New owners to re-list ERA within 3 years

PHOTO: New owners to re-list ERA within 3 years

SINGAPORE - Singapore's biggest real estate agency ERA Realty Network will make its presence felt on the Singapore stock market again in three years or under, said its new owner, private equity firm Northstar Group.

Northstar yesterday confirmed its purchase of the Singapore franchise rights to the ERA brand from Hersing Corporation, which is owned by real estate agency veteran Harry Chua. Northstar said it aims to re-list ERA as a "pure-play" real estate brokerage firm on the Singapore Exchange, and that the initial public offering might happen even sooner than the three-year time frame if market conditions are favourable.

Both Hersing and Northstar declined to disclose the value of the acquisition, though BT understands that a $130 million deal was inked.

Northstar said that the acquisition will gain it entry into the Singapore real estate brokerage industry "with a strong foothold and a ready platform for expansion".

Hersing and its chairman Mr Chua, 66, have each signed a non-compete agreement with Northstar.

In 1998, ERA became the first property agency here to be listed when Mr Chua put Hersing - made up mostly of the ERA business - on the Singapore Exchange. Last November, after 14 years, he took Hersing private.

Last year, ERA completed more than 44,000 sale transactions in Singapore, valued at a total of $22.3 billion. BT understands that this translated into a net profit of about $15 million to $16 million for Hersing. This made up the lion's share of the earnings of the group, which also holds the franchise for dim sum restaurant Tim Ho Wan and runs the money transfer business Western Union here, among other interests. ERA is the biggest agency in Singapore by number of agents. It has 5,201 agents here, going by data from the Council for Estate Agencies.

Apart from ERA, Northstar is buying Hersing's Singapore franchise rights to Coldwell Banker - now dormant here - and Hersing subsidiary RIA School of Real Estate, which is a real estate course provider.

Northstar added that it is also acquiring Hersing's Asia-Pacific master franchise of ERA, which covers 18 countries in the region. The purchase of the Asia-Pacific rights is subject to the approval of master franchisor Realogy Holdings Corp, a US real estate brokerage that owns both the ERA and Coldwell Banker brands.

Under the deal, Jack Chua - unrelated to Harry Chua and well known as the leading dealmaker of ERA Realty - will return to head the agency as its chief executive. He is leading a group of senior ERA executives to co-invest with Northstar in the ERA business, said Northstar yesterday.

A source told BT that they will take up a 20 to 30 per cent stake in the firm. Ashish Shastry, a managing partner of Northstar, said that the share ownership programme "allows senior ERA agents to participate in the long-term growth of the company". He added: "Jack has done a great job building the ERA business and we are privileged to partner with him."

In January this year, a group-wide restructuring exercise installed Richard Tynes, previously Hersing's chief investment officer, at ERA's helm.

Mr Jack Chua started helping Hersing to set up and grow the Singapore outpost of Tim Ho Wan, which opened at Plaza Singapura in April. (Hersing owns the franchise rights to the Tim Ho Wan brand for the Asia-Pacific.) With ERA sold, Mr Tynes returns to Hersing; Mr Harry Chua said he will now focus on growing Hersing's other businesses.

Besides the restaurant and Western Union, Hersing continues to run Casa Kidi, a company that helps to furnish and design children's bedrooms, and architecture and interior design firm HC Design.

Northstar, headquartered here, is co-founded and owned by Patrick Walujo, the son-in-law of Theodore Rachmat, one of Indonesia's richest men who previously ran auto distributor Astra International.

It manages more than US$1.2 billion in committed equity capital dedicated to South-east Asia. Last November, it bought a controlling 50.05 per cent stake in Singapore-listed Nera Telecommunications from Norway-based power conversion firm Eltek ASA. Northstar then attempted but failed to buy up the entire firm in a mandatory takeover bid.


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