REA Group is one of the highest quality businesses in the ASX, operating a highly scalable marketplace model. The current selloff presents an opportunity to buy businesses where significant share price falls have overshot the loss in businesses intrinsic value. There are several reasons why I think REA is well positioned to outperform across the next decade…
- An enduring moat fortified by strong network effects – REA benefits from strong market share across Australia, making it a clear leader in a duopolistic market structure. Prospective property vendors are incentivized to advertise on the portal due to its unparalleled reach while prospective buyers begin their search on REA and are significantly more engaged on the site than on its major competitor’s site. The costless search function means there is very little incentive for potential homebuyers to switch to alternate portals/methods – especially because essentially the entire market is available to them through the use of REA. This creates extremely durable network effects on both sides of the property transaction that results in agents needing the portal for audience reach.
- Long track record of strong returns on capital – REA operates a highly scalable digital marketplace platform that requires minimal additional capital expenditure as volumes increase. As a result, REA is highly free cashflow generative and has solid prospects for significant returns to shareholders in the future. The impressive track record of EBIT growth is highlighted in the below chart. REA’s Return on Invested Capital is 23% and Return on Equity is 30%.
- Continuing margin expansion should underpin future earnings growth – REA currently generates ~55% operating profit margins and has demonstrated a long track record of margin expansion driven by topline growth and a controllable costbase. REA has used its market share dominance and the significant value it adds to the property sales process to consistently raise prices even as it has reached a level of saturation in terms of total listings numbers. Despite this, REA/DHG currently account for ~44% of property marketing spend and ~15% of the total vendor spend pool which highlights the opportunity for future growth. REA requires minimal increased operating expenditure outlays as it grows volume, allowing EBIT margin expansion
- Valuation – REA currently trades on 39x trailing earnings. Despite having rallied in the past fortnight, I believe this is an attractive valuation if investing with a long term mindset due to REA’s defensible moat, capital light business model and long track record of earnings growth. These features underpin 8.8% yearly earnings growth + 1.5% dividend yield under my assumptions.
Modelling Future Returns
There are currently 10.4mn houses in Australia – a number which has grown at an average of 1.49% since 2004 and 1.67% since 2010 underpinned by immigration growth and structural declines in population density per household. To be conservative, I assume volumes in the next decade continue to grow at 1.5% (below the most recent decade average.)  Despite listings turnover being at all time lows, I do not assume a recovery as my base case in order to err on the side of caution.
REA has demonstrated a strong track record of consistently raising its prices outside of this year where scheduled price rises have been deferred 3-4 months to support REA’s clients amidst a challenging operating environment. To understand REA’s continued ability to monetize their depth offering, it is worthwhile looking at the growth of the revenue earned in this segment overtime vs. increased penetration amongst real estate agents. Note that Depth revenue is calculated as a function of:
The chart below shows that REA has increased depth penetration (volume of listings purchasing a premium package) by 29% since the start of 2016 yet has grown revenue in the segment from $160mn (1H FY16) $322mn at 1H20… more than double.
Source: REA 1H20 presentation pack
This looks even more impressive when one considers that the annualized run rate for listings in 1H16 was 495 000 compared to 390 000 in 1H20. The decline in volumes of listings over this period (-22%) nearly offsets the increased depth penetration REA has benefitted from (+29%) and indicates that the majority of growth in depth revenue has effectively been driven through price. I discuss the significant drop in listings as a key risk below however, I assume this trend to stabilize when building out my revenue assumptions given that the drivers of the weakness in FY19 were election related and we have reached all time developed world lows. To work out REA’s annualized price increase I backsolve using the following formula…
[ (1H 16 rev) * (increase in depth penetration) * (% change in listings volumes) ] * X (price) ^ (8) HY periods = (1H 20 rev)
[ $160mn * (1 + 29%) * (1 – 22%)] * X (price) ^ (8) halves = $322mn
X (price) = 9.1% per half or 18% per year
In reality, the price increases are varied across regions and within markets. Feedback at results time tends to be qualitative in nature. Note REA’s commentary around price increases below.
- Jun 2016 – 10-15% price increases
- Jun 2017 – 15%+ price increases
- June 2018 – 10%+ across all Premier All customers but no increase in WA
- June 2019 – 8% across Premiere All, leads bundled for free
- June 2020 – 6%+ across Premier All, but with leads charged separately. Note this has been deferred temporarily given the current operating environment.
