Sunday 12 September 2010 10:24 pm
Foxtons set to open 20 new branches
ESTATE agents Foxtons is to launch an ambitious expansion drive almost doubling the number of branches it currently has after returning to profit. The move will aim to increase Foxton’s presence in its core markets of London and the Home Counties. Last year BC Partners, the private equity firm which bought Foxtons for £360m just before the credit crunch in 2007, ran into difficulties repaying annual interest of £30m on the loans it received from two banks to finance the buyout. It was forced into a debt for equity deal, which saw the two banks, Bank of America and Mizuho, collectively take a majority stake in the estate agent in return for writing off £180m of debts. BC Partners remains the largest minority shareholder.
Foxtons’ most recent set of accounts showed a profit of £16.7m so far this year compared to a loss of £900,000 for last year.
The estate agent is now planning to launch 20 new branches over the next three years taking the total to 50 with most branches being opened in the London area and Surrey.
The aim of the expansion drive is to provide Foxtons with market share while transaction levels remain weak. Recently the estate agent opened its 27th branch in Streatham, south London.
The estate agent relies on generating fees from new instructions to sell or rent but when it opens a new branch Foxtons waives commission on new instructions for up to three months to gain share in a new area and secure sales.
“We are heading for a good financial year again, with both our sales and lettings performing strongly. The signs are that we are increasing market share with our existing branches,” Michael Brown, chief executive of Foxtons, told the Financial Times this weekend.
“We see a good deal of organic growth potential and we are actively opening new offices to expand into London areas we’ve not been in before.”