As revealed by PrimeResi today, Warren Buffet’s Berkshire Hathaway HomeServices network has significantly boosted its presence in Prime Central London, acquiring longstanding Knightsbridge agency Marler & Marler. In this exclusive interview, Samuel & Martin Bikhit of BHHS London Kay & Co, whose family-run agency joined the US-based franchise network in 2018, extol the virtues of a global referral network, discuss the next stage of the acquisition drive, and explain why the ‘escape to the country’ trend is just a fad…
How did the deal come about – who approached who?
The deal came about at the perfect time: the Partners at Marler & Marler wanted to elevate their business to the next stage and they felt that Berkshire Hathaway HomeServices was the right match because we share the same core values of trust, integrity, financial strength and longevity.
The Marler & Marler base is on Sloane Street, one of PCL’s most high-profile addresses; how important is this kind of real-world presence to buyers, sellers, landlords and tenants in the digital age?
When Berkshire Hathaway HomeServices first approached us they said that the goal is to be like the Mandarin Oriental
Marler & Marler is a first floor location, meaning this is our first non-street level presence. Whilst we value the need for visible presence – we also believe that the agency shop front is more about driving new listings as opposed to bringing in buyers. We have no intention of being on every high street in every part of London – when Berkshire Hathaway HomeServices first approached us they said that the goal is to be like the Mandarin Oriental – in all of the best, world-class destinations but not absolutely everywhere. This approach enables us to keep an air of exclusivity which we value above having a presence on every single high street.
Marler & Marler has been operating in the area for over 150 years, making it one of the oldest real estate firms in London; how important is that history, and name to BHHS – and how will the new operation be branded?
It’s incredibly important to us. Berkshire Hathaway HomeServices is a global brand and part of Warren Buffet’s iconic corporation – we want to incorporate legacy values of every business we acquire as those values are indicative of why we are looking to join forces with them in the first place. Marler & Marler is a respected name in the business and we are excited about taking them to the next level. The new operation will be branded as Berkshire Hathaway HomeServices London Marler & Marler.
Will there be any changes to the team, services offered or areas covered?
Our goal is to heighten the success of the existing Marler & Marler business by providing the support and resources needed to enable them to compete with other key players in the market. The Berkshire Hathaway HomeServices brand will also give them the global reputation they deserve.
BHHS Kay & Co already covers a wide patch of prime London taking in Mayfair, Hyde Park, Marylebone, Regent’s Park, King’s Cross, Bayswater, Paddington and the West End; are there any other acquisitions in the pipeline – or parts of the capital on the radar?
The Marler & Marler acquisition is a pivotal anchor site for us as it gives us coverage south of Hyde Park which we’ve never had before. Hyde Park is the golden gate of London and we want to cover all bases. North West London would also be a natural next step for us with its desirable neighbourhoods like St John’s Wood and Hampstead. We do see value in South West London too and would be open to discussions with quality businesses interested in joining the Berkshire Hathaway HomeServices global network.
Samuel, you founded Kay & Co in 1982; what are the major changes you’ve witnessed in the industry since then?
When I founded the business it was a very different world. It was a world of independent agents and the global brands that dominate today did not have the same scale and market coverage at that time. Today, emails and Instagram have replaced fax machines and old-fashioned property particulars and I’m so proud that as a company we have adapted with the times. We’ve always prided ourselves on being forward thinking which is why we decided to join the Berkshire Hathaway HomeServices global network.
Kay & Co’s tie-up with BHHS was announced in 2018; Martin, as MD, what have been the key advantages of running the agency under a major brand, as opposed to independently?
I worked at Kay & Co for 23 years until it joined the Berkshire Hathaway HomeServices family and I can confirm that it is so much harder to build a business today than it was 20 years ago. The consumer now demands a global outreach and the Berkshire Hathaway Homeservices brand gives us this platform and connects us with carefully curated affiliated partners around the world who share our ethos and client bases. It’s also the most incredible referral opportunity I’ve ever had – one client gave us £152,000,000 worth of listings, such was their belief in the brand and its ability to connect with the right kind of consumer. We have also been fortunate enough to work with companies as prestigious as Argent (developers in Kings Cross), they engaged us to sell their developments and I believe this came about as a result of our Berkshire Hathaway HomeServices affiliation.
