Sherry FitzGerald, Ireland’s largest estate agent, plans to re-enter the commercial property sector and expand its mortgage broker business with a view to becoming the biggest player in the market.
Chief executive Steven McKenna told The Irish Times that the company wants to re-enter the commercial property space, having sold its business to Cushman & Wakefield in 2018, at a time when it represented about 40 per cent of its annual revenue.
“We are actively developing that strategy at the moment,” Mr McKenna said. “We are looking at various opportunities and have the possibility of doing an organic growth strategy with niche acquisitions. We will be accelerating that for 2023.”
The agency also wants to become the country’s leading mortgage broker and financial adviser. In the past 12 months, its broker unit has received mortgage enquiries to the value of €600 million, with €200 million drawn down by house buyers.
“We are looking at how we can expand the service offering nationally through our network and using our technology around it. We have 9,000 existing [broker] clients on our database that we have never really tapped into for repeat business. We see opportunities in terms of life, pensions, investments and insurance.”
Mr McKenna noted that there are about 2,500 mortgage brokers in the market. “They’re quite small businesses and we would see an opportunity to consolidate the marketplace,” he said.
Sherry FitzGerald was acquired earlier this year by CastleGate Investments, an investment fund controlled by entrepreneur and founder of eShopWorld Tommy Kelly in a cash deal valued at about €50 million. CastleGate chief executive Roy Barrett replaced co-founder Mark FitzGerald as chairman, with Mr FitzGerald remaining as a strategic adviser to the board.
The company’s latest accounts show that revenues rose last year by 27 per cent to €31.8 million while its pretax profit increased by 20 per cent to €2.4 million.
Mr McKenna said the estate agent sold 8,000 properties in 2021 with a combined capital value of €3 billion. About half of the sales came through its franchise network while 1,650 of those sales were new homes. He expects it to sell about 8,800 homes this year.
Commenting on trends in the residential housing market, Mr McKenna said: “We’re not seeing the frenzied bidding of Covid times but the level of demand is still outweighing the level of supply in the marketplace. In the past five weeks alone, we’ve pretty much sold out on all launches. We’ve sold 250 new homes in the greater Dublin area. They are predominantly first-time buyers and 80 per cent of those accessed the help-to-buy scheme. If we had more units coming on we’d be selling them.”
He also suggested that the supply of new homes next year might not meet forecasts. “We’ll come in at 25,000 new homes delivered this year, which is pretty much on track with what was forecasted. But if you look into next year, which I think the forecast would have been for 28,000 units, our projections suggest it would be 23,000. It will be down 5,000 and that will largely be due to PRS [private rented sector] and the lack of viability around it.”