Knight Frank and Bayleys have completed their acquisition of McGrath Limited and announced a new board of directors to lead the group.
The move comes after McGrath Founder and Chief Executive Officer, John McGrath, announced in March that he had decided to sell the company and delist it from the ASX.
The Scheme of Arrangement became legally effective on June 17, with the quotation of McGrath shares on the ASX suspended the next day.
On June 27, the Scheme of Arrangement was implemented, with settlement of the acquisition now effected.
McGrath’s new board of directors will comprise Mr McGrath, Knight Frank Australia CEO James Patterson, Knight Frank Global Head of Residential Rupert Dawes, Bayleys Managing Director Mike Bayley and Bayleys Finance Director Ken MacRae.
Mr McGrath will continue on at McGrath as Chief Executive and Managing Director and will retain his 23.3 per cent shareholding in the company.
“Our goal is to build Australia’s leading and finest real estate brand over the next few years and this new partnership and network puts us in an extraordinarily strong position to do just that,” he said.
Mr McGrath said joining forces would give their clients greater firepower when selling their homes.
“We are delighted to be joining forces with two of the greatest real estate brands in the world,” he said.
“Knight Frank is the most prestigious residential agency globally and provides us and our customers with instant access to the best global network and the most sophisticated international buyers in the world.
“Direct access to international buyers, especially high net worth residential buyers, is fast becoming a must-have if you want to compete in the premium end of the market.
“And over 50,000 Australians and Kiwis swap addresses across the ditch each year and they all need access to great property so one shouldn’t underestimate the value of having NZ’s leading real estate company, Bayleys, as our partner.”
Knight Frank and New Zealand-based Bayleys have had a strategic relationship since 2018.
The firms’ acquisition of McGrath has seen the residential real estate network return to private ownership after being listed on the ASX since 2015.
For Knight Frank, the McGrath acquisition demonstrates the firm’s commitment to Australia, with the country further consolidating its position as Knight Frank’s largest presence outside the UK.
Together, Knight Frank and McGrath have 171 offices across Australia.
Meanwhile, Knight Frank, Bayleys and McGrath combined have a footprint of 276 offices across Australia, New Zealand and the Pacific Islands.
Knight Frank Australia Chief Executive Officer, James Patterson, said the acquisition was a milestone in the brand’s international expansion journey and would allow them to consolidate the business’ residential footprint globally, while leveraging its expertise and extensive reach to create enormous opportunity for McGrath and their customers.
“It will also allow Knight Frank Australia to continue to focus on its core business of commercial property whilst gaining exposure to the strong domestic residential market through an established brand offering attractive growth potential,” he said.
“We see huge benefits in working in partnership, taking advantage of the networks and expertise of all three real estate brands to grow together, maximising our combined status as one of the top real estate networks in the nation in terms of size.
“We are hugely excited to partner with John McGrath and his team to fully realise these future growth prospects.
Mr Patterson said McGrath was a great cultural fit for Knight Frank.
“We are aligned on many areas including our values, how we operate and our brand positioning,” he said.
“The Knight Frank, Bayleys and McGrath teams will continue to operate on a ‘business as usual’ basis, but with each party gaining access to vastly broadened networks, stretching across multiple borders, unlocking greater opportunities for our clients.”
In New Zealand Bayleys commands 48 per cent of the commercial market nationally, 38 per cent of the farm sales market and 16 per cent of the national residential market, which increases to 34 per cent market share in the $3 million-plus bracket.
Bayleys Managing Director, Mike Bayley, said Bayleys was excited about the opportunity to support the growth and diversity of McGrath.
“Bayleys views the partnership with McGrath and Knight Frank as a collaboration of leading real estate companies servicing markets on both sides of the Tasman whilst providing unprecedented global reach,” he said.
“The ability to share ideas and innovation as well as systems and information will add considerable value to our customers and agents across Australasia.
“With the New Zealand and Australian business communities and property markets becoming more closely linked, the benefits for both McGrath and Bayleys customers and personnel are significant.”