I expect REA to continue to monetize their user base due to the strong moat it has in the Australian property market underpinned by the networks effects of its portal. Notably, price hikes have been smaller at the most recent contract negotiations (~6%) on the back of a softer market however, I do not believe this is an indication of reduced pricing power but rather a desire to engender goodwill with REA’s client base. 2019 saw a natural slowing economic environment amplified by an election year which severely restricted listings volumes and as a result agents suffered. As the below graphs indicate, there is a substantial runway for REA to continue to take share of the vendor paid advertising market.
REA and DHG digital currently account for ~44% of total advertising spend with the “Other” category comprising of signs, pamphlets, photo shoots etc. Some of this is essential such as auctioneer booking fees however, having looked extensively through numerous real estate agent advertising budgets, it is clear that a significant return is made from vague ‘campaign management fees’, advertising on the agencies website and bogus transaction processing surcharges of around 6%. These three common but hidden charges represented on average an additional 18% charge that the agent was receiving from digital marketing… in addition to a full 2% commission for the actual sale. Additionally, an advertising package in Domain’s print catalogue can cost over $10k which in a number of budgets I viewed, was greater than 50% of the total spent on marketing alone.
There is an opportunity for REA to capture a greater share of these surcharges notwithstanding the structural tailwinds for digital as the relevance of pamphlets, brochures and other loose leaf advertising diminishes. The return on investment for an individual in terms of audience reach from advertising on REA/ DHG digitally far outweighs the benefit from these ancillary agent charges or antiquated marketing channels. Total agent commissions in recent years represent ~$4.5bn while total vendor spend is estimated to be ~$7bn. Digital advertising currently comprises $1.1bn of this $2.5bn total addressable advertising market.
The market structure in the Australian digital property industry and significant value added by the platform allows REA to continue to raise prices. These network effects are powerful and underpin REA’s ability to pull the price lever in the future. Prospective vendors are incentivized to advertise on the portal due to its wide reach while prospective buyers begin their search on REA and are significantly more engaged on the site than on its major competitor. The costless search function means there is very little incentive for homebuyers to switch to alternate portals or methods – especially because essentially the entire market is available to them through the use of REA. This creates extremely durable network effects on both side of the property transaction.
In order to maintain a margin of safety, I will assume 5% price increases p.a. given the more cautious recent contract negotiations although would point out that REA’s historical track record is superior. I have assumed 0.5% increase in depth penetration per year from current levels which compares to an average of ~3% per year historically. This accounts for the slowing trajectory however, still maintains a margin of safety given that REA are currently ~80% penetrated in ‘blue ribbon suburbs’ according to management while hovering below 50% penetrated in most other parts of Australia. Estimates of the current % of listings using depth products are around 25% based on anecdotal feedback from management.
To derive the property advertising revenue line I rely on the price and volume assumptions made above of 1.5% volume growth over the medium term, 0.5% depth penetration and 5% price growth which yields a topline revenue growth estimate of 7.1%. I assume Financial Services EBITDA remains flat and do not include the earnings potential of REA’s international investments. Given the uncertainty associated with FY20 and FY21, I have assumed a 25% decline in revenues for FY20 (despite the first half run rate being unaffected) and FY21 revenue to roughly return to FY19 numbers. Assuming REA continues to grow its FY21 Aus digital advertising revenue base of $799mn at 7.1% for the next 12 years, REA’s digital advertising revenue would arrive at $1.59bn by FY31. I have chosen 12 years as my forecast period as it allows for a soft 2 year period due to Covid before 10 years of more ‘normalised’ operating conditions.
Applying the same assumptions to DHG’s $252mn of FY19 revenue generates leads to digital property advertising revenue of $497mn and a total value of $2.09bn spent on online property advertising vs. the future estimated total vendor marketing spend of $3.17. Under these assumptions, total digital portal advertising spend would then encompass 66% of the countrywide vendor marketing budget – I still think there is room to expand here and take a greater share of the broader property advertising budget given the value added in finding additional buyers than may contribute tens or in some cases hundreds of thousands to the vendor’s sale price. The materiality of the transaction underpins the platform’s ability to raise prices as the benefit of a higher sale price resulting from reaching a wider audience significantly exceeds the cost of the listing which is ~$2000-$2500. The process of selling a house is an extremely material transaction in a vendor’s life which affords platforms the ability to expand pricing – especially given that advertising on digital portals currently accounts for 0.25% of a $1mn transaction.
