Chestertons, the UK’s oldest real estate agent, was sold to an European group that provides technology and services in real estate. This is the latest consolidation in the British Property Sector.
Emeria, owned by Swiss private equity firm Partners Group, has acquired the more than 200 year old London agency. A person familiar with this deal stated that Emeria paid about £100mn to acquire Chestertons.
Chestertons’ sale, which was confirmed by both parties on Monday, comes after a nearly two-decade long turnaround at the company. It also coincides with the increasing pressure in the UK Housing Market due to rising mortgage costs as a result of successive interest rate increases by the Bank of England.
According to Zoopla’s property portal, the market is set for its slowest growth in over a decade. House prices have fallen from their pandemic highs in recent months.
This sale comes after a US-based company CoStar made a bid for UK property portal OnTheMarket. CoStar announced last week that it had made a bid of approximately £100mn to acquire the company. This caused Rightmove shares to drop by 12 percent on Thursday.
Foxtons, a London-based agency, also announced earlier this year its intention to acquire rival agencies in order to grow its lettings business despite a slowdown of house sales. According to Hamptons, residential rents rose 12 percent in August. This was the highest annual increase ever recorded.
Chestertons, founded in 1805, was bought by the Mercantile Group in 2005.
Mercantile bought the majority of Humberts from administration in 2009 and combined Chestertons with Humberts, a company that focuses on selling and letting upmarket homes in London. In 2014, the company divided both brands once more.
Mercantile is also the owner of residential developer Wellingtons, and Springtide Capital, a mortgage broker.
Emeria will acquire Chestertons’ UK operations. Mercantile, however, will continue to own the other international operations of the company.
Mussa stated in a press release that 2023 is set to be the record year for our business. “[The deal] shows how we’ve transformed from a struggling, small agency into a resilient, thriving business,” Mussa added. Mercantile declined comment on the terms.
Chestertons, which was previously only nine branches in the UK, has now grown to 30 locations under Mercantile. Its global brand is present in 12 countries.
Chestertons revenue in the UK has risen from a low of £17mn (in 2006) to a record forecast revenue of £70mn (2023). According to the latest accounts filed at Companies House, turnover rose by 28 percent to £58.3mn, with earnings of £13.3mn.
Chestertons and Emeria released a joint press release in which they said that the deal would result in “substantial investments into the expansion of the 200 year-old business”, but refused to comment on price.
According to its website, Emeria generates more than €1.5bn annually and has 700 branches with 17,000 staff in eight countries. Emeria has several brands, including Knight Square Insurance in the UK and Campions, a lettings-and-management company.
Emeria has also been backed by TA Associates, a private equity group.