Wednesday , October 16 2019

Singapore’s PropertyGuru plans to raise $257m, Australian listing

Bloomberg

PropertyGuru Pte, a Singapore-based provider of online real estate classifieds, plans to raise as much as A$380.2 million ($257 million) and list on the Australian stock exchange.
The shares’ indicative price range is between A$3.70 and A$4.50, giving a market capitalisation at the upper end of around A$1.36 billion, the company’s October 7 prospectus shows. A book build to determine the final price will be held later this month and trading is expected to start on October 25.
PropertyGuru operates classifieds marketplaces in Singapore, Vietnam, Malaysia, Thailand and Indonesia and estimates it has a 60% consumer market share.
Pro-forma revenue has grown at a compound annual rate of 26% over the last three years, and last year, the company became Ebitda and free cash flow positive, according to the sales document.
“The market opportunity for online property advertising in our core markets is underpinned by a number of key macroeconomic and other trends,” Chairman Olivier Lim said.
“These include strong population growth, urbanisation, increasing penetration of the internet within the population, increased access to mobile phones, and in particular smartphone penetration, as well as rising wealth levels.”
PropertyGuru was founded in 2007 by Steve Melhuish and Jani Rautiainen. The company has raised more than S$400 million ($290 million) to date over four rounds involving institutional investors such as TPG Capital and KKR & Co.
Melhuish and Rautiainen together own around 11.6% of the company, or about 30.45 million shares. As part of the IPO, they’ll sell down that stake to 7.2%. If the sale prices at the top end, that would mean a combined windfall of A$37.3 million.
Proceeds from the offering will be used to pursue the company’s growth strategy, including an expansion into mortgage-financing services via an online mortgage marketplace.
Some of the risk factors cited by PropertyGuru in its prospectus include the limited amount of online property advertising expenditure in Southeast Asia and disruption from competitors.
“Online property advertising expenditure in our core markets ranged from 4% in Indonesia to 36% in Singapore in 2018, which is significantly below developed markets such as Australia and the UK at 76% and 75%, respectively,” the document said.
It added that “large companies with strong brand awareness in international markets or global search engines and social media sites, such as Facebook or Google may decide to enter the property market and start advertising.”
PropertyGuru’s planned Australian listing comes around two years on from APAC Realty Ltd’s debut in Singapore. Shares of APAC Realty, the owner of Singapore property broker ERA, are up 12.4% this year after slumping 49% in 2018.

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