Emaar Properties has sold all of the European and Asian branches of Hamptons International, the property agency it bought in 2006.
Emaar sells major portion of property firm bought in 2006
Emaar Properties has sold all of the European and Asian branches of Hamptons International, the property agency it bought in 2006. More than 80 branches will be transferred to the UK company Countrywide for an undisclosed sum. Emaar will retain and operate the branches in the MENA region. Countrywide, the UK's largest property agency, also bought the rights to expand the brand internationally.
Ahmad al Matrooshi, the managing director of Emaar, said the agreement was "part of a strategic approach to realign and reposition our property services portfolio in key geographic growth areas". The move comes as Gulf developers deal with a dramatic property downturn that has led to projects being stalled across the region and major losses for some developers. Emaar is one of the best-performing companies in the market because of strong revenue from its hotels and malls.
But the sale of part of Hamptons International may be a sign that the company is under pressure to raise cash as sales remain low in the region, said Saud Masud, a property analyst with the Swiss bank UBS. "It's a smart move considering what's going on in the wider market, but it also tells you that the international expansion of Emaar could be coming under pressure," Mr Masud said. "At the end of the day it's another step to generate liquidity. They may have had to sell it whether they wanted to or not."
Emaar bought Hamptons International for Dh563 million (US$153.2m) in 2006 from Wheelock Properties as part of Emaar's major expansion into global property markets. About the same time Emaar bought John Laing Homes, a major US homebuilder, for $1.05 billion. As the market turned in late 2008, some of these expansions began to fall apart. John Laing Homes filed for Chapter 11 bankruptcy protection in February last year after US home sales waned. The planned public offering of stock for Emaar's India unit has been delayed for years.
The acquisition fits into Countrywide's efforts to grow into new markets during the downturn. "This acquisition is a major breakthrough for both companies - they are a perfect fit," said Grenville Turner, the group chief executive of Countrywide. "We identified that Hamptons International offers a key growth opportunity and we recognise the quality of its brand, its people, its branch locations and international credentials. The acquisition forms a key part of Countrywide's strategic plan to further expand into the prestigious high-end property market after the recent purchase of the Sotheby's International Realty franchise in the UK."