Hockingstuart has revealed plans to diversify into broking after opening three other related businesses in the past 12 months.
Managing director Nigel O’Neil said the 50-office group expected to open its new brokerage in the next six months.
“We had a joint venture until 12 months ago, but unfortunately, it didn’t work out, so we’re deciding to start again,” Mr O’Neil told Real Estate Business.
“We’re going to employ a general manager for the mortgage business who will eventually own a share of that. They’re going to leverage their expertise and relationships to build a broker base from scratch.”
Mr O’Neil said Hockingstuart is frustrated that a lot of leads are going unfulfilled, and that franchisees and customers are missing out on the benefits of a one-stop shop offering.
While buyers and sellers rarely initiate discussions about mortgage finance, he said, they are often open to the idea once prompted.
“With banks, their relationship management skills are very poor, so if they’re with a bank [they’ll be] looking to compare whether their bank will give them a better rate,” Mr O’Neil said.
“Our model will be a broker model, so we’ll say we have a number of financial providers and ask if they’d be happy for us to talk about comparing what their bank can offer versus what we can offer.”
Hockingstuart has already made three diversification plays in the past year, adding an internal recruitment business, a removalist business and a connections business.
“The aim is to satisfy the needs of our landlords, vendors, purchasers and tenants,” Mr O’Neil said. “So, rather than have other parties make money off our customer base, we would provide those services and give back to our franchisees.”
Meanwhile, Hockingstuart this week expanded its register of shareholders from eight to 11 after making the first new additions since 2007. Rob Elsom, Andrew James and Toby Parker have been rewarded after being standout franchisees for more than a decade, Mr O’Neil told Real Estate Business.
“It’s about the evolution of the business. The business has grown larger over the last five years – it’s gone from about 32 offices to 50 offices,” he said.
“Therefore the make-up of the business has changed dramatically. It’s about recognising the strong contributors to our business today.”
Mr O’Neil said Hockingstuart’s long-term plan was to open another 10-20 offices in Victoria and then expand out of its home state.