As a result of these factors, i expect the portals and REA in particular to continue to take market share. The outcome of my revenue growth forecasts are highlighted in the above table.
REA operates a highly scalable business model which has enabled margin expansion as REA has grown its revenue. The below common size income statement highlights the operating leverage arising from REA’s cost structure. The major cost drivers in $ terms (employee benefits expense and operating/ admin expenses) have declined as the business has grown while marketing has grown in line with revenues.
REA has generated margin expansion in the underlying operating business despite an environment of persistently declining listings volumes. This underpins my assumption of 1% of operating profit margin expansion per year and translates to EBIT growth of 8.9% as a baseline. If volumes return to the decade average, there is upside risk to this forecast although this is not in my base case. Note that Rightmove (a UK property portal comp) operates a broadly similar business model with consistent 75% margins so margin expansion remains possible.
Valuation & Investment Recommendation
Justification of current multiple
On 30/04 REA closed with a market cap of $11.7bn which translated to a trailing pe ratio of 39x. The compounding earnings growth of REA’s Australian digital advertising business (8.8%) significantly lowers this multiple in outer years. Additionally, REA currently pays a trailing $1.18 dividend which contributes an additional 1.48% return and brings total shareholder yearly returns to 10.3% under my base case assuming no change to the multiple. Some points of comparison when assessing the current multiple:
- Peer multiples – DHG trades on a trailing earnings multiple of 44x, SEK trades on a trailing multiple of 39x while RMV trades on a trailing multiple of 32x. For the reasons outlined above, REA has a more secure path to ongoing earnings growth with a margin of safety that exceeds it’s classified peers whilst trading on a broadly similar multiple.
- PE rel basis – The premium multiple REA trades at relative to the ASX industrials (~22x) is supported by strong future growth earnings prospects and the fact that this is below its 3 year average premium to the index. The current interest rate climate supports secular growth stocks with a larger weighting towards long dated cashflows such as REA and if anything, should underpin a wider premium than usual.
A DCF is more appropriate as a valuation method as it better captures these longer dated cashflows. Using assumptions of a 7% WACC, 3% terminal growth and the earnings growth justification outlined above, I reach a downside target price of $83.94 that forms the lower end of my range. It is worth reiterating my conservative assumptions which I believe present a significant margin of safety to the revenue growth forecasts outlined above and provide potential upside to REA’s return:
- I have flatlined the Financial Services segment, assuming that it does not generate any additional growth.
- I have accounted for the value of REA’s 20% stake in Move and various investments in Asian businesses at book value ($326mm) and therefore not included any future growth.
- I have assumed no benefit from REA’s opportunity to sell leads to agents. I do believe that this will provide them with the opportunity to launch an additional package priced above Premier all and generate another high margin revenue stream however; this upside is not included in my base case.
- I have not assumed a recovery in listings volumes beyond the all-time Australian low FY19 turnover of 3.8%. This was a year with state and federal elections as well as slowing economic growth. The decade average turnover rate is 4.8%.
- REA is extremely free cash flow generative due to its highly scalable operating model. Despite this, I have not assumed any increase in the dividend yield. This is due to management’s track record of deploying capital into international growth projects instead of returning it to shareholders.
At current valuations, REA is pricing in no improvement in the all time low listings conditions, no upside from the leads opportunity, Financial Services, Hometrack or its international investments. I have used what would be an all time low of pricing growth and additional yearly depth penetration from FY22 onwards in my DCF in addition to an 18 month price rise deferral for agents with reduced volumes due to covid. As an indicator of its significance, a recovery in listings volumes to the decade average (4.8%) from FY23 onwards vs. changes in pricing growth assumptions would lead to the price target sensitivities found in the below table. It is worth noting that in Q3 FY20 listings had begun to reflect a recovery prior to the coronavirus induced lockdown indicating pent up supply exists in the Australian housing market. Historically, listings volumes have returned strongly after economic downturns.
If I assume a return to the decade average of listings in FY23, my target price becomes $105.20 which offers 17.8% upside to the current share price. It is worth noting that this only assumes normalisation of the listings environment and not any other growth angle explored above or a cyclical uptick in listings. These sensitivities against the backdrop of the wide margin for error in my assumptions underpin my Buy recommendation.
