The founder of London estate agency Foxtons has shown his true feelings for his old agency by appointing rival agent Strutt & Parker to sell his newly listed £50 million development on London’s Albert Embankment.
It’s a veritable slap in the face for Foxtons, as they battle a stagnant London market and a miserable share price which is currently trading at an all-time low.
So why did Hunt reject Foxtons, the company he built from scratch?
Hunt founded the firm in 1981 in a then unfashionable Notting Hill, selling the business to private equity group BC Partners for a cool £375million in 2007, just weeks before the global recession hit.
To attract customers and much need press attention, Foxtons sold properties in its first three months in operation without charging any commission, “in our first year we banked £13,000 and (the business) cost us £46,000 to run, so we were pretty close to bust” Hunt revealed in a rare interview with Business Life in 2012.
Since selling the high street agency, the property mogul has been making extremely successful moves in both commercial and residential property investments in the Capital. He founded his current property investment and development firm Ocubis whilst managing Foxtons in 1995.
Originally a luxury service office business, Ocubis has evolved into a huge business, owning large swathes of London residential property alongside developing residential, commercial and retail real estate.
The plot Hunt is looking to sell is in based in London’s Vauxhall, with planning permission approved for 166 apartments in two 25-storey towers in addition to office and commercial units, but it’s not the first time he has snubbed Foxtons in favour of Strutt & Parker.
Ocubis recently refurbished 5 St. James Square in Mayfair, agreeing to let around 4,000 sqr ft to Canadian Billionaire Lawrence Stroll, using Strutt & Parker on the deal.
DealMakerz contacted Ocubis to provide a reason for their Foxtons-phobia, but they declined to comment. Has Jon Hunt got a vendetta against Foxtons management? Does he feel like the company has gone off the rails since his departure?
The most obvious reason why Hunt keeps on snubbing his old firm is directly related to recent M&A property activity.
In July this year BNP Paribas Real Estate agreed a deal to buy Strutt & Parker for an undisclosed amount, bringing together 1,500 staff across both residential and commercial. As with most buyouts, the idea is to leverage synergies of two business, which in some cases can provide a discount to end users or clients.
We suspect this is exactly why Hunt keeps ignoring Foxtons.
Ocubis are most probably advised or receive financing from BNP Paribas. To provide a full end-to-end service to customers BNP may be offering Hunt a discounted rate if they use Strutt & Parker as their agent.
On the face of it, Hunt seems to be rejecting Foxtons simply to save money on multi-million pound development deals. A sadder and more serious conclusion is that one of London’s foremost property mogul’s has lost faith in the company he spent 25 years building – we’ll let you decide.
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