Wednesday 20 June 2018

Purplebricks sets its sights on New York as it takes on America

The group has opened an office in Midtown Manhattan and is recruiting local estate agents ahead of a launch in the second quarter.

Purplebricks is launching in New York as it continues its US expansion plan.
Purplebricks is launching in New York as it continues its US expansion plan.

By Holly Williams, Press Association Deputy City Editor

Online estate agency Purplebricks is launching in New York as the group ramps up its US expansion plan.

The group said it had already opened an office in Midtown Manhattan and was recruiting local estate agents ahead of a launch in the second quarter.

It comes after Purplebricks – backed by renowned fund manager Neil Woodford – launched in the US last September as part of a rapid international expansion programme.

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The firm has already opened bases in Los Angles before expanding into San Diego, Sacramento and Fresno this month.

The group also operates in Australia.

Its move into New York will see it tap into the city’s high-commission and buoyant property market.

The launch will also see it enter the biggest so-called designated market area in the US, covering 31 individual counties, with more than 7.4 million households and over 20 million people.

The New York housing market was particularly attractive to the group as it sees estate agent commission reach as high as 7%, with average property prices of around $561,000 (£398,000) and sales levels that are double the national average.

Its US team is being led by Eric Eckardt and Phil Felice, with support from founding brothers Michael and Kenny Bruce.

Michael Bruce, chief executive of Purplebricks, said: “It is a sign of confidence in the potential of the US business that we are today announcing our expansion to cover both the East and West coast, with our planned entry into the New York market.

“With higher than average rates of commission and transaction volumes, New York was the natural first move on the East Coast for Purplebricks.”

Shares lifted 4% on news of the New York launch.

Purplebricks said it believes it can save New York sellers thousands of dollars by undercutting the commission currently charged.

Similar to the UK and Australia, buyers will be able to arrange showings, submit offers in real time and negotiate sales on properties with the click of a button.

The group upped its UK sales guidance last month after investment helped drive six-month revenues up a startling 150%.

But higher administrative expenses bit into pre-tax profits, with losses widening from £6 million to £8 million in the six months to October 31.

Press Association

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