Bayleys marks 50 years of real estate success
Graham Bayley was 50 years old when he established Bayleys Real Estate in 1973 with his wife Pam and son John.
Fifty years on that tiny business has grown into one of New Zealand’s most recognised real estate brands, having expanded from just three staff working from their Pakuranga family home to more than 2000 people in over 100 offices across the country with a presence also in Fiji.
Bayley had spent nearly three decades of his working life as a farmer before starting a new career in the late 1960s as a rural real estate agent with Hamilton firm Matthews & Hyde, where he was joined by John, then in his early
20s.
They decided to establish their own real estate company in fast-growing South Auckland in September 1973, persuading some Waikato developer clients to head north to undertake housing subdivisions that Bayleys would sell for them.
In 1974 Graham and Pam’s second son David joined the business, which was then perating out of a new office building in Papatoetoe.
There was also a big early focus on the fastgrowing commercial and industrial market, particularly in East Tamaki where swathes of former farmland had been rezoned industrial. Working with landowners to progressively sell down their holdings and open them up for development, Bayleys was largely responsible for East Tamaki’s rapid business growth in the
1980s.
A “city” office was opened in Symonds St in the early 1980s, with CBD leasing and sales activity booming off the back of radical deregulation of the economy and financial markets by a new Labour Government in 1984.
Typical of the market’s increasing overexuberance was Bayleys’ first big auction sale in
1986 of a 3293sq m development site at 23-29 Albert St. The vendor’s price expectations were around $16 million so they were delighted to accept a $25 million pre-auction offer.
The long property slump that followed the
1987 stock market crash forced the Bayleys to rethink the way they operated. John and David were now the company’s sole shareholders, although Graham continued to play an important role as executive chairman until his death in
1995.
“I’d spent the first 15 years in the game putting things around the wrong way — we were effectively taxi drivers working for buyers,” John says. “We’d mostly just sign a buyer up and hope like hell the deal would stick.
“It was a terrible business model that would no longer work in a market where the banks and receivers were taking control and wanted to know that we were working for them. We were the first agency to change the focus from buyers to actively marketing property for vendors and as a result, sellers were coming to us.”
Buyers, however, were still important and there were no longer enough of them in New Zealand for the increasing volumes of listings coming under Bayleys’ control so overseasbased investors became a big focus.
“It all really started with John and I heading to Hong Kong in the late 80s and then Singapore with briefcases full of property listings,” David says. “We knocked on many doors. It was challenging, pioneering work. We focused on building relationships initially which eventually led to sales.”
A Bayleys Asia office was established in Hong Kong and James Chan was employed as an interpreter in 1989. He would go on to establish a successful 30-plus years sales career with Bayleys in New Zealand, dealing predominantly with offshore and local Asian buyers.
Hong Kong-based Hind Group, owned by the Jhunjhunwala family, was one of Bayleys Asia’s earliest big clients acquiring more than $100 million worth of Auckland properties, starting with the partially developed Central Park office complex in Penrose, purchased for $38 million in 1992.
Other transformational initiatives included:
■ The introduction of commercial and industrial property portfolios, which started in 1990 with the auctioning of Brierley Investments and AMP portfolios followed by 50 Fletcher Challenge properties, 80 per cent of which sold.
■ Three consecutive days of auctions in December 1992, resulted in 64 State Insurance and TAB-owned properties being sold, along with 26 other individually owned properties.
■ A single portfolio brand name, Total Property, was introduced in 1999, with over 11,000 properties subsequently marketed across 130 issues generating billions of dollars of sales.
■ The creation of a project marketing division in the early 90s, initially to address a 30 per cent vacancy rate in Auckland CBD office buildings by converting some to apartments. This quicky developed into a billion-dollar sales business involving the sell-down of large-scale projects encompassing thousands of residential and hotel apartments, then terrace housing developments and master-planned residential and commercial and industrial subdivisions.
■ The establishment of a syndications division offering smaller investors shared ownership of institutional-grade assets they could not otherwise afford. In the last 20 years, the division (headed by Mike Houlker and Samara Phillips) has managed the marketing and successful selldown of around 70 syndications and property funds, raising over $1.3 billion of capital from investors.
■ In 2014 Bayleys entered into a partnership with Augusta Funds Management (now Centuria NZ) to market their offerings, with Bayleys Property Services providing property and facilities management services.
■ Expansion of Bayleys’ national network, mostly using the franchise business model. In early 1991 Bayleys had just one office in Auckland’s CBD employing just over 100 people. By 2003 there were 42 offices with approximately 850 staff, as Bayleys’ commercial, residential and then rural agency reach expanded across New Zealand.
Bayleys entered the new millennium with a much broader full-service business base, encompassing all three major agency sectors as well as growing property and facilities management and valuation divisions.
“This placed Bayleys in a much stronger position to not only make the most of the upturns that have subsequently occurred but also major downturns in 2008-09 resulting from the Global Financial Crisis and more recently in 2022-23,” said Mike Bayley, Graham and Pam’s grandson who became managing director in 2007. “In the four years that followed the GFC, we doubled the size of the business and there’s an opportunity for us to do the same in the next four or five years.”
In 2019, Bayleys expanded its global footprint through a partnership with Knight Frank and the acquisition of Knight Frank’s New Zealand business. Recent acquisitions have focused on non-agency business including building consultancy and debt advisory services.