The chief executive of an award-winning real estate group has warned that McGrath’s recent poor performance on the ASX could be reflective of wider problems faced by the industry, and questioned the motives of those who have been “spiteful” towards the group.
Starr Partners CEO Douglas Driscoll told REB that since McGrath’s share price fell by 25 per cent following its ASX listing in December last year, the firm has been subject to negativity from the real estate industry and the media alike.
Mr Driscoll said he believes the pessimism is uncalled for, highlighting that agents need to look at the bigger picture and consider McGrath’s situation as a potential indication of the entire industry.
“McGrath are a highly reputable and successful organisation that are, generally speaking, well regarded by the markets they serve,” he said.
“Whether its schadenfreude or tall poppy syndrome, call it what you want, I think the rhetoric is unwarranted.
“I understand that people are entitled to their own opinions, but they need to recognise that McGrath’s current situation could be construed as an indirect reflection of our industry and serve as a partial microcosm. If people aren’t prepared to invest in them, does this potentially mean that there is a lack of confidence in our profession? And what does this mean for the rest of us?”
Mr Driscoll said that while McGrath is direct competition, its success is an important factor to consider when predicting where the real estate industry is headed.
“Starr Partners directly compete with McGrath across 15 different territories but, rather than adopt a spiteful attitude, I maintain a broader perspective and wish them well, as their financial market performance is a potential barometer of the confidence in the future of our industry,” he said.
“Sometimes we need to stop being so myopic and take a helicopter view on these matters.”
Mr Driscoll added, “There is a conjecture suggesting that the numbers and forecasts in the prospectus were inaccurate, but bear in mind that considerable independent due diligence is undertaken before a company can float.”
Mr Driscoll’s comments come after McGrath CEO John McGrath defended his decision to list the real estate group on the ASX following the release of its half-year profit results.
“We are not influenced by the short-term share price volatility,” Mr McGrath told REB.
“We think we still made the right decision. We are on track to deliver on what we promised.
“Our reasons to list on the ASX are as valid today as they were on the day we listed.”
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