Real Estate IT

Using 360 pictures to market space for lease

The technology to create 360 pictures has been around for years but that doesn't mean that someone is using it great. However, today I got a tip that Eklandia (a large Swedish property firm) is using it in a clever way.

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It's not the 360 picture that is impressive but how they have implemented it to the floor plan and that you easily could see on the floor plan where the camera is pointing. Take the tour using this link. The entire market material is found here.

CoMotion is the company behind it and from visiting their site I could also see that they are doing the same for Vasakronan and Fabege.

 

 

Kungsleden takes the lead...

 ... and makes it easier to buy their services.

I believe that many companies make it too complicated to be interested in their services. For example, if a property company tries to attract tenants, why not making the offer as easy as possible to understand? 

Most companies are now days using the Internet to market their empty office space. However, few do it with more than a few lines of text, one (1) photo and contact information. Actually, 10% of the offerings on the listing service Objektvision don't have a single photo!

Anyway, for a long time I have questioned why not also put the rental rate in the offering. The response has been that it is impossible (?) . But I'm now delighted to notice a change. One of the companies that has started this is Kungsleden, a listed property company. Their new concept "Raka vägen till rätt lokal" (Direct road to the right space) is promising. The aim is to always include photo, floorplan and rental rate. Keep going!

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Using the listing service mentioned above I find that 10% of the 1038 listed offices in Stockholm displayed the rental rate. In Göteborg 4% of 871 and Malmö 17% of 449. (However, if you excludes the listings from Kungsleden, the number is 7% for Malmö!)

Compare that to the listings on Loopnet, a US based listing service, where 90% have rental rate displayed. Anyway, someone has to start in Sweden and that seems to be Kungsleden.

 

LoopNet - The first week on the List

Last week, the 7th of June, LoopNet went public (and raised $72 million) by offering 6 million shares at $12 per share. A proposed market cap of $485 million which is more than 10 times its current revenue run rate.

After the offering, the company expects to have 34.8 million shares outstanding. Executives and directors, who didn't sell any shares in the IPO, continue to own 43 percent of the company's stock.

The first day generated an increase of close 30% but hos gone back to around $15.

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Revenue
LoopNet reported net income of $18.9 million on $31 million revenue in 2005.
Revenue has almost tripled in the past three years.

The company has been profitable since the second quarter of 2003. Its revenue in the first quarter rose 65 percent to $10.2 million, and net income rose 59 percent to $2.97 million, compared with the same period in 2005.

The company makes money mostly (80%) through premium subscriptions to the site. The remainder of the company's revenue comes from advertising revenue from the site and certain product licensing fees.

Number of users
The site has 1.2 million registered members, with 64,000 of them paying a monthly subscription rate of $39.95 to $49.95 for premium service. The site averages more than 590,000 visitors per month, according to ComScore/MediaMetrix. Thirty percent of the company's paid subscriber base is concentrated in California

Number of listed properties
At the end of March, LoopNet listed 360,000 properties totaling 2.8 billion square feet worth more than $296 billion.

The IPO Prospectus
Is found here.

Seeking Alpha has published to analysis on Loopnet;
"An in-depth look at LoopNet IPO"             12th June
"LoopNet IPO: Strong out of the gate"         9th June

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Property investment company purchases an online community

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Sten Mörtstedt, CEO of CLS Holdings plc (a property investment company), places a bid to buy the rest of Lunarstorm for 170 million SEK (roughly 18,2 million EUR). His interested in the company started in 2001 when he invested 15 million SEK for 30% of the company.

The aim is to go internationally
After years of talk Lunarstorm started last autumn to expand by launching the service in UK. Read more here.  According to an article in Dagens Industri on Saturday "they will invest a few hundred million SEK the coming years to launch the service in Europe, US and China".

Background
I believe the timing of the purchase has to do with the growing focus on similar services in the US. The biggest is MySpace. Bought by News Corp, the company run by media mogul Rupert Murdoch, nine months ago for $580m. The story told in CNN. Another one is FaceBook which is apparently on the market according to BusinessWeek. I bet the value of those companies is attracting the interest to grow something similar on this side of the pond.

Lunarstorm
Lunarstorm is Sweden's leading youth oriented community service with over 900 000 members logging in to their service every week. Roughly 80% of the youths between 12-17 years are using their service! The revenue was 71 million SEK last year with a profit of 14,9 million SEK.

Further reading see the article in the Herald Tribune (200511-28).
IDG wrote earlier this year a story about how they managed to start charging for their service. (Only in Swedish)

About communities
Last December BusinessWeek wrote an article on the culture of youth communities. More on the topic is found in the blog of Danah Boyd who recently had a speech about "Identity Production in a Networked Culture: Why Youth Heart MySpace" .

More about Sten Mörtstedt and CLS
"Sten Mortstedt, 65, began his career 1962 with Svenska Handelsbanken (Stockholm). 1968 was appointed Managing Director of the Mortstedt family property company Citadellet AB, which he successfully floated on the Stock Exchange in Stockholm 1981. Since 1977 he has been involved in establishing and running property and other family interests in Europe and USA and is the Executive Chairman of CLS Holdings plc (established in 1987 - listed on the London Stock Exchange 1994).

CLS Holdings plc is a property investment company, listed on the London Stock Exchange since 1994. It has an equity of £426m and a property portfolio in London, France, Sweden and Germany valued at over £1bn. CLS has invested primarily in offices. It has established local management operating from offices in London, Paris and Stockholm. The company was founded by its current Chairman, Sten Mortstedt whose family holds a controlling stake in the company."  The description is  from GRI. 

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A new start-up for residential homes

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blog_zillow_240px.gifEarlier this week a new service called Zillow opened up for a Beta (is there anything else these days?). It is all about automated valuation on homes in the US.

'How much is your house worth? Zillow knows'  A CNET article on the 7th february
'How scared should brokers be?' BusinessWeek on the January 13
'Zillow aims for realty riches' RedHerring, october 26, 2005
'Vad kostar Bill Gates hus?' Realtid.se, february 15th, 2006  (In Swedish)