Michael Toogood MD, Square Mile Property Mgt Ltd Searching for profits Revenues!

Armageddon or January? August ’07: The end of the world A blip in world growth – growing pains, or A fundamental change Cash not credit is king

August ’07:

The end of the world

A blip in world growth – growing pains, or

A fundamental change

Cash not credit is king

A fundamental change Right Move Northern Rock, Paragon, Humberts Winners and losers Erinaceous Source: Bloomberg

Right Move

Northern Rock, Paragon, Humberts

Winners and losers

Erinaceous

Typical estate agent Pre-November 07: Sales revenue 80 Lettings revenue 20 Total Revenue 100 Overhead 30 Staff 30 Marketing 20 Total costs 80 Profit 20

Pre-November 07:

Typical estate agent Post-November 07: Sales revenue 20 Lettings revenue 25 Total Revenue 45 Overhead 25 Staff 20 Marketing 20 Total costs 65 Profit -20

Post-November 07:

How to stay in business Grow lettings – at least double Cut costs Fire staff - yes Cut office rents – can’t Cut extras – MD’s Range Rover Cut marketing – yes, marginal portals Value the applicant not the vendor

Grow lettings – at least double

Cut costs

Fire staff - yes

Cut office rents – can’t

Cut extras – MD’s Range Rover

Cut marketing – yes, marginal portals

Value the applicant not the vendor

Marketing reductions Source: Toogood children, London SW17

Mystic mike’s top tips 1: Industry will learn to live with sales turnover of less than ½ 2: Lettings is the value driver 3: Relentless pressures to reduce costs 4: Acquiring prospective purchasers will consume all marketing $ 5: Fundamental change in delivery mechanisms – can big portals adapt? 6: Disappearance of marginal portals 7: Increased regulation 8: Tescos

1: Industry will learn to live with sales turnover of less than ½

2: Lettings is the value driver

3: Relentless pressures to reduce costs

4: Acquiring prospective purchasers will consume all marketing $

5: Fundamental change in delivery mechanisms – can big portals adapt?

6: Disappearance of marginal portals

7: Increased regulation

8: Tescos

…… ..impact on the web The consumer is confused and will become more so: Corporate websites Portals Portals of portals Vertical search engines Marketplace noise will make it more difficult and more expensive for portals/search engines to promote themselves Profit will be in lettings, less easy for web application to add value than sales How will players extract $ from devastated estate agency industry?

The consumer is confused and will become more so:

Corporate websites

Portals

Portals of portals

Vertical search engines

Marketplace noise will make it more difficult and more expensive for portals/search engines to promote themselves

Profit will be in lettings, less easy for web application to add value than sales

How will players extract $ from devastated estate agency industry?