Australia’s two largest online property portals are still doing most of the ‘financial’ heavy lifting within their parent’s businesses.
REA Group, part of News Corp and owner of realestate.com.au, announced an impressive 16 per cent growth in Australian revenue for the March quarter compared with the same period last year.
Its ASX announcement noted the result was driven by the strength of the group’s residential business and was achieved in a climate of lower listing volumes and declining dwelling commencements.
EBITDA from core operations also grew 20 per cent in Q3, reflecting improved contribution from associates and timing of expenses.
REA Group Chief Executive Officer, Tracey Fellows, commented: “We’ve been able to deliver a strong result this quarter by launching exciting consumer experiences and delivering new products which provide value to our customers. New products have included Front Page, a product to advertise their properties on the realestate.com.au homepage, the Lifestyle experience editorial content section and Spacely for short term and temporary commercial rentals.
Meanwhile, over at Fairfax Media, Domain’s Q3 results were a rare bright spot in a turbulent week for the company, where news was dominated by industrial strife and an unsolicited takeover bid.
Fairfax chief Greg Hywood announced Domain’s revenue was up 10 per cent in the March quarter compared with Q3 2016, while the company’s total digital business was up by 18 per cent, helping to offset ongoing losses in the print businesses.
But the future of Australia’s second largest online property portal is now in limbo after an opportunistic bid by global private equity outfit TPG to buy out Fairfax’s key assets of which Domain is undeniably the jewel in the crown.
TPG, best known in Australia for its 2006 takeover and subsequent listing of retailer Myer – which proved extremely lucrative for TPG but a disaster for shareholders – is proposing to hive off Domain and Fairfax’s key news outlets into a new non-listed entity.
The Fairfax board is widely expected to reject the $2.2 billion offer within days, but the play may be just the beginning of a long battle for the media company.
While the current bid has been criticised as way too low and a cherry-picking exercise, TPG does have a track record in the online real estate space.
In 2011 it acquired RentPath (then PRIMEDIA) which claims to be the US’s largest digital real estate rentals platform and four years later acquired a controlling stake in Singapore real estate listing site PropertyGuru.com, which operates throughout South East Asia.