CoStar, a familiar name to UK commercial property investors and agents, is a leading provider of commercial real estate information. The company provides market analytics and an international online marketplace for property transactions.
As of yesterday the company announced the completion of its acquisition of OnTheMarket plc ranked number three in the UK’s three most visited residential property portals.
OnTheMarket was established by a collective of leading estate and letting agents to provide a reasonably-priced property portal, an effective alternative route to the online marketplace to the established market leaders, Rightmove and Zoopla.
CoStar made a cash offer of 110 pence per share for OnTheMarket Plc, valuing the company at around £99 million. The company’s shareholders’ voted on the takeover on 4 December 2023 when the scheme was approved by more than 94 per cent of its members.
Following a failed attempt by one objector, soundly rejected by shareholders, employees, and the court, which gave the all clear for the takeover to complete 12 December 2023.
CoStar Group’s acquisition of OnTheMarket will provide financial strength and the group’s online expertise. This will now be combined in the UK with OnTheMarket’s large network of estate and letting agents to create what is expected to be a major market disruptor in the industry, posing a not an insignificant threat to the other two established U.K. market leaders – Rightmove and Zoopla.
Andy Florance, Founder and Chief Executive Officer of CoStar Group told the media yesterday, following the deal’s completion:
“Today’s announcement gives us the opportunity to combine a leading UK agent friendly site with our technology, expertise, and capital to raise the game for online home shopping in the UK. The current market leader has grown complacent focusing on margin over innovation, and pricing ahead of value. The level of shareholder support we received is a major endorsement of our plans to invest in OnTheMarket.
“CoStar Group has been transforming the world’s real estate through digitization for over three decades. We are relentlessly focused on empowering our customers, delivering this through strong growth in our portals, as well as our data & information businesses.
“As we digitize the sector and continue to enhance the experience of all those we work with, we are also focused on our investments into Europe, a market that is moving very quickly. Our OnTheMarket acquisition sits firmly within this strategy, and we will bring all our experience to bear as we take OnTheMarket to new levels of success while keeping costs to advertisers at a sustainable level.”
The CoStar Group says it plans to incorporate OnTheMarket into its network of real estate platforms and marketplaces, investing nearly £47 million into a sales and marketing effort over the next 12 months. This, the company says will be around six times OnTheMarkets’ current annual media spend and over three times the equivalent spend by Rightmove plc.
CoStar certainly means business as it says this is just the first stage of a multi-year investment programme totalling hundreds of millions of pounds. This it thinks will drive more consumers to the OnTheMarket portal with the aim of driving more business to OnThe Market’s estate and letting agent clients.
CEO of OnTheMarket, Jason Tebb told the media on the deals completion:
“We are very excited to be joining CoStar Group, in a move which will see our business gain the backing of a proven product and technology market leader. We look forward to working together to accelerate our strategy, with the clear goal of becoming the market leader. To do so with a partner who shares our commitment to a fair and sustainable pricing model constitutes a huge step forward for our company”.
More details of the takeover transaction information can be found here in the UK Takeover Code Rule 2.7 Announcement filing
Over the last 20 years or so property portals have grown to become a transformative force in the way property is marketed in the UK and around the world. They have reshaped the way individuals buy, sell, and research properties. The leading online platforms have become central hubs for property-related information, connecting buyers, sellers, and real estate professionals in in ways that were unthinkable before the internet.
Property listings across the country and internationally are now instantly accessible to prospective buyers who can easily browse and research a wide range of properties from the comfort of their homes or offices, even on their “on-the-go” mobile devices. This enhanced accessibility has not only streamlined the property search and sales process, it has significantly expanded the market place, the national and international reach for vendors and agents.
These platforms instantly provide a wealth of information about properties with detailed descriptions, high-quality images, virtual (video) tours, and even neighbourhood insights which enables buyers to make quick decisions, even before they have viewed properties.
Advanced technology provides enhanced search filters to match a buyer’s exact requirements with properties and informs they via texts and emails when matched come up. Property professionals benefit through their use as a marketing tool, allowing agents to showcase their listings to a broad audience. Additionally, the data and analytics offered by these portals enable agents to refine their marketing strategies and understand market trends better.
The future developments in this field are likely to be even more striking with the integration of cutting-edge technologies: virtual (VR) and augmented reality (AR), virtual property tours, 3D floor plans, interactive visualizations and even AI will offer prospective buyers an even more immersive and engaging experience.
As these property portals evolve, incorporating the new technologies, they will refine their customer processes and will likely to remain key players as property marketing systems.