PropNex to raise $40m from IPO: Report

PropNex Realty chief executive Mohamed Ismail Gafoor holding a meeting with some of his sales staff. After a merger with Dennis Wee Group last year, PropNex is now the largest property broker in Singapore by salesforce, with more than 7,200 agents.
PropNex Realty chief executive Mohamed Ismail Gafoor holding a meeting with some of his sales staff. After a merger with Dennis Wee Group last year, PropNex is now the largest property broker in Singapore by salesforce, with more than 7,200 agents.ST FILE PHOTO

PropNex Realty, Singapore's largest home-grown property agency, is said to be looking to raise $40 million from a proposed initial public offering (IPO).

The company is targeting a market capitalisation of as much as $250 million, Bloomberg quoted sources as saying yesterday.

It is understood that the listed entity is likely to have a market capitalisation of below $300 million, since it is said to require at least 25 per cent of post-invitation share capital in public hands.

The IPO is expected to include the business of PropNex International, the project marketing arm of PropNex Realty in which property consultancy JLL has a 20 per cent stake.

The IPO launch could be as soon as next week and the listing may be as early as the end of June, Bloomberg reported yesterday. The listing price is reported to be in the range of 62 to 68 cents apiece.

The last time PropNex Realty sought to undertake a public listing was believed to be around 2010-2011, after it switched its auditors to KPMG, a big four audit firm. But the plan was put on the back-burner following a series of property cooling measures.

After a merger with Dennis Wee Group last year, PropNex Realty is now the largest property broker in Singapore by salesforce, with more than 7,200 agents.

Amid a residential market upswing, PropNex has already secured around 20 project marketing jobs from developers this year.

Last year, its agents clocked more than 56,000 transactions, up from 46,229 in 2016.

Consequently, PropNex Realty's after-tax profit of $8.7 million more than doubled from $4.17 million in 2016 on the back of a 47 per cent surge in revenue to $341.32 million.

Similarly, its project marketing arm PropNex International clocked $8.98 million in after-tax profit in 2017, a 149 per cent surge from a year ago, as revenue jumped 168 per cent to $115.32 million.

PropNex's IPO is coming on the heels of a successful listing of APAC Realty, which raised $58 million from its Singapore IPO last year. APAC Realty's real estate brokerage services are operated by its wholly-owned unit ERA Realty Network under the ERA brand.

Despite a share price correction since March, APAC Realty's stock is still 43 per cent above its IPO price of 66 cents. In comparison, Singapore's benchmark Straits Times Index was up 5.9 per cent over the same period.

A version of this article appeared in the print edition of The Straits Times on June 02, 2018, with the headline 'PropNex to raise $40m from IPO: Report'. Print Edition | Subscribe