Keller Williams Low-Key Entrance Into African Market

Keller Williams Low-Key Entrance Into African Market

South Africa has become the fastest-growing region in the world for the U.S.-based real estate franchising giant Keller Williams Realty, according to a report in BusinessDayLive.

The largest real estate agent group in the U.S. and the second-largest in the world, Keller Williams, made a low-key but successful entry into the South African market in 2013, BusinessDayLive reports.

“We are doing very well in South Africa,” said the group’s South African head, Neil Cronje. “We have 200 agents, which I believe will grow to 1,000 agents by the end of the year. The Keller Williams model is to have many agents in each office.”

The number of Keller Williams’s agents increased from 25,000 in 2005 to the current 95,000, despite the collapse of the American property market during the financial crisis of 2008. Other major real estate groups lost between 25 percent and 46 percent of their franchisees, Cronje told BusinessDayLive.

Keller Williams revolutionized the American real estate industry in the past 30 years, Cronje said. South African franchisees, which include well-known names in the residential property market, predict that the same will happen in South Africa.

“It is all about estate agents sharing contacts and work,” Cronje said. “Estate agents do not support each other enough. Also, in America, the same estate agent does not represent the buyer and seller. We intend to have agents working for a buyer in one deal and a seller in another.”

Keller Williams, which started selling franchises in 1991, became the largest real estate franchise in North America in 2013 and said its goal is to become No. 1 in the world in agent count, transaction and turnover. It has about 700 offices and 95,000 agents worldwide.

Keller Williams Worldwide President Chris Heller praised the South African team’s success.

“Our South African region is truly setting a new standard,” Heller said. “We are privileged to be in business with such talented real estate professionals.”

Cronje has worked in South African real estate for more than 20 years. He established Engel & Völkers, a European real estate group that specializes in the South African luxury market.

Keller Williams has 200 agents in 13 offices in South Africa based along KwaZulu-Natal’s north coast, in Pretoria, Gauteng and the Western Cape. The business model of Keller Williams in South Africa enabled successful franchisees and agents “to be really profitable,” Cronje said.

“Instead of forfeiting up to half of their commission to be part of a big group, they are, rather, independent entrepreneurs with the backing of a big international group,” he said. “Agents pay for the cost of support services, but only up to a point, after which they keep all their commission.”

Small and medium-sized enterprises financier and developer Business Partners said it expected unlisted commercial property to improve its yields relative to other asset classes. Business Partners Executive Director Gerrie van Biljon said direct property could be a haven this year.

Property economist Erwin Rode said capitalization rates this year would stay more or less where they were in 2013. He was worried, however, that consumer incomes would fall in 2014, dampening prospects for shopping center properties.