THE PROPERTY DEVELOPMENT REVIEW
Following shareholder and regulatory approvals, the Scheme of Arrangement became legally effective on June 17, with the quotation of McGrath Shares on the ASX suspended on the following day. On June 27, the scheme of arrangement was implemented, with the settlement of the acquisition now effected. McGrath’s new board of directors will comprise McGrath founder and CEO John McGrath, Knight Frank Australia CEO James Patterson, Knight Frank Global Head of Residential Rupert Dawes, Bayleys Managing Director Mike Bayley and Bayleys Finance Director Ken MacRae. John McGrath will continue at McGrath as Chief Executive and Managing Director and will retain his 23.3% shareholding in the company. John McGrath commented on the merger, saying, “We are delighted to be joining forces with two of the greatest real estate brands in the world. Knight Frank is the most prestigious residential agency globally, providing us and our customers instant access to the best global network and the most sophisticated international buyers in the world.” “Our goal is to build Australia’s leading and finest real estate brand over the next few years and this new partnership and network puts us in a strong position to do just that.” Knight Frank and New Zealand-based Bayleys, both privately owned, have had a strategic relationship since 2018. The firms’ acquisition of McGrath has seen the residential real estate network return to private ownership after being listed on the ASX since 2015. For Knight Frank, the McGrath acquisition demonstrates the firm’s commitment to Australia, with the country further consolidating its position as Knight Frank’s largest presence outside the UK. In fact, the partnership elevates Australia and New Zealand to one of the largest regions within Knight Frank’s global network, with the number of offices in its Australian network now surpassing its UK business. Together, Knight Frank and McGrath have 171 offices across Australia. Meanwhile, Knight Frank, Bayleys and McGrath combined have a footprint of 276 offices across Australia, New Zealand and the Pacific Islands. Knight Frank is the largest privately owned real estate agency in the world, with more than 740 offices globally, in over 50 markets, with more than 25,000 people. This includes strategic relationships with Douglas Elliman, Berkadia and Cresa in the US, SMTB in Japan, as well as Bayleys in New Zealand. Knight Frank Australia Chief Executive Officer, James Patterson, said, “This acquisition represents another significant milestone in Knight Frank’s international expansion journey, allowing us to consolidate the business’ residential footprint globally, whilst leveraging our expertise and extensive reach to create enormous opportunity for McGrath and their customers. Bayleys started 50 years ago in the basement of the family home in an average suburb of Auckland. Today, the business spans 105 offices throughout New Zealand and the Pacific Islands, employing over 2,300 personnel, completing 14,000 transactions and settling in excess of $15 billion in property annually. The growth and success of Bayleys have been underpinned by its family values and ability to innovate and diversify, not only across geographies but across service lines – in New Zealand, Bayleys commands 48% of the commercial market nationally, 38% of the farm sales market and 16% of the national residential market, which increases to 34% market share in the $3 million-plus bracket. Bayleys are significant players in residential and commercial property management, valuations and mortgage broking. Bayleys Managing Director, Mike Bayley, said Bayleys was hugely excited about the opportunity to support the growth and diversity of McGrath: “Bayleys views the partnership with McGrath and Knight Frank as a collaboration of leading real estate companies servicing markets on both sides of the Tasman whilst providing unprecedented global reach.
July / August 2024 – 11
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