Sam White quits REA board to focus on the family business

Resolute silence from both real estate company Ray White and the wider industry has followed Sam White’s decision to quit the board of the REA Group, publisher of site realestate.com.au.

White quit the board after nearly nine years as a non-executive director. He was also a member of its HR committee.

His decision to step down has fuelled speculation that Ray White might throw its support behind a rival website.

Ray White, which has about 1,000 offices in Australasia, is a shareholder in Property Page, along with LJ Hooker, Raine & Horne and Century 21.

Property Page owns homehound.com.au with the Hannan family’s media and printing company, Independent Print Media Group.

In July 2009, Ray White ceased being a major shareholder in REA, selling most of holding for $77.6 million. It had been a major shareholder in REA, which operates realestate.com.au. It had acquired its 15.8% stake from Macquarie Bank in 2002.

News Limited owns 59% of REA, and Sam White retains a small holding of 0.44%.

Neither Sam White nor Ray White could be reached for comment yesterday, and other industry players declined to comment.

A spokesperson for the REA Group told Property Observer it had nothing further to add “at this moment” to a media release in which it thanked White for being a “vital member of the board since 2002, helping to guide the company in its transition from a small listed business to a market capitalisation of around $1.5 billion today”. 

The media release says White has stepped down “to focus on his family business, the Ray White Group”. 

The most recent REA annual report reveals that White attended just five out of nine board meeting in the 2011 financial year –fewer than all other board members, which include McGrath Real Estate boss John McGrath, the only other board member with direct ties to the real estate sector. 

White is the executive chairman of the Ray White’s mortgage broking arm, the Loan Market Group, which has grown into one of the largest aggregators with about 600 brokers writing about $600 million in mortgages each month.

In October last year REA came under attack from industry players over accusations that it was abusing its dominant market position to push through excessive price rises. It also angered agents by announcing that it would directly approach real estate agents’ clients to upsell ads.

Realestate.com.au has also faced more competition in the listings space with emergence of realestateview.com.au, which is operated by the state real estate institutes and which added to its NSW and Victoria sales teams in December.

In August last year, the West Australian newspaper group and the Real Estate Institute of Western Australia set up their own listings website for the WA market. The website, www.westrealestate.com.au, is owned by West Australian newspapers, with content and listings provided by the REIWA and its members.

A month later, the Real Estate Institute of Queensland began including state property listings on its website for the first time as part of a revamped website. Only members of the institute are able to list their properties on the website.

The increased competition has had little impact though on REA, with the group revealing revenue up 23% to $238.4 million in its 2011 annual results and net profit after tax up 37% to $67.5 million.

REA earns three-quarters of revenue from 9,500 estate agents who pay to list their properties on realestate.com.au and its other affiliated websites.

The company reported close to 200 million page views in the 2011 more than double that of its nearest rival Domain.com.au (91 million page views), which is owned by Fairfax.

Real estate commentary website Business2 reports that Domain.com.au has advised some clients it will increase advertising rates from February 1, 2012, with Andrew Blachut from PropertyNow.com.au saying the increase “is the equivalent of filling ones petrol tank today for $60 and then going to the petrol station tomorrow and being charged $1,800”.

Just before Christmas Fairfax paid $35 million to acquire a 50% share in Antony Catalano’s Metro Media Publishing business, publisher of Melbourne real estate advertising vehicle The Weekly Review.