Please see the notes below for further discussion on how the following factors present upside risk to my target price. I do not believe they are necessary to validate the Buy call on REA given the 10.3% annual return calculated when using earnings and dividend growth as a proxy for total shareholder return. Additionally, my DCF highlights a price target range of $83.94 (assuming we remain at all time low levels of housing turnover) to $105.20 (assuming a return to the decade average listings volumes.) Various other considerations to my analysis are discussed in more detail below.
- A recovery in listings volumes
- Monetising the leads opportunity
- COVID & balance sheet risk
Upside Risk 1: A Rebound in Listings
A topic of debate in the past 5 years in Australian real estate has been the declining volumes of listings. The onset of Covid 19 will likely result in multi-decade turnover lows for the Australian housing market (approaching the post GFC low of 3.0%.) The RBA has released an interesting paper discussing housing market turnover. There are a number of salient points raised:
- Reasons to move have not changed: The majority of new home owners move to find a place of their own. However, there has been a significant increase in millennials a) staying at home for longer and b) renting until well into their 30s. The expectation is that as this cohort enters a home buying age, it will lead to a boost to the housing market. This suggests the current downturn may in fact be cyclical.
- Interstate migration: Structural factors such as improvements in technology and the changing nature of work are likely to have reduced the benefits of interstate migration while increasing insecurity around employment and income, which would be expected to weigh on the housing turnover rate.
- Migration: By contrast, the relationship between rates of housing turnover and gross overseas migration (the sum of overseas immigration and emigration) appears to have been less strong. While higher rates of gross overseas migration would be expected to have a positive effect on the housing turnover rate, this relationship could operate with a lag given that a large proportion of new immigrants tend to rent their first home in Australia before later transitioning to home ownership. Students also comprise a large share of new migrants to Australia and are likely to be less able and inclined to purchase housing than the average household.
Clearly there are some structural factors at play here and it is difficult to determine the extent to which the decline in listings is cyclical vs. structural. Coronavirus will likely ensure that housing turnover falls below the all time lows of 3.8% and likely push beyond GFC lows in the UK, the US or Aus. To be conservative, I assume that listings turnover stay at all time Australian lows as the lower end of my valuation range despite 2019 featuring a general economic market deceleration coinciding with both a national election and state election in NSW. A more normalised volumes environment would involve listings as a % of housing stock rising back towards 4.8%.
Upside Risk 2: Selling Leads to Agents
A key upside risk to REA’s earnings profile over the next decade is the prospect of selling vendor leads to agents. The US system is an example of a model where agents paying for leads is commonplace whereas in Australia, agents still generate leads primarily through existing CRM systems and word of mouth referrals. There are a number of existing players in the market which are paid a percentage of the agent’s commission if their leads culminate in the successful closure of a transaction. Rate My Agent is the closest existing comparison given that it offers a subscription based service however, it is yet to achieve a level of mass penetration. Regardless, this illustrates that leads are a service agents are willing to pay for albeit, in its infancy as a concept in Australia.
Agent Edge Product Suite
REA has developed a product suite to improve traffic to agent sites.
- Agent Match – REA maintains a database of profiles that prospective vendors can assess when looking for an agent
- Agent Elevate – a premium offering featuring an agent’s historical track record and other datapoints to help the agent sell themselves.
- Agent Reach – Utilizing external digital acquisition channels (E.g. Google and Facebook) to attract vendors.
The real estate industry is slowly evolving as technology enables agents that do not have extensive CRM databases to compete against incumbents with deeper relationships. Agents spend a substantial amount of time sourcing leads – my channel checks across a number of agents indicate sourcing leads takes up in excess of 30% of an agent’s day. Freeing up time to focus on settling transactions is integral to an agent’s efficiency and profitability. As another indicator Redfin is a US based leads generation property portal and the company reports that agents are able to triple their transaction productivity through using effective leads when compared to non Redfin agents. The key for REA to monetize this product suite will lie in the willingness of agents to pay for leads in the Australian market and demonstration of the quality of REA’s leads. REA has trialed a pay per leads model but has received pushback from agents – the psychological disappointment of paying for a lead that does not convert to a listing has been problematic for agents. