The wave of real estate portals takeovers: who's next... and how much will they cost?

Over the past year, an unprecedented wave of changes in ownership has shaken up the European online real estate landscape. From specialists such as OnTheMarket (UK) and Idealista (ES, IT, PT), to generalists such as Adevinta (DE, FR, ES, NL, BE, IT), there seems to be no end in sight, following REA's offer made public in early September 2024, to buy Rightmove (UK) as KKR Sept. 19 2024 announcement to acquire the Aviv Group. In light of these developments, we offer a non-exhaustive overview of the marketplaces potentially on the market, and the elements needed to establish their valuation*.

In Europe, real estate portals have historically attracted the attention of world class investors. There are two main reasons for this:

• The market is growing steadily, as traditional advertising channels are being replaced by Internet marketing.

• The fact that advertising is much more central to the real estate industry (compared to the automotive or job sectors), which subsequently enables higher prices per listing and volumes that are often higher than those of the other two major traditional classified markets.
  

This explains why so many players have been able to list on the stock exchange (Rightmove, OnTheMarket, Scout24, Adevinta, Hemnet...), or have been acquired by major funds (such as Zoopla, Idealista...).

A bonus for the leader

After an initial wave of purchases between 2019 and 2021, the market has seen an impressive number of transactions over the last months. Since October 2023, no fewer than 3 major players have changed hands, either specialized in real estate (OnTheMarket and Idealista), or generalist yet with a strong real estate component (Adevinta). Although only partially, we can also add to this list the acquisition by General Atlantic of a minority stake (24%) in Funda, the Netherlands' leading real estate website.

Since the beginning of September 2024, a fourth major name has joined the list: Rightmove. The UK leader is considering a proposed takeover by the REA group of the media giant, New Corp (already No.1 in the online real estate market in Australia and No.2 in the USA).

Three major trends seem to emerge

1. The choice to exit the stock market (Adevinta with the Permira and BlackRock funds, OnTheMarket with Costar group, as well as potentially Rightmove with regards to the REA group). Idealista has moved from one pool of funds (led by EQT) to another one (led by Cinven).

2. Company values on majority disposals in billions of euros/dollars/pounds - excluding OnTheMarket (>3 billion euros for Idealista, >4 potentially for Rightmove,>12 for Adevinta).

3. A clear valuation premium (measured as a multiple of sales or EBITDA) for market leaders (Adevinta, Idealista, Funda on a partial stake, and potentially Rightmove) vs. the market number two or three. At Joreca, we measure national rankings through the prism of the number of real estate agents that are active online (see methodology below).

   
   

Group	Main countries for Real Estate Portals	Active Agents Market Share (1)	Active Agents Market Position (1)
Adevinta	France	65%	1
Adevinta	Spain	46%	2
Funda	Netherlands	97%	1
Idealista	Spain	70%	1
Idealista	Italy	65%	2
OnTheMarket	UK	53%	3
Rightmove	UK	72%	1

Towards a wave of number 2s on the market? 

Will this “leader bonus” continue to hold true in the future? It's fair to ask this question, as several number 2s could be up for sale*. This trend could indeed be launched by the recent decision of KKR to acquire the Aviv Group. On September 19 2024, the private equity fund confirmed the shareholder restructuring at Axel Springer. A move that will lead to a division of the Group's assets, with its classified division, Aviv Group and Stepstone in Employment, being 100% taken over by KKR.

Whilst there is no current indication that such an operation will take place, it will be interesting to see how the Aviv Group would be valued. Focused on real estate, this player is second in Germany - its home market - with the Immowelt/Immonet pairing. In terms of agents, the position is the same in France, with the constellation of sites formed by the SeLoger group. It should be noted, however, that in this country the gap with the leader is much smaller than in Germany, and revenue per customer is higher than its local competitors. Only Immoweb in Belgium is the clear number 1 of this European giant.

A similar question arises for Zoopla in the UK. Faced with the takeover of number 3 OnTheMarket by the ambitious Costar Group and, potentially, the sale of Rightmove to the REA giant, what will be the reaction of the Silver Lake fund that bought the site in 2018? Similarly: what would be the value of Spanish publisher Vocento's Pisos.com, one of the only No. 3 sites with a sizeable market share in Europe?

Group	Main countries for Real Estate Portals	Active Agents Market Share (1)	Active Agents Market Position (1)
Aviv	Germany	49%	2
Aviv	France	60%	2
Aviv	Belgium	84%	1
Zoopla	UK	61%	2
Vocento	Spain	29%	3

What about the other No. 1s?

The bid for Rightmove, listed in London since 2006, came as a surprise to many observers. Scout24 has a similar profile: historically number 1 on a very large European market and listed on the stock exchange. If the REA Group operation succeeds in the UK, will it inspire ideas for a replica in Germany of its - by far - most dominant player?

Another hypothetical case in point would be the value of long-established, but now somewhat more challenged leaders. For example, this can be highlighted through Immobiliare in Italy (the continent's last major independent player), or AtHome in Luxembourg (owned by the Mayfair Equity fund), vis-à-vis companies in a virtual monopoly position like Sweden's Hemnet (listed on the Stockholm stock exchange), or, in addition, Switzerland's SMG (co-owned by two local media groups and General Atlantic).

Group	Main countries for Real Estate Portals	Active Agents Market Share (1)	Active Agents Market Position (1)
Scout24	Germany	73%	1
Hemnet	Sweden	98%	1
Immobiliare	Italy	71%	1
SMG	Switzerland	94%	1
atHome	Luxembourg	71%	1

Methodology (1) Source: Joreca panel and database for July 2024, only for real estate agents (excluding agents, new home builders, notaries, etc.) who have put at least one residential property up for sale or rent. (2) Funda's valuation is based solely on the price paid by General Atlantic, in February 2024, to acquire 24% of the company. (3) Rightmove's valuation is based on the global takeover offer issued by the REA group and made public on September 2, 2024. At the time of writing on September 13, 2024, this offer had still not been accepted nor rejected.

* Disclaimer: This article was written using Joreca’s data, public information, and expert opinion. Under no circumstances does this article constitute a solicitation, offer, opinion, approval nor recommendation by Joreca, to buy or sell any company share, nor does it provide legal, tax, accounting or investment advice, nor services regarding the profitability or suitability of any security or investment.