Can you talk us through how the BHHS marketing machine works; how are leads and referrals generated and managed across the global network? Is your reliance on property portals lessened as a result?
One client gave us £152,000,000 worth of listings, such was their belief in the brand and its ability to connect with the right kind of consumer
The beauty of the Berkshire Hathaway HomeServices network vs a standard global company is the fact that there is a financial incentive for brokers to refer business because they receive a big percentage of the fee for referring business. A traditional global office would get nothing. We have had 20 referrals amounting to around £5,000,000 over the past two years from the New York office. We also regularly receive referrals from our offices in Miami and LA.
BHHS will now have an established presence in Knightsbridge; how do you foresee the PCL market performing over a) the next 12 months and b) next five years?
For a long time the London market has been pushed down as low as it could possibly go thanks to Brexit and then the Covid-19 pandemic. There’s now light at the end of the tunnel with a roadmap to escape from lockdown and a fast approaching reintroduction to international travel, so I do think the prime market will see growth over the next 12 months. I would encourage domestic buyers to get their skates on and get in the game before international buyers return to market and make up for lost time. No one could have predicted the Covid-19 pandemic so it’s difficult to say what the next five years hold but hopefully we will continue on a positive trajectory as the dust settles after a tumultuous few years.
How has business been affected by the pandemic over the last 12 months? Do you think urban areas will be permanently affected by the lifestyle shifts we’ve seen as a result, or are you confident that PCL will quickly regain its buzz – and former appeal?
There’s been a lot of coverage around people living in cities upping sticks and moving to places literally out in the sticks to seek refuge during the lockdown months. There’s a difference between trends and fads and I believe that, for the majority, moving to the country is a fad. In reality, people will get bored of country pubs and having to jump in the car in order to go to the nearest shop. Instagram influencer Louise Roe has recently made the decision to leave her country home and move back to London as she wants to be closer to friends and family when she has baby no. 2 and I fundamentally believe that for many moving to the country was a reaction. The thought of returning to the office is becoming more of a reality and people who made the country move are now having second thoughts about the commute. London will draw people back to it for the reasons it always has – culture, restaurants and a more convenient lifestyle. One lifestyle shift that I think is here to stay is the concept of additional homes rather than second homes. People now realise that it’s possible to have the best of both worlds and enjoy a more fluid lifestyle flitting between homes as they choose, rather than committing to one primary residence.
Berkshire Hathaway founder Warren Buffett is renowned for picking up on lucrative future trends, and there’s been a lot of “disruption” in the estate agency sector of late; what key trends do you think will shape the industry in the coming years?
If you look at America it’s about ten years ahead of us – so it’s always interesting to gain an insight into what’s going on over there. It’s been documented that American realtors are increasingly using TikTok to share access to luxury properties and Instagram has now become an established platform for American realtors to share listings with thousands of followers, with UK agents only relatively recently following in their wake. One thing for certain is that technology is here to stay but it’s definitely not about to start replacing agents, instead it’s about enabling them to do their job more effectively. At the end of the day, relations are the most important asset and when people embark on a transaction they want to deal with real people.
How involved is Warren Buffet in BHHS, and do you have a favourite piece of advice from him over the years?
Obviously Berkshire Hathaway Inc. is a massive conglomerate and it encompasses multiple markets so Warren Buffett is an extremely busy man. He is however absolutely involved in the business and his words of wisdom relating to both life and business success have been passed down through the company. I’ve always liked his quote “The investor of today does not profit from yesterday’s growth” as it serves as a reminder to always look ahead and prioritise a forward thinking mindset, which is resonant of the values that have always been at the heart of our business, even before we joined Berkshire Hathaway HomeServices.