This month will see the launch of easyProperty – the latest addition to the multibillion-pound low-cost empire. Chief executive Robert Ellice tells Emily Wright how he will deliver returns of over 50% and shake up the “completely inefficient” existing market with what he dubs the “ultimate” property disruptor. Portraits by Tom Campbell
It was only a matter of time, really. From airlines to hotels and buses to gyms, it was almost inevitable that at some point the unmistakable orange and white bubble writing would infiltrate the property world.
On 17 September easyProperty will launch as the latest addition to the multibillion-pound easyGroup portfolio. And this next string to Sir Stelios Haji Ioannou’s low-cost bow is on a heart-stoppingly ambitious growth path. A growth path likely to raise more than a few eyebrows among the property fraternity. An online residential lettings business in the first instance, it aims to be a leading property company covering UK commercial real estate lettings and sales, with an international presence, all within two years.
A lot to get done within a timeframe so ludicrously short that many might dismiss it as entirely unrealistic – madcap even. Helpful then that chief executive Robert Ellice for one is supremely confident. “Things will move fast,” he says. “And growth will happen at a staggering pace. Starting with the online lettings, the average growth rate in this sector right now is already very fast – around 5-10% a month. We will exceed that pretty quickly. There is no reason why we won’t be seeing 2,000 lettings a month within the next 12-18 months.
“Our intention is to be the largest estate agent in the country by volume. Then we will move into other parts of the property industry.”
Here, the 39-year-old former estate agent explains how the group will be the ultimate property disruptor before becoming a serious player in the commercial property world by 2016 and insists that easyProperty is set to become the real estate sector’s new hero brand.
Confidence and exhaustion
Ellice’s unwavering confidence is overshadowed only by a hint of exhaustion. “I started talking to Stelios in October 2012 and since then there have been a lot of discussions over how the brand will work,” he says. “Then we have been building up the lettings site ready for launch and contacting landlords nationwide. I have been working solidly on this for 18 months, as the bags under my eyes might suggest.”
The initial concept is simple: a straightforward lettings site, nationwide from launch, managed and operated 24 hours a day. The site will cater for both landlords and tenants, offering services from property searches through to contract swapping, managing deposits and inventories and then liaising between the two sides over the duration of the tenancy where required – all via online services. It is, says Ellice, pretty similar to the way the group’s travel site works. Landlords pay only for the services they want and can pick and choose from the odd service here and there to outsourcing the entire management of the letting.
Ellice believes the elimination of standard agency fees and commission, replaced instead with its sliding scale charge and the flexibility of a 24-hour service, will shake up the residential property sector overnight, especially as the group already has more than 2,000 signed intentions from landlords across the country.?“I honestly thought it would ?be nearer 200 at this stage,” ?he says.
The fact that the group claims to be able to undercut traditional estate agents by 91% could have something to do with that. And Ellice isn’t expecting much of a welcome from existing players.
“This is the ultimate disruption,” he says. “The industry is completely inefficient as it operates ?now. It is in desperate ?need of a shake-up.”
And it’s a shake-up that won’t stop at high street estate agents. Ellice and Haji-Ioannou have grander plans than that.
Resi sales in the offing
The group is already focused on a move into residential sales within a matter of months. This part of the business will include a focus on legal requirements, mortgage brokering and other more human-resourced tasks requiring more phone and face time than the lettings side of the business. These will include services such as viewings and dispute resolution
And after that? “Next on the list will be commercial property,” says Ellice. “We will move quite comfortably into that within the next 18-24 months. And it will be exactly the same concept as the residential sites with the online basis.”
So should the likes of Savills, CBRE and JLL be quivering in their boots? “We are never going to be operating quite on that scale,” laughs Ellice. “Will we ever let a 60,000 sq ft office block in Berkeley Square? No. We will be looking at the SME end of the spectrum – at smaller retail and office units across the UK. And we will also be launching our own auctions website too.”
When it comes to how Ellice and Haji-Ioannou see all of this performing in terms of returns, it sounds like they have set their sights high – over 50% – thanks to low overheads and what they anticipate will be high demand. “Our turnover, profit and margins will be comparable to those of very good e-commerce firms,” says Ellice.
International expansion will follow directly from the launch of the commercial property arm, probably sometime in 2016. Six countries are on the hit list. “We already have licences to go into France, Germany, Spain, Holland, ?Italy and Greece. France is probably the first we would move into. After that, there is no set order and no definite timeframe – just that we want to start the roll out within the next two years.”
A disruptive force
Barely five minutes pass throughout the interview without the word disruption – a term often reserved for the trendy new Shoreditch and Hackney start-ups operating out of warehouse units – being mentioned. Ellice keeps coming back to the disruptive nature of the easyProperty business model, proving that the concept can be alive and well in a 300-strong, well-established (and very orange) office in Canary Wharf.
“I spent months examining how the property sector works and took it back to the bare bones to launch afresh. It’s a launch that uses the technology we have available to make people’s lives simpler and more efficient.”
And he doesn’t fear a backlash? easyGroup may be successful, but this is still a no-frills brand. While people might be happy to save money on a short-haul flight that will affect their lives only fleetingly, will they feel the same when it comes to something as long-term as property?
“The easy brand has a 99% penetration rate in the UK already,” says Ellice. “People know it and feel comfortable with it. They know what we stand for. We aren’t budget. We are low-cost. We fit a lifestyle and, from the reaction we have already had, there is no reason for me to worry.
“We have already been approached by a number of corporate landlords that have faced issues managing properties on a national basis and have shown a lot of interest in what we are doing and the way we will control everything across the country from one headquarters.
“It is a model that will work on an individual property or across a portfolio of hundreds. And ultimately it’s corporate landlords that will benefit the most.”
He adds: “And the property sector needs a hero brand.” A what? “A hero brand is one with an identity with an all-encompassing purpose. In effect, a brand people truly identify with. A people’s champion, if you like.”
So is he suggesting easyProperty is set to be just that? “Of course. There is not one brand in the sector with complete control. We are coming in with one brand and will be poised as property, particularly the residential side, consolidates rapidly over the next decade.”
Watch out world, your knight in shining orange armour is fast approaching – whether you think you need it or not.
Robert Ellice’s easy living
Worst property I have ever lived in?
A flat above a hardware shop in Dartford ?on the very noisy one-way system. There were about ?10 of us in there.
Any crazy parties?
Yes, quite a few in that particular flat.
What is your biggest home-related luxury?
?My stereo system.
Favourite room in the house?
Definitely not the kitchen. The living room probably.
If you could buy a property anywhere in the world where would it be?
The South of France.
Chateau or chalet?
Chalet.?
emily.wright@estatesgazette.com
