty of Palmerston North were fined $1.25m and the commission took action also against others.
Farmlands director of agriproducts and services, Andrew Horsbrugh, said he could not comment on Property Brokers Manawatu¯ fine in 2017.
He said Farmlands’ decision to partner was based on Property Brokers’ current management team, their systems and processes.
Farmlands considered Property Brokers’ service was ‘‘second to none’’ in rural real estate.
Last year, Farmlands had added nine offices to the real estate business.
It had about 70 real estate agents in total who were being offered contracts with Property Brokers. The response was positive, he said.
Farmlands had realised that the sale of the real estate business and the 15-year strategic partnership with right of renewal with Property Brokers would provide a lot more value than growing organically over several years.
It was the way for Farmlands to achieve a national footprint, Horsbrugh said.
The sale of Farmlands West Coast real estate business requires Commerce Commission clearance.
Horsbrugh said Farmlands would continue to run that while awaiting that decision.
Property Brokers general manager Conrad Wilkshire said Farmlands had a highly-regarded brand, strong network and expert knowledge of the rural sector.
Property Brokers’ focus was solely on real estate and understood provincial property well.
Mordaunt said the partnership would give the pair 20 per cent of the rural property market. ‘‘Together we aspire to grow our market share considerably,’’ Mordaunt said.
Their main competitors are Bayleys and PGG Wrightson.