McGrath acquires Sydney real estate business
Written on the 5 June 2019 by Business News Australia
Listed real estate group McGrath (ASX: MEA) has acquired Sydney Sotheby's International Realty - CBD and Pyrmont for $1.6 million.
Owned previously by Richard Shalhoub (pictured), the company is a sales agent in the NSW capital's CBD and northern CBD harbourfront markets.
The deal will be settled in cash by the beginning of July 2019 and is not expected to make a material impact on McGrath's short-term earnings outlook.
The acquisition marks a return to McGrath for Shalhoub, who previously worked at the company for nine years from 2007 to 2016.
He was instrumental in the company first being appointed by Property NSW in 2014 as its executive selling agent for the Millers Point program, and was intimately involved in the success of the state government sell-off.
He left McGrath to become the principal of the company recently acquired by his former employer.
The announcement follows a similar move with an ex-McGrath agent in April. John McManus made his return to the company after McGrath acquired LJ Hooker Willoughby/Artarmon for $2 million.
McGrath CEO Geoff Lucas says Shalhoub's return to the company is welcomed.
"Richard returning to McGrath is a win-win for both of us and is in line with our overall strategy to increase market share in key markets with the recruitment of exceptional agents who have the desire to be part of a well-resourced and well-established brand," says Lucas.
This latest acquisition comes soon after the real estate company announced a loss of almost $10 million for the first half of FY19 in February 2019.
The loss was blamed on challenging property market conditions and one-off charges for legacy IT development costs and contracts.
Shares in McGrath have been on a steady decline since a new board was appointed in a bid to turn the company's fortunes around. They have only recently started to pick up again in mid-May 2019.
It was a period marked by sharp profit downgrades, impacts from competitor The Agency snapping up McGrath's top talent, and speculation around founder John McGrath's large gambling debts which were later confirmed as not connected to the company.
Shares in McGrath are up 1.85 per cent to $0.28 per share at 2.01pm AEST.
Business News Australia
Author: Business News Australia