The move by Zoopla (the second largest property site in the UK) would help it to take on rival, sector leader Rightmove. Zoopla’s founder Alex Chesterman has long expressed his desire to take the number one spot: ‘I will keep no stone unturned to be number one, we got into the space to win, not to be the number two player,’ he told LondonlovesBusiness this time last year.
Zoopla has not confirmed its plans to list, but if its goes ahead, it will mean a handy windfall for Chesterman, who also got a tasty wad of cash following Amazon’s purchase of Lovefilm two years ago.
Some pundits have accused Zoopla’s £1bn plus price tag of being too generous and therefore a product of an overheating property market, with house prices reaching record levels in London.
Government programmes have helped to hike up the number of mortgages being offered to house buyers and the benefits are being felt the industry over.
Swanky estate agent Foxtons announced its plans to raise £55m through a flotation two weeks ago and house builders such as Taylor Wimpey, Redrow and Bovis have all enjoyed rising profits.
It’s not just the housing market which has been revving up lately, the flotation industry is also experiencing a burst of action thanks to rebounding markets and renewed investor appetite. Roll call of companies planning to list soon is, well, quite the list. The Royal Mail , Merlin Entertainments, House of Fraser, the newly birthed TSB, phone operator EE and insurer Saga are preparing for IPOs.
Estate agent Countrywide and house builder Crest Nicholson have both performed well since their IPOs earlier this year, Zoopla is no doubt banking on a similar performance when (and if) it debuts.
But analysts have warned it should approach with caution, citing Countrywide’s conservative flotation, as exemplary and saying sky-high valuations should raise ‘bubble’ alarm bells. With Chesterman’s appetite for supremacy and Zoopla’s current valuation, we doubt ‘conservative’ is a likelihood.