The lettings market will likely see more consolidation in the coming years, which provides an opportunity for agencies who are looking to grow their managed portfolios.
Acquisitions will be key to many agencies’ growth strategy in the coming years, as an increasingly competitive operating environment sees more agencies leave the market altogether, with 39% of agents saying they would consider selling their agency if the opportunity presented itself in Goodlord's State of the Industry Report. But it’s an opportunity for those that continue operating to grow their books and expand the reach of their brand.
“Acquisition is now the main way we acquire landlords, rather than focusing on advertising - it’s instant turnover, instant money in the bank,” says William Walsh of Venture Residential in London. “We’ve acquired three smaller agencies and brought them under our banner, growing our lettings side of the business to a huge extent. Lettings is becoming a bigger and bigger part of our business - it now makes up 50%.”
Walsh believes that, as long as a business has the right systems in place to manage process, acquiring another agency is a “no brainer”, and his business will continue to pursue growth by acquisition. “If the figures stack up, and we can do it all from our existing office, we can acquire another business. We’re not bringing on more costs, we’re bringing in more income.”
Elinor O'Neill of loc8me, a nationwide student accommodation provider, says that acquisition can “help you to grow much quicker than what you would have done organically if it is managed well.”
O'Neill’s advice for agencies who are looking to acquire another business is to ensure the business you’re looking to acquire is a good fit with your own company by carrying out your due diligence.
“You can’t really do enough of it - talk to anybody who knows the company or who has dealt with it themselves. Usually, you won’t be able to talk to the staff before a purchase but if you can, do. Otherwise, talk to anybody who knows the business or who has dealt with it themselves, like landlords,” says O'Neill.
Once the acquisition of the business is complete, O'Neill suggests considering the value of the existing brand before rebranding or shutting down existing offices.
“You can track this by the amount of walk ins, enquiries from the website and so on. You might want to consider leaving the brand running, which gives a choice of companies to the customer and might add something valuable to your existing brand.”
Acquiring a new business can be a complicated process, but it’s worth it, says O’Neill. “It might seem like a hard slog, but it's worth it in the end if you've got an appetite to grow.”
