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TPG-backed Northstar buys Singapore RE broker

The $1.2 billion Southeast Asian private equity firm has made its first real estate-related investment with the buyout of Singapore’s largest real estate brokerage firms.

The Northstar Group, the $1.2 billion Southeast Asian private equity firm in which global private equity giant TPG is a minority partner, has made a foray into real estate by leading the management buyout of Singaporean brokerage firm ERA Real Estate, according to a joint statement.


Details of the deal were unconfirmed, but local media reports have valued the deal at S$130 million (€77 million; $103 million), and that price is understood to include some leverage. ERA’s management team and Northstar were both part of the deal, but it is understood Northstar provided the bulk of the capital.


ERA Real Estate is Singapore’s largest brokerage firm, completing 44,000 sales transactions with a total property value of S$22.3 billion in 2012 alone. The firm is focused primarily on the residential sector.


The seller was Hersing Corporation, a Singapore brand manager and service provider for franchises such as children’s furnisher Casa Kidi and money transfer service Western Union. Hersing recently delisted from the Singapore stock exchange. Along with the sale, Hersing also signed a non-compete agreement with Northstar in order to give the private equity firm more room for expansion, according to the statement.


Northstar has created a separate vehicle, Realty Partners Group, out of its existing funds to act as the holding company for this transaction. It was not disclosed exactly which of Northstar’s funds  provided the equity for the purchase. The firm has raised three private equity funds since its inception. They are the $110 million Northstar Equity Partners, closed in 2007; the $285 million Northstar Equity Partners II, closed in 2010; and the $820 million Northstar Equity Partners III, which closed in 2011, according to the firm’s website.


Leading the management team in ERA is Jack Chua, a real estate veteran in Singapore who has been “instrumental” in growing ERA’s business during his 20 years at Hersing, according to the statement. “Northstar shares our vision to further build on our market-leading position,” Chua said in the statement. “Together, we plan to introduce new training programs and IT initiatives to further increase productivity and stay ahead of the curve.”


Ashish Shastry, Northstar managing partner and chairman of its Realty Partners Group, said in the statement: “We aim to re-list ERA as a ‘pure-play’ real estate brokerage firm on the Singapore Exchange, within the next two to three years.”


The statement also added that Northstar is in the process of acquiring ERA’s Asia Pacific Master Franchise, which has a presence in 18 countries across Asia. That deal is still waiting for the master franchisor’s approval.

Northstar declined to comment on any further details.