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Residential real estate agencies are increasingly expanding into the commercial sector as they look to diversify their offerings and build better client relationships.
As more residential real estate agencies expand into the commercial sector, LJ Hooker has revealed the key decisions behind the establishment of its Commercial Southern Gold Coast agency.
The business was started in 2020 as a result of the network deciding to leverage the opportunity to build on its skill set and grow the brand’s presence in the region.
The expansion followed LJ Hooker Palm Beach’s acquisition of 30 commercial properties in a rent roll in 2015, including aircraft hangars and retail shopfronts.
Rather than referring the properties on to a commercial agency, managing director Dan Alexander and his team decided to capitalise on the opportunity to grow the brand and delve into the commercial sector.
Alexander said that in 2018, the leadership team recognised an opportunity to expand the LJ Hooker Commercial business in the Gold Coast’s south.
“The southern end is typically serviced by independent commercial agencies, and we thought bringing in some quality talent, working under the LJ Hooker brand, would grow market share,” he said.
As managing commercial properties is substantially different to residential, commercial property specialists were recruited in 2020, with LJ Hooker Commercial Southern Gold Coast established.
Since its beginning, the business has grown to manage a commercial portfolio of more than 500 tenancies, with commercial management fees now accounting for 40 per cent of the group’s overall property management portfolio.
Alexander said that as a result of the scale of the business’s commercial rent roll, it has become well-known among most stakeholders in the commercial property sector in the region.
“There’s a lot of organic growth that has come about from our profile,” he said.
“We invested in dedicated office space in Burleigh Heads for our LJ Hooker Commercial Southern Gold Coast team.”
When it comes to the benefits of the expansion, Alexander said there is a strong appeal for clients who are commercial investors to also have their residential property investments dealt with by the brand.
“Once you prove that you know what you are doing and can look after their commercial property well, landlords often ask us if we can also take on their residential property,” Alexander said.
“There is a lot of appeal for investors to have all their property interests handled by one group. There’s obvious convenience and consistent service standards.”
He also said the business now has a more holistic view of client’s property needs, and can better provide advice and recommendations regarding their property strategies.
“Diversifying has enabled us to grow our business and become closer to our clients,” he concluded.
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