ZPG, owner of Zoopla and PrimeLocation, claimed this week that the number of estate agency branches that left to join OnTheMarket (OTM) in 2015 but have subsequently abandoned OTM to re-join ZPG has now reached over 1,000
Recent wins for the portal giant include a Martin & Co branch, 6 Hurford Salvi Carr branches in London and 5 Andrew Milsom branches covering the Thames Valley and Chiltern Hills.
In addition, the firm has also recently signed long term listing agreements with the UK’s two largest agency groups, Countrywide and Connells.
Mark Goddard, MD of ZPG Property Services was frank in his analysis of the recent wins, “we are continuing to see agencies from around the country re-joining ZPG on a weekly basis as agents increasingly understand that they are at a competitive disadvantage when not partnering with us.”
This follows the somewhat bizarre news earlier in the year that OTM is seeking a London IPO, valuing itself at a huge £200-250 million.
One of the conditions of OTM’s float is that it drops it’s key differentiators – the ‘one other portal’ rule, which forced agents to chose a maximum of 2 out of the 3 notable portals in a direct play at ZPG’s core business.
The IPO announcement was initially met with confusion, then dismay by senior figures in the industry.
Portal grandee Mike DelPrete commented, “I’ll cut right to the chase: OnTheMarket, the online property portal challenging Rightmove and Zoopla, does not offer more value to consumers compared to the existing alternatives. It serves no purpose and investing in such a business would be a horrible idea.”
We would tend to agree: little to no growth on the new portal combined with an apparent agent exodus places further strain on an already punchy multi-million pound valuation. Add to this the covenant stating their only real differentiator is being dropped and it paints a very confusing picture.
DealMakerz only really has one question – who is benefitting from the OnTheMarket floatation?
At this stage, it appears to be a straight-forward shareholder pocket-lining exercise.
Who will be prepared to invest in such a asset however, is an entirely different question.