More small agencies may follow the lead of two long-term independent agencies in Perth, who have merged into one large operation to reap better business efficiencies, one of the managing directors involved in the deal has said.
“There are significant economies of scale in running a bigger agency versus a small one in areas such as IT, admin and office overheads,” Airey Real Estate managing director David Airey told Real Estate Business.
Mr Airey, who is also president of the Real Estate Institute of WA (REIWA), has merged with fellow Claremont-based agency Browne Grove & Associates (BG).
“We expect to drive more than twice as much revenue with less than a 60 per cent increase in expenses on a full year combined group basis,” he continued.
“I’m convinced that the future of real estate agency practice in WA will be bigger offices with bigger rent rolls and very proficient staff who can handle diverse tasks across the business and provide sales support as well as focus in customer retention and relationship building.”
“Opportunities to merge or acquire local agencies are rare let alone long established offices with a great reputation and history such at BG,” Mr Airey added.
Both agencies have been in business for well over 30 years.
Mr Airey, who is now the Airey Browne Grove Group managing director, said he started Airey Potter & Associates with Geoff Potter in 1978, whilst Browne Grove commenced in 1981.
Mr Airey also announced that three of the former BG Partners, Michael Charleston, Mal McColl and Reg Ransom will all stay on in the merged group whilst Warwick Airey will manage the Airey Real Estate business.
The group now employs over 25 staff and will manage over 800 residential properties and around 50 commercial tenancies predominantly in Perth’s western suburbs and will operate from separate premises in Claremont.