Northstar buys Singapore's ERA Real Estate in MBO - update

Although the financial details were not disclosed, the deal is reported to be worth more than S$100 million but less than the S$150 million Hersing was seeking when it put ERA up for sale earlier this year.

The acquisition will be done through a newly-incorporated Northstar unit - Realty Partners Group, which is entering the real estate brokerage industry with a ready platform for expansion.

The ERA brand is owned by US real estate brokerage Realogy Holdings but Hersing holds the perpetual master franchise rights for Asia Pacific and has a network of more than 9,000 agents across the region, including Indonesia, Japan and South Korea.

Northstar has acquired Singapore franchise but is also in the process of acquiring the Asia Pacific Master Franchise of ERA covering 18 countries in the region, subject to the master franchisor's approval.

In Singapore ERA has over 5,100 sales agents and completed sale transactions with a total property value of S$22.3 billion in 2012.

Chua has been instrumental in growing ERA's business over the years, working with Hersing's executive chairman, Harry Chua, who introduced the ERA franchise to Singapore in 1982. Hersing and Harry Chua have each signed a non-compete agreement with Northstar.

Real estate brokerage fees and related services accounted for the bulk of Hersing's S$274.2 million in revenues for 2011. Group level net profit for the year came to S$12.8 million.

Hersing delisted from the Singapore Exchange last November and this was followed by a group-wide restructuring exercise that saw CEOs appointed for each division.

Ashish Shastry, chairman of Realty Partners Group and managing partner at Northstar, said: "We are also working on a share ownership program which will allow senior ERA agents to participate in the long-term growth of the company. We aim to re-list ERA as a ‘pure-play' real estate brokerage firm on the Singapore Exchange, within the next two to three years."

Northstar is currently investing its third fund, which closed in 2011 at $820 million. Although predominantly focused on Indonesia, the PE firm does have a remit to pursue outside the country. Last year it completed an acquisition of Singapore-listed Nera Telecommunications, paying approximately S$94.65 million for a 53.38% stake.

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• Topics
• Southeast Asia
• Real estate
• Real estate
• Singapore
• Real estate
• Northstar Group
• buyout