Sinyi Realty Inc (信義房屋), the nation’s only listed property brokerage, yesterday said its board has approved a plan proposed by its chairman to personally acquire a major stake in rival H&B Realty (住商不動產), allowing the two companies to jointly enhance their standing in China.
Sinyi chairman Chou Chun-chi (周俊吉) said he will buy a 51 percent share of H&B Realty through his firm Yu Heng Investment Co (宇衡投資). He refused to disclose financial details, including the investment amount or whether the purchase would be funded with cash or via other means.
The two housing brokers would co-exist in the future as subsidiaries of the same holding group, Chou said.
“While Sinyi and H&B are leading real-estate agencies in Taiwan, they are modest in terms of scale and revenue when competing in the massive Chinese market,” Chou told a news conference.
H&B Realty chairman Wu Yao-kung (吳耀焜) said he is glad the company can become a member of the Sinyi group.
“I sensed the need years ago for integration among domestic real--estate agencies if they aim to expand in China and pursue sustainable prosperity at home,” Wu said.
Despite shared ambitions, Sinyi and H&B concluded it was better to maintain separate brands and operations, as modeled by US real estate giant Realogy Corp, which owns Century 21, Era, Coldwell Banker and Sotheby’s.
“The four US brands operate independently of one another,” Chou said. “Sinyi and H&B can follow a similar model.”
The integration can help both companies to save on expenses in areas such as procurement and personnel training, among other synergistic benefits, Chou said.
However, the integration would not affect either broker’s organizational structure or growth targets for this year.
H&B, established in June 1979 and known for franchise operations, has 368 franchise offices in Taiwan and another 235 outlets in China, Wu said. The agency intends to raise the number in Taiwan to 400 by the end of this year.
Sinyi Realty, which celebrated its 30th anniversary last month, will press ahead with plans to increase its number of outlets across the Taiwan Strait from the current 560 to 750 this year.
Sinyi will consider setting up a holding company, if necessary, to help both companies run more smoothly and effectively, Chou said, adding that Wu would retain his leadership position at H&B.
Sinyi reported NT$617.42 million (US$21.37 million) in net profits last month, falling 31.5 percent from the same period last year, as the forthcoming luxury tax weakened property transactions, Taiwan Stock Exchange data showed.
Cumulative net income totaled NT$2.93 billion for the first four months, rising 2.87 percent from a year earlier, according to the same statistics.