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Singapore’s Largest Real Estate Brokers; PropNex (SGX: OYY); APAC Realty (SGX: CLN)

As property prices increase in Singapore, so to are the profits of these real estate brokerage companies.


From lucrative sign-on cash incentives, training and development subsidies, to penalty supports for switching agencies, the recruitment war for property agents heated up in late 2021. Amidst the piping hot property market, Singapore’s biggest real estate property agencies, PropNex (SGX: OYY) and APAC Realty (SGX: CLN), have performed well. In their recent financial announcements, PropNex FY2021 net profit soared 109% to hit S$65.1 million, while APAC Realty’s net income grew by 116% and reached S$35.3 million.

The two companies, comprising of 55% of the total number of real estate salesperson in Singapore, accounts for a large volume of housing transactions in Singapore.

In this article, we will look at Singapore’s two largest real estate brokerages and some key information you need to know about them.

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Before that, a brief business background about the two companies.

Business Background Of PropNex & APAC Realty (ERA)

PropNex is Singapore’s leading real estate agency, providing brokerage; training; property management; and project marketing services for residential, industrial and commercial real estate properties. Beginning as a small Muslim real estate agency, it grew to a partnership of 5 real estate agencies and later on merged into one entity known as Property Network for Excellence or PropNex.

APAC Realty is a real estate service provider in the Asia Pacific Region, offering real estate brokerage; franchise arrangement; training, valuation and other ancillary services. It holds the ERA regional master franchise rights for 17 countries in the Asia Pacific, including Singapore. ERA, known as Electronic Realty Associates, is a global brand spanning across 33 countries. Similar to how Hanbaobao Pte Ltd owns the franchising rights for McDonald’s restaurants in Singapore, APAC realty owns the ERA franchise in the Asia Pacific region.

Current Financial Results For PropNex & APAC Realty

In their most recent quarterly filing, PropNex reported FY2021 revenue of S$957.5 million – an 86.5% increase compared to last year; APAC Realty did not disappoint either, announcing FY2021 revenue of S$739.8 million – an 87% increase from the previous year. Both companies had benefitted from the surging post-pandemic demand for housing that saw the number of transactions in Singapore’s private residential resale market almost doubled compared to 2020. As revenues soared, so did profits. PropNex and APAC recorded FY2021 profits of S$65.1million and S$35.3 million respectively.

The difference in revenue and profits between the 2 companies is primarily due to PropNex having a larger market share than APAC Realty in the brokerage business segments of private new launches, private resale and HDB resale. PropNex’s larger scale also enabled it to pick up more residential project marketing business, contributing S$216.8 million to its top line.

Dividends and Payouts For PropNex & APAC Realty

With their record earnings, PropNex and APAC Realty have announced tantalising dividends to reward their investors. PropNex issued a final dividend of 7¢ per share, bringing total 2021 dividends to 12.5¢ per share. Based on PropNex’s share price of S$1.84 as of 16 April 2022, that represents a 6.8% dividend yield – higher than the 6.1% average yield for Singapore REITs or 3.2% for the Straits Times Index.

APAC Realty declared a final dividend of 4¢ per share, with aggregate 2021 dividends of 7.5¢ per share. Based on APAC Realty’s share price of $0.78 as of 16 April 2022, this is a 9.7% dividend yield.

The payout ratio indicates the percentage of profits paid out to shareholders in the form of dividends and is calculated by dividing the company’s total dividends by its earnings. A higher payout ratio is more attractive to investors seeking income-based returns. However, it could also mean less profit is reinvested back into the business and may reduce the company’s growth potential.

Here we see that both companies have paid out 75-78% of their net income as dividends, but PropNex has, on average, paid out a higher ratio than APAC Realty over the past few years. APAC Realty’s lower payout ratio may be attributed to its 50.4% year-on-year increase in capital expenditure – to support its foreign expansion in Indonesia, Thailand, Vietnam and Malaysia. In comparison, PropNex’s capital expenditure only increased by 13.0%.

Data Extracted From Tiger Brokers

Now, we will look at how PropNex and APAC Realty perform in different financial metrics relating to growth and profitability. In principle, companies that can grow their sales and earnings should expect to see their share price rise. For the 5-year period from 2017 to 2021, PropNex notched a 31.3% compound annual growth rate (CAGR) while APAC Realty saw a 20.8% CAGR.

The metric return on equity (ROE), which measures how much a company earns for each dollar that shareholders have invested in it, is chiefly used to evaluate how well the company’s leadership is managing its shareholders’ money. Here, PropNex achieved 61.1% ROE compared to APAC Realty’s 22.4%.

Investing In Technology

Amidst the disruption brought by COVID-19 and the changing demands from customers, both companies have embraced technology to stay relevant and operational. APAC Realty invests in proprietary real estate technologies such as proptech startup Dots Connected, which owns and operates UrbanZoom – an AI-driven auto-valuation real estate platform. APAC Realty has also formed a strategic partnership with Fang.com, enabling the firm to list Singapore properties on the popular Chinese property portal. This entry into the lucrative Chinese market, which makes up the second-largest group of homebuyers in Singapore, is expected to drive sales for its agents. Other technological innovations include the iERA mobile app, FindPropertyAgent.sg, and robo-advisors. What is the impact of all this? In its annual report, APAC Realty’s management credited the company’s advancements in digitalization and IT transformation with improving the average income per ERA trusted adviser from S$52,000 to S$90,000.

For PropNex, it recently acquired a 70% stake in OVVY, an online marketplace for household services such as air-conditioning repair services, to provide value-added services for its clients. PropNex had also previously hosted its own Virtual Property Expo, which attracted over 30,000 viewers, as well as continuing to invest heavily in IT-related training for its salespersons.

Geographic Expansion

Given Singapore’s limited land space, newly announced property cooling measures and the lack of major project launches in 2022, the obvious business acumen for a property firm is to expand overseas. Both firms share this strategy to increase their regional presence. Since 2016, after PropNex first expanded into Indonesia, it has entered the Malaysia, Vietnam, and Cambodia markets. In comparison, APAC Realty holds the exclusive ERA regional master franchise rights in the Asia Pacific, giving it a bigger outreach: from nearby ASEAN neighbours to Japan and Korea. If we look at the manpower distribution of its sales agents, we can get a clear picture of the 2 companies’ geographic footprint. APAC Realty has 2 main markets: Singapore and Indonesia; whereas PropNex focuses largely on Singapore.

With COVID-19 slowly becoming endemic in the Asia Pacific and their economies back whirring, industry watchers are projecting real estate transactions to soar due to multiple factors: strong liquidity, favourable government policy, return of foreign direct investments and prolonged pent-up demand. For the 2 companies, capturing this rebound in property sales could mean another bumper year like what they experienced in Singapore in 2021.

Overall, the 2 real estate titans each have their own unique selling points. It is too early to conclude that a clear market leader has emerged, and it is up to investors to decide which prospects matter more to them when carrying out their investment decisions.

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