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Business deals

Singapore's PropertyGuru to acquire Malaysia and Thailand rivals

Real estate portal follows Grab and Gojek with Southeast Asia's latest megadeal

Despite the pandemic-triggered global economic downturn, the residential real estate markets in Singapore and other cities have been heating up.   © Reuters

SINGAPORE -- Singapore's PropertyGuru plans to acquire rival platforms in Malaysia and Thailand in a bid to cement its position as Southeast Asia's dominant online housing marketplace.

The deal is also the latest to show how Southeast Asia's digital startups and internet economies have garnered global attention.

The real estate technology portal said on Monday it will buy all of the shares in the units of Australia's REA Group that run competing platforms iProperty.com.my and Brickz.my in Malaysia as well as thinkofliving.com and Prakard.com in Thailand.

"By combining our resources, we will be able to deliver even more innovation to home seekers, equipping them with the insights they need to make confident decisions," said Hari V. Krishnan, CEO and managing director of the PropertyGuru Group.

Under the deal, the Australian Stock Exchange-listed REA Group will receive 18% equity in the PropertyGuru Group and appoint a board director. The deal is expected to close in July.

"Joining with the PropertyGuru Group creates new opportunities for collaboration and access to a deeper pool of expertise, technology and investment," REA Group CEO Owen Wilson said. "It positions these already strong brands well to accelerate the next wave of Proptech innovation in Southeast Asia."

PropertyGuru's bid to dominate Southeast Asia's online real estate space comes amid a swell of consolidation among the region's big online players.

PropertyGuru's bid to dominate Southeast Asia's online real estate space comes amid a swell of consolidation among the region's big online players. (Source photos by REA Group)

Singapore "superapp" developer Grab in April announced plans to go public in the U.S. through a merger with a special purpose acquisition company, or SPAC. The deal values Grab at $39.6 billion.

Also known as a "blank check" company, a SPAC is a listed shell corporation set up with the intent to eventually acquire an unlisted company. The maneuver allows the target company to list on public exchanges without having to go through the arduous IPO vetting process.

In May, Grab's Indonesian rival, Gojek, said it would merge with e-commerce platform Tokopedia to create one of Southeast Asia's biggest tech conglomerates. The resultant GoTo Group will cover everything from ride-hailing and digital payments to online shopping.

PropertyGuru's announcement has echoes of Grab's and Gojek's recent deals in that growth is being sought -- and Southeast Asia's smartphone-tethered consumers are being pursued -- via acquisitions.

The region's importance to digital companies is widely recognized. According to research by Google, Temasek and Bain & Co., the gross merchandise value of Southeast Asia's internet economy is expected to grow threefold, to $300 billion, in the five years to 2025

PropertyGuru is also set to ride house-buying waves in certain Asian markets. Despite the pandemic-triggered global economic downturn, the residential real estate markets in Singapore and other cities have been heating up.

In Singapore, property buyers have been taking advantage of low interest rates to purchase homes, with many of them eyeing real estate as a haven investment. The trend is contributing to steadily increasing apartment prices.

Despite all the uncertainties brought about by the COVID-19 pandemic over the past year, PropertyGuru said its platform is experiencing growth in the number of monthly visits, to 35 million regionally. The startup says it offers information on more than 2.8 million homes across Singapore, Malaysia, Thailand, Indonesia and Vietnam.

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