PropertyGuru Cancels Plans of Australia IPO
PropertyGuru, a Singapore based property portal, released a statement today that revealed their cancellation plans about the proposed initial public offering (IPO) in Sydney. The IPO, if agreed to, would have raised nearly A$260m but got cancelled due to “uncertainity issues in the current IPO market”
As per the CEO of PropertyGuru, Hari V Krishnan, “the revenue of the portal has increased at a 26 percent compound annual growth rate in the past three years.” He added that year 2018 saw Property Guru becoming both EBITDA and free cash-flow positive.
In the statement released, the Chairman of PropertyGuru, Oliver Lim said, “Despite strong engagement throughout the process with prospective investors, the board and existing shareholders have determined not to proceed with the offer.” He reaffirmed that the decision has been taken after considering the current IPO market sentiment.
Even after repeated requests to respond on the issue, private equity groups such as KKR and TPG, who together own a stake worth 58 percent in PropertyGuru, refused to comment.
A person familiar with the plans of PropertyGuru said, “The economy [in Australia] is soft, the housing market is sketchy and recovering from a big drop, consumer sentiment isn’t great, and plenty of people think the market has peaked.”
However, PropertyGuru claims that despite the changes, they will maintain a positive outlook about the future performance of the business. As per them, the firm does not need any new funds to comfortably run its current business operations.
The prospectus filed with the Australian Securities and Investment Commission on October 7 revealed the IPO of PropertyGuru setting an indicative price range of A$3.70 to A$4.50 apiece.
Many more firms like PropertyGuru have backed out from proposed IPOs. For instance, Latitude backed by KR, was supposed to raise A$1bn, aiming to make the biggest Australian listing this year. Some small firms also shelved their plans. The juice making company Bain Capital has also recently announced its withdrawal from the IPO.
As per a survey recently conducted by PropertyGuru, more than half people surveyed wanted real estate prices to be regulated by the Singapore government, as nearly 8 out of 10 people find private property expensive despite a regular raise in the supply.
Nearly 58 percent of respondents wanted the Singapore government to regulate prices from 49 percent in H2 2018. Moreover, 36 percent people believed that the condominium rents must be decreased overall. As said by the Country Manager of PropertyGuru, Tan Tee Khoon, “Competition amongst landlords is on the rise with over 25 condos obtaining Temporary Occupation Permit this year.”
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