Passing of an ERA? Top realty firm may be sold

SINGAPORE - Harry Chua, a key figure in Singapore's real estate agency industry, is looking to sell his baby - ERA Realty Network - for about $150 million.

Mr Chua's Hersing Corporation is understood to have put the group's master franchise rights to the ERA brand on the market. Hersing's rights to the US brand covers Asia-Pacific and are perpetual renewal rights, renewable every 30 years.

ERA has about 9,000 agents across the Asia-Pacific in countries such as Japan, Taiwan, Thailand, Korea, Malaysia and China. Most are located in Singapore, where ERA has 5,103 agents, according to data from the Council for Estate Agencies.

The agency is currently led by Richard Tynes, who took over as chief executive officer in January this year. Running the show previously was Jack Chua, who has been with Hersing for over 20 years and is widely regarded as a key figure at ERA, and the agency's dealmaker.

BT understands that Mr Jack Chua, who is Hersing's CEO, is currently more focused on growing the Singapore outpost of famed Hong Kong dim sum chain Tim Ho Wan - which opened recently at Plaza Singapura. Mr Harry Chua owns the franchise rights to the Tim Ho Wan brand for the Asia-Pacific region.

"ERA gets a lot of projects due to Jack," said a source, who declined to be named.

In response to BT's query on the sale, Mr Tynes said: "Harry Chua has received interest from external parties regarding a potential transaction with ERA and is in the process of evaluating it.

"Harry Chua receives interest in ERA from time to time due to the long term success and future potential of the business and brand."

Talk that the ERA brand may change hands has been in the market for more than a month. Said the managing director of a real estate agency here, who declined to be named: "There are people who are interested, but the issue is the price."

The move to sell the ERA franchise rights comes after Hersing was delisted from the Singapore Exchange Mainboard in November last year after more than 14 years as a listed company with earnings largely driven by the ERA business.

A group-wide restructuring exercise led to the individual units all appointing their own CEOs. Previously, all units came under the direct purview of Mr Jack Chua, who has been Hersing's CEO from 2011. Prior to that, the group was helmed by Mr Harry Chua, who is now Hersing's executive chairman.

Mr Harry Chua, who is 66 years old this year, is an established figure in the real estate scene and is credited for having sold 12 condominiums on one record- breaking afternoon in 1979.

He brought the ERA brand into Singapore in 1982, when it was still an unknown US name, and set up shop in a 2,000-sq-ft office on the fifth floor of Plaza Singapura.

Under his leadership, ERA grew from selling $25 million worth of properties in its first year, into an agency that made $1.1 billion in property sales in 1993.

It was also under Mr Harry Chua that ERA launched new products for the resale market such as a Seller Security Plan, which promised: "If we don't sell your house, ERA will buy it". Other marketing programmes it initiated includes one that assured buyers of Housing and Development Board properties the return of their deposit if a seller is later found to be a bankrupt.

In 1998, Mr Harry Chua listed Hersing - which at that time was made up mostly of the ERA business, and which therefore made ERA the first property agency in Singapore to be listed.

By 2011, the year before Hersing was delisted, ERA was involved in over 35,000 transactions with a total property value of about $17 billion, according to Hersing's annual report that year.

ERA is a large contributor to Hersing's bottomline. In 2011, the real estate services business accounted for 86 per cent of the $274.2 million in total revenue that Hersing made.

Profit after taxation from the real estate business was $13.7 million, although Hersing's profit after tax that year was $12.8 million due to losses incurred by its self storage, design and furnishing services segment.

Hersing's real estate services business includes ERA, real estate course provider RIA School of Real Estate, and Coldwell Banker - which Hersing holds master franchise rights to in Singapore.

Hersing also runs self storage business Storhub, and design and furniture companies such as Casa Kidi and HC Design. It also manages Western Union Money Transfer Singapore.

In April, it opened the Singapore branch of Tim Ho Wan, and has plans for more outlets in Singapore and in the region.

Get The Business Times for more stories.