US real estate franchise Coldwell Banker has had a presence in Singapore since 2000, but it has been dormant for the past eight years. The company that held the franchise in Singapore, Hersing Corp, sold the franchise together with Asia-Pacific brokerage firm ERA Real Estate for over $100 million in 2013. The buyer is Singapore-based private equity firm Northstar Group.
While ERA has grown to become the biggest real estate agency in Singapore with 6,375 agents and over 40% market share in terms of new project launches, Coldwell Banker has remained dormant since 2008 until now. “We have to revive and grow the Coldwell Banker brand within the next five years,” says Jack Chua, CEO of ERA and Coldwell Banker. Coldwell Banker and ERA, along with Century 21 and Sotheby’s International Realty, are owned by New York Stock Exchange-listed real estate services company Realogy. In Singapore, Coldwell Banker and ERA are under Northstar.
Chua (left) and Goh
With eight consecutive rounds of property cooling measures culminating in the total debt servicing ratio loan framework in June 2013, residential transaction volume has halved to between 7,000 and 7,500 units over the last two years. Likewise, the number of new agents fell to 1,299 last year — less than half the 3,006 new entrants in 2014, according to the Council for Estate Agencies.
There has been a wave of consolidation in the real estate industry, with franchises changing hands. In Singapore, Century 21 is owned by Asia-Pacific Strategic Investments, a former Malaysian bereavement services company that transformed itself into a real estate services firm last year. APSI acquired Century 21 Hong Kong and Asia-Pacific, which includes the Singapore franchise, followed by Global Alliance Property in Singapore in 2015.
Sotheby’s debuted in Singapore in 2007, when it was brought in by a group of high-net-worth investors. However, it subsequently closed. The luxury brand returned to Singapore in March this year. This time, it is operated by List Holdings Singapore, the entity that also operates List Sotheby’s International Realty in Japan and Honolulu, Hawaii. The Singapore business is headed by Hisashi Kitami, owner and CEO of List Sotheby’s.
There is an urgency to grow the Coldwell Banker franchise in Singapore, concedes Chua. When Coldwell Banker first started in Singapore 16 years ago, it operated as a division of ERA. The real estate services offered by both entities were similar. “People started asking why we have ERA and Coldwell Banker. It was like we were cannibalising our own business,” he says. That led to the decision to combine the two under ERA eight years ago.
This time around, Chua is taking a different tack to grow Coldwell Banker as a separate entity. He is using the franchise model, which is similar to that of Century 21. Chua is making an effort to target small- and medium- sized real estate agencies to bring them under the umbrella brand of Coldwell Banker. At the same time, the individual companies can keep their respective brands, he says.
For example, the first company to sign up as a franchisee was Elitehill Real Estate. That was in January. By February, its owner Martin Goh had convinced three more agencies to sign up. So far, there are 11 Coldwell Banker franchisees with a salesforce of 80. The agencies range from sole entrepreneurs to firms with 30 salespersons. Another handful of agencies are coming on board, says Goh.
Goh has become more than just a poster child for Coldwell Banker. He was appointed general manager of Coldwell Banker in Singapore and will oversee the expansion of the franchise. However, he will continue to manage his firm, now renamed Coldwell Banker Elitehill Real Estate.
“The main attraction for most small- and medium-sized agencies is that they will become part of an international brand and will be able to tap both local deals from ERA and overseas deals from other Coldwell Banker franchisees around the world,” says Goh. “They will also be able to leverage ERA’s training programmes for their salespersons and technology platforms that small firms are unable to provide.”
Coldwell Banker will have its own corporate office within the 7,000 sq ft space at SLF Building. There will be meeting rooms and desks for agents to use, like a co-working space.
According to Chua, the target is to have at least 20 franchisees in Singapore by the end of the year. To attract new franchisees, the fee has also been kept at an attractive level. “It’s in the range of $1,500 to $3,000 for three years,” he says.
This article appeared in The Edge Property pullout, Issue 742 (Aug 22, 2016) of The Edge Singapore.
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