Realla's CEO updates on the company's plans after it joined the CoStar Group last month
Since the acquisition of Realla by CoStar Group, which completed about six weeks ago, many people have asked me "what’s next?" I thought now was a good time to set out our stall, writes joint founder and CEO Andrew Miles.
We’ve spent a lot of time since the acquisition with the management of CoStar Europe, and also the leaders in the US, agreeing a direction of travel.
Firstly, before setting out our stall, it is useful to recap the state of the UK commercial property portal landscape in which we play, which in turn reveals why CoStar wished to buy Realla, and it points to our strategy for the future.
The market remains exceptionally fragmented versus norms in other industries (think Rightmove and Zoopla in residential; Autotrader in cars).
The reasons for this fragmentation is that no company has succeeded in creating a high quality and exclusively commercial property portal in the UK. This is easy to say but very hard to execute on, because it requires large amounts of capital, several years of time and very specific skills (ranging from data gathering and cleansing, to search engine optimisation, to purchasing advertising, to building a quality interface). The existing businesses all fall short on this. They either have: no money; or no quality technology; or are focused on residential. Many suffer from all of the aforementioned.
So for the UK, Realla’s mission is simply to give the industry the world-class, dedicated commercial property portal it deserves. We aim to become the best place for tenants across all sectors to search, and the best marketing partner for the industry.
The search architecture is being built with a tenant-first mentality; and the ‘back end’ advertising tools for agents and landlords are being built with an ROI driven mentality - advertisers should have transparency over whether their spend is generating them leads. In other industries this is expected; in UK commercial real estate it remains a pipedream. But not for much longer…
In the US, CoStar has earned a reputation for building successful marketplaces, including Loopnet (in commercial property) and Apartments.com (in apartments/multifamily). When CoStar acquired Apartments.com it was the third most popular marketplace in the sector. It is now number 1, and has arguably elevated the multifamily sector’s image, historically seen as a poor relation, by providing it with a strong public facing portal. Being part of the CoStar network, with its awesome resources, will help Realla achieve its mission.
Every day, Realla benchmarks its traffic and leads against its competitive set. This means anyone competing for commercial real estate searches on Google, other search engines and social media, and includes about 12 other portals and serviced office brokers. In the last 30 days, supported by increased marketing spend since the acquisition and links to CoStar’s family of market places in the US, Realla grew traffic by 55%.
Early next year, Realla will become the clear number one dedicated commercial property portal in the UK measured by both traffic and leads. But we will not stop there. We are in the process of hiring additional software engineers and have a huge marketing plan for next year. There is a still a vast amount of work to be done to move from being number 1 in a weak market to having a truly world-class platform that tenants and industry participants will want to use.
Building a world-class platform is what excites my co-founder and CTO Ian. And what excites me is improving the initial tenant search, and hopefully in time delivering a great service to agents and owners. The latter stages of the tenant search are well supported by agents and solicitors, and for larger deals will always be professionally advised. But the upfront discovery process – “getting a feel for what is out there” – is currently appalling due to the lack of a good portal, and it lets our industry down. This needs fixing.
Andrew Miles, CEO, Realla
The article was published originally on CoStar New - Read it here.