KKR and TPG eye PropertyGuru takeover

May 27, 2024 | 17:11
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KKR & Co and TPG Inc are said to be considering buying out the Singapore-based online real estate platform PropertyGuru, according to a Bloomberg report on May 22.

“The US private equity firms are working with a financial adviser to help gauge initial interest from other global investors in New York-listed PropertyGuru, the people said, asking not to be identified because the matter is private,” the newswire said.

KKR and TPG eye PropertyGuru takeover

KKR and TPG, which own about 26.5 per cent and 29.6 per cent of PropertyGuru, respectively, could opt to buy the remaining shares they don’t already hold, it added.

However, the considerations are preliminary, and no final decisions have been made.

Established in 2007 PropertyGuru provides online property search services in markets including Singapore, Malaysia, Vietnam, Indonesia, and Thailand.

PropertyGuru went public in New York in 2022 after a merger with Bridgetown 2 Holdings Ltd., a special purpose acquisition company backed by billionaires Richard Li and Peter Thiel.

On May 21, PropertyGuru announced its financial results for the quarter ending March 31, 2024, with a revenue of S$37 million (around $27 million), an increase of 12 per cent on-year.

The company also reached a net loss of S$6 million ($4.4 million) in the first quarter, and adjusted earnings before interest, taxes, depreciation, and amortisation (EBITDA) was S$4 million ($2.9 million).

Hari V. Krishnan, CEO and managing director, said that across Southeast Asia, it has seen governments introduce robust policies and budgets to accelerate growth, resulting in uplifted property sentiment.

“In the first quarter of 2024, we delivered double-digit revenue growth, with the Singapore business showing particular strength,” Krishnan said in his latest statement released on May 21.

In Vietnam, Krishnan saw a gradual improvement in the property market towards the end of the quarter, with listings on the platform hitting a 12-month high in March.

“I am also proud to share that we have released our first sustainability report. This is supported by the recently launched ‘Gurus For Good’ programme, our sustainability mandate,” he said, adding that this year solutions will play a bigger role in empowering customers as it powers communities to live, work, and thrive in tomorrow’s cities.

Joe Dische, CFO, added “PropertyGuru delivered a solid start to 2024 with double-digit revenue growth and flat costs on-year, leading to double-digit adjusted EBITDA margin, while navigating a phased recovery in Vietnam and Malaysia as well as typical seasonality in Southeast Asia during the first quarter, which includes the Lunar New Year holiday.

We remain cautiously optimistic for the year ahead. The Singapore business continues to perform, and we are seeing positive signals coming from Vietnam and Malaysia. While awaiting further improvement in secular trends, we are laser-focused on managing costs and improving profitability.

Dische added that all of its businesses showed marginal improvement on-year.

“Corporate expenses as a percentage of overall revenue decreased from 43 per cent in first quarter of 2023 to 40 per cent this quarter, as we continue to show improved operating leverage,” he said.

For the remainder of 2024, selective hiring and focused investment will remain its mantra.

“We plan to continue to invest in automation, leverage our existing technologies and generative AI to both provide superior customer experiences and manage our cost base as we drive continued revenue growth,” he said.

The company reaffirmed its full year 2024 revenue outlook of between S$165 million ($122 million) and S$180 million ($133 million).

PropertyGuru is the proptech leader across all five markets in the region, including PropertyGuru in Singapore and Malaysia, batdongsan.com.vn in Vietnam, DDproperty.com in Thailand, and Rumah.com and RumahDijual.com in Indonesia.

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