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Our little family business has come a long way

Graham Bayley was 50 years old when he established Bayleys Real Estate in late 1973 with his wife Pam and son John in the basement of their family home in Pakuranga. Fifty years on that tiny business has grown into one of New Zealand’s most recognised real estate brands having expanded from just three staff to close to 2,500 people in over 100 offices across the country with a presence also in Fiji.

Graham had spent nearly three decades of his working life as a farmer having initially acquired a rehabilitation farm in the King Country at the age of 23, following three years of distinguished service as an RNZAF fighter pilot in World War II. Then in the late 1960s, he decided on a career change, joining Hamilton real estate firm Matthews & Hyde as a rural agent where he was later joined by son John then in his 20s.

They then decided to establish their own real estate company in fast growing South Auckland in September 1973, persuading some Waikato developer clients to also head north to undertake housing subdivisions that Bayleys would sell for them.

Bayleys’ first transaction involved a modest house in Manurewa, sold by John Bayley to State Advances to add to the state housing stock. Memories are hazy about the actual sale price but what has been remembered is that the sale generated $300 worth of commission (around $6,000 in today’s inflation adjusted money) – and that it was celebrated. Many more celebrations were to follow!

In 1974, Graham and Pam’s second oldest son David joined the business, which was by then based in a new office building at 89 Great South Road, Papatoetoe. He took over from Pam as financial controller, as well as project managing the increasing number of new residential subdivisions Bayleys was being asked to sell houses in. This freed up John and Graham to focus on business development and in particular strengthening Bayleys' growing presence in the commercial and industrial property market.

A “city” office was also opened in Symonds Street in the early 1980s, with CBD office leasing and sales activity booming off the back of radical deregulation of the economy and financial markets by a new Labour Government in 1984. A new residential division was also established in this office in 1986, focused on the higher value end of the Auckland market. Its first recruit was David Rainbow who remains Bayleys longest-serving residential agent.

The long property slump that followed the sharemarket crash of 1987 forced the Bayleys to rethink the way they operated. “I’d spent the first 15 years in the game putting things around the wrong way; like all agencies in those day we were effectively taxi drivers working for buyers,” said John Bayley now the company’s Executive Chairman. “We’d mostly just sign a buyer up and hope like hell the deal would stick. It was a terrible business model that would no longer work in a market where the banks and receivers were taking control and wanted to know that we were working for them. We were the first agency to change the focus from buyers to actively marketing property for vendors and as a result, sellers were coming to us.”

Turning things around in the 1990s

A variety of other transformational initiatives in the 1990s helped fuel Bayleys recovery from the dark days of the late 80s and eventually contributed to a decade of phenomenal growth for the company. These included the creation of a Project Marketing division, initially to address a 30 percent vacancy rate in Auckland CBD office buildings in the early 1990s by converting some to strata titled apartments. This quicky developed into a billion-dollar sales business involving the marketing and sell down of large-scale projects encompassing thousands of residential and hotel apartments, terrace housing developments and master planned residential subdivisions. Bayleys also introduced portfolio marketing to New Zealand, involving bundling multiple properties together in promotional publications to provide vendors with a cost-effective and impactful way of marketing and selling their properties as well as presenting buyers with a wide choice of offerings.

It was initially introduced for selling commercial portfolios for large corporate vendors in 1990 and then extended into the residential market with Bayleys’ first Residential portfolio appearing in 1992. The Auckland office’s nine-strong residential sales team secured 20 properties for the portfolio, 18 of which were to be auctioned on one day. “In this first for the New Zealand market, Bayleys gives new focus to the marketing of prime residential property,” John Bayley said in his introduction to the classy looking publication. “Residential reflects Bayleys’ response to an increasingly sophisticated and demanding marketplace. The expectations of our vendor clients are that their properties receive the best in marketing exposure and the total commitment of a dedicated sales team.”

Phillip Toogood, then National Marketing Manager but these days Managing Director of Bayleys Fiji, said the objective was to create a product where the recipients thought they were receiving a home-related, high-quality magazine rather than a hard-sell property catalogue. “Having an impactful front cover with a bold, magazine-style masthead and a colour photo of a high-end home helped get people to rip open the clear plastic wrapper. We sent the publication out on a Friday to a database we’d established and phones started ringing off the hook over the weekend. The market reaction was phenomenal. We even had bookstores – who’d had customers coming in wanting a copy of the magazine – ringing us up and asking why they weren’t among the distributors.”

Of the 18 properties that were auctioned, all but three sold, with four transactions over $1 million at a time when $1 million plus sales were still a rare exception rather than the norm in Auckland. Around $45 million of sales were concluded from the first five issues of Residential. Many more regional portfolios followed under various titles such as Homes, Select, Preview, Moving On and most recently View.

Other enduring portfolios which remain leaders in their market sectors are Waterfront, launched in 1992, and Total Property, targeting the commercial property sector, and Country, both established in 1999. The latter provided an excellent marketing platform not only for Bayleys’ growing team of rural salespeople but also for city-based agents selling lifestyle properties located on their rural boundaries.

Portfolios remain a pivotal part of Bayleys offering to vendors, says Johnny Sinclair, National Director Residential. “They provide individual property owners with the opportunity to pool their resources with other vendors and to benefit from economies of scale and a higher level of market exposure than is possible with a standalone, individual property campaign.”

While the printed magazine remains an integral part of Bayleys’ approach to portfolio marketing, digital promotion now makes up a major component of a multi-channel promotional package.

National expansion opens up growth opportunities

The biggest contributor to the growth of Bayleys’ residential and rural business has been the expansion of the company’s national network, mostly using the franchise business model. In 1990 Bayleys had just one office in Auckland’s CBD, employing just over 100 people, which was predominantly focused on the commercial and industrial market with a small boutique residential business. By Bayleys’ 30th anniversary in 2003, there were 42 offices with over 850 people as Bayleys’ agency reach spanned out across New Zealand. Those numbers have more than doubled in the last two decades.

Residential is now the largest component of Bayleys agency business. “We’ve really only just begun in residential,” says Bayleys managing director and CEO Mike Bayley. “There’s a huge opportunity to increase Bayleys’ residential presence to match our dominance in the commercial and rural property markets, although the focus will be on quality rather than quantity. We’ll do this through further growth in our existing national franchise network as well as judicious acquisitions and partnerships with companies that align with our culture and values.

“There will also be a big focus on adding further value to the services we offer clients. We established a joint venture in 2020 with Vega, one of New Zealand’s fastest growing mortgage broking and financial services company, and we now have Vega mortgage brokers working out of many of our offices, assisting our agents and their clients secure the all-important finance needed to get most transactions over the line.

“We’re also intending to add further impetus to our nationwide residential property management businesses which currently encompass over 150 personnel around the country managing in excess of 11,000 residential properties.

“Looking ahead to the next 50 years, our ultimate objective is to provide Bayleys’ customers with a market leading one-stop property experience,” says Mike Bayley.

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