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The Warsaw Voice » Real Estate » August 26, 2010
The Real Estate Voice
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Giant Joins the Fray
August 26, 2010   
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A new real estate agency called Metrohouse & Partnerzy is preparing to enter the market. The agency is a joint project by Metrohouse company in Warsaw and Partnerzy Nieruchomości in the Gdańsk-Sopot-Gdynia Tricity area. The partners have been brought together by a shared business philosophy and a decision not to charge commission from buyers. Mariusz Kania, chairman of Metrohouse & Partnerzy, talks to Magdalena Fabijańczuk.

Metrohouse & Partnerzy describes itself as the largest real estate agency in Poland. What are the figures to back this claim?

The size of an agency is best reflected by its sales volume, the number of transactions the agency handles and the number of employees. We now have 420 agents working for us and the number will reach 500 by the end of this year. This is a good indicator for a company when 500 people have two appointments per day on average. No real estate agency has more than 500 agents at the moment and this is also a record number when you look back. Last year was said to be a crisis year, yet [my company] Metrohouse still managed record high sales. After the merger this year, our sales will almost triple compared with the previous year. How can this be, I hear you ask. We have enlarged our corporate structure and changed our operating methods. I also believe that the market is not as bad as some thought it was just a year or two ago.

The decision to merge was made at the end of 2008, just as the global financial crisis began and companies were preoccupied with economizing instead of developing. Weren’t you taking a risk?

The fall of 2008 showed the market for real estate was in a lot of trouble. You had to act in order to survive and to survive in good shape. The first thing that came to our minds was to revisit an idea from the early days of Metrohouse, namely, stop taking commission from buyers. I also came to the conclusion that we needed to talk to our competition who were, after all, coping with the same problems, and start doing something together. I approached several real estate agents out there on the market, including Partnerzy Nieruchomości, who just like us were starting to pursue the method of charging a commission from just one party in a transaction. We also talked to Emmerson, which resulted in the Polish Chamber of Real Estate, established in April this year.

There are many organizations which bring together real estate agencies. Will another one change anything?

I hope it will. So far, 130 companies have joined the Chamber. Real estate associations in Poland work on similar principles, gathered around small agencies that hire several people. Such agencies have a totally different outlook on the real estate market than we do. When people open an agency to create jobs for themselves, they are not inclined to make various concessions and investments. We fully realized that when we stopped taking commission from buyers. Other companies in our sector could not deny the logic in our move, but they did not support it. Meanwhile, studies conducted in the past several years have shown that a mere 20-30 percent of buyers are willing to pay commission to an agency, while the rest would rather spend some extra time searching for apartments on their own. The internet is an increasingly popular search tool and so traditional real estate offices will face more and more problems as direct sales increase in frequency. This is similar to banks where you do not have to pay for an online bank account, because you make bank transfers yourself. Real estate agencies can gain an extra 70 percent of customers, who are out there on the market. We want to appeal to these customers and, needless to say, this is bound with lower margins on individual transactions and harder work to make the same money we did so far. But I am not afraid of that and here is where the business philosophy of small real estate agencies differs radically from that of companies like Metrohouse.

Returning to the merger, what made you choose Partnerzy Nieruchomości?

Teaming up with Partnerzy Nieruchomości gave us three main things. To begin with, we gained an ideal manager in Michał Kosiedowski, the owner of Partnerzy Nieruchomości. We expanded our team to include a man who has for years run his own company and proved his efficiency at it. Enlisting someone like this is as important as raising extra funds (...) Second, we gained a working business operation in Gdańsk, which saved us a lot of time, a priceless thing in business. We could have perhaps built a chain of offices from scratch in the area, but that would have taken us two or three years. Third, as we expand in the Pomerania region, we no longer have to struggle against our biggest competitors there, that is, Partnerzy Nieruchomości.

Metrohouse & Partnerzy wants to develop fast. What cities are you eyeing as part of your expansion drive?

The market for real estate is very local and you have to take this into account as you build a company. Many of our competitors focus on geographical coverage, which means they want to open offices in every big city. Our business philosophy is different. This year, we will deliberately skip Katowice, Łódź and Cracow, even though we could easily open two offices in each of these cities in the coming months. Instead, we will concentrate on Wrocław and Poznań, opening a dozen or so new offices in both by the end of 2011. We will start working in Cracow and Katowice next year. Our main efforts will focus on large conurbations, while in smaller cities we will develop offices as part of a franchise chain
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