In a commercial property market dominated by the Big Four, how does a small firm survive?
The right moves
The market is dominated by the big brand agents and I have the impression that the biggest four or five agents are probably increasing their long term share of the market. However a large swathe of the market continues to be handled by smaller firms, headed by entrepreneurial agents, often coming into property from non -traditional routes and I spoke with the bosses at a Dublin and a Galway agency to find out what life is like for the smaller firm.
Paddy Markey is originally from Belfast and has a degree in psychology from Trinity College, and a Masters in Management and Organisation. He always had an interest in property but it was his interaction with agents whilst buying and selling his apartment in London, where he was a management consultant, that ignited his interest in the business. He returned to Dublin in 2003, worked as an agent with Remax and built up a management portfolio of 120 properties. In 2009 he founded Herbert Property, located on High Street, Dublin 8.
The firm handles residential and commercial sales and lettings and now manages a portfolio of 500 properties. Along the way Mr. Markey qualified as a chartered surveyor and he now employs six people. Paddy Markey told me that he loves the sense of satisfaction of building something, the autonomy in running a company and employing his staff, to whom he feels a great responsibility. "Sometimes working 80 hours a week for yourself is better than working 40 hours a week for someone else." he said.
Like many firms during the recession, Herbert Property received lots of instructions from rent receivers and banks and with that work set to reduce, his focus now is on building up instructions from private clients. "Small firms have to offer something different and for Herbert Property that is a highly personalised service. The client knows exactly who they will be dealing with-every property is crucial for us and gets the right amount of attention."
A big issue for Paddy Markey is the difficulty in finding extra staff and rising salaries. "We can't take on unlicensed staff and the Property Regulator should make it easier for other professionals to transfer into the property business. But smaller firms can't afford the luxury of employing negotiators who just handle sales, as might be the case in a large company. Our negotiators have to be able to introduce their own business and hit the ground running."
Running a business means Paddy Markey has to balance his selling skills and his administration skills as he doesn't have the back-up of a large organisation. "You cover more bases, he says, it's multitasking."
In my experience some of the most effective property people did not come through the classic property college route and Mr. Markey agrees that his psychology degree, management qualifications and experience in different business environments gives him a different perspective on life, people and running a business.
In Galway, O'Donnellan and Joyce sold over 600 properties last year, a record number since the firm was established in 1982. Founding partner Colm O'Donnellan told me that they have competed with the national brands by establishing an expertise in holding large multiple property auctions. Whilst they sell properties from Donegal to Kerry, most of their transactions are in Connaught. These six or seven large auctions per annum are all handled from the firm's base in Galway city and Mr O'Donnellan told me that they see no need to establish multiple branch offices.
The rapidly growing firm has 17 staff which they supplement with large numbers of part-time staff to service viewings. Unusually, Mr O'Donnellan says that recruitment is not a problem for the company. They have recently recruited four new people and he says that the attraction of living in Galway has seen several staff join them from bigger firms in Dublin.
Colm O'Donnellan and his partner Tony Joyce say that they are "very hands on" in managing both the properties for sale and the operation of the business. However, they also take advantage of outsourcing opportunities and for example their marketing is handled by specialist consultants.
It appears to me that that local ownership of property is increasing again as the overseas funds take profits and Irish buyers regain confidence. Firms which are not national brands will continue to play an important role and in an increasingly competitive market they can capitalise on their personalised service and local knowledge.