SRX operator sues major consultancies over its valuation service

SINGAPORE (THE BUSINESS TIMES) - Various property consultancies JLL, Knight Frank, Edmund Tie & Company, CBRE and Teho Property Consultants have become embroiled in the outstanding lawsuit filed by StreetSine Singapore Pte Ltd against the Singapore Institute of Surveyors and Valuers (SISV).

Since an original writ of summons filed last year with SISV as the only defendant, a new writ of summons was filed this week with 27 defendants including council members of SISV's valuation and general practice (VGP) division, certain individual members of the institute, as well as SISV's disciplinary committee members and staff.

The property consultancies are also named among the defendants as StreetSine sees council members of the VGP and Institute members as representing both SISV and their respective valuation firms.

StreetSine alleges "conspiracy" among the defendants to injure its business and reputation by intentionally misrepresenting to the public, the banks and financial institutions that the valuations which it generates are "not considered valuations" according to SISV standards and guidelines.

Among its key claims, StreetSine also alleges "malicious falsehood" by SISV, council members of SISV's VGP division and two SISV staff in issuing a press statement that conveyed the false impression that StreetSine's valuation service is not compliant with SISV's guidelines and therefore not recognised by the Institute.

Represented by law firm Wong Thomas & Leong, StreetSine claims that SISV abused its dominant position in the real estate sector, in breach of Section 47 of the Competition Act.

Some defendants approached by BT confirmed that they have received the writ of summons but declined to comment further. They are expected to file their statement of defence within the next three weeks.

StreetSine, a 60 per cent subsidiary of Singapore Press Holdings, runs the digital platform SRX Property that publishes property indices and listings as well as offering data analytic tools. It has in recent years branched into valuation services, which has become the crux of this lawsuit.

In its statement of claims, StreetSine said that it developed the SRX Valuation Engine in 2013 with a grant from the Infocomm Development Authority of Singapore but could not commercialise it due to alleged pressure from Teho, JLL, Knight Frank and DTZ (the former name for Edmund Tie & Company) on the VGP Council to ban valuation firms from using SRX Valuation Engine.

This valuation engine was then converted into an automated valuation model before it became a new valuation service in May 2015.

The new valuation service combines computer-generated values with the human expertise and experience of a licensed appraiser, with each valuation report signed off by a licensed valuer. StreetSine calls this new service "X-Listing Price", which was launched in January 2016 to real estate agents and consumers with the objective of making valuations less costly and more accessible to retail consumers.

At or around the same time, StreetSine had applied for membership with UOB, OCBC and Hong Leong Finance to become a member of their valuation panels. StreetSine also took part in a tender by Sentosa Development Corporation to provide rental valuation services for properties in Sentosa for two years.

Though it tendered at the lowest bid among seven firms, StreetSine was told that it was not awarded the contract as it was not a firm member of the SISV.

At a meeting on Jan 29, 2016 with real estate agencies that provide transaction data for SRX Property indices, Streetsine received feedback that "there was growing concern that the plaintiff was severely undercutting the market price for valuation services". In April that year, SISV issued a press statement which stated categorically that it does not recognise computer-generated valuations.

Following this, UOB, OCBC and DBS ceased all further discussions with StreetSine while Hong Leong Finance was considering removing StreetSine from its valuation panel.

StreetSine claimed that it has lost a potentially lucrative revenue stream and "is unable to market its valuation products to any other banks, financial institutions or the public in any meaningful manner within Singapore or overseas". Its ability to raise capital for expansion and recruit staff, as well as its investment valuation has become severely affected, it added.

SISV is a professional body here representing mainly land surveyors, quantity surveyors, valuers, real estate agents and property managers. It has close to 900 members under its VGP, of whom some 650 valuers are licensed under the Appraisers Act.

It also runs a property listing website and provides property data on SISVREALink; in August last year, it launched price indices to track resale transactions of completed condominiums in the suburban region.

In 2014, SISV's revenue from data services was S$716,051, contributing 40 per cent of the institute's total revenue. By 2015, SISV's revenue from data services had declined by 20 per cent to S$571,198, contributing about one-quarter of the institute's total revenue.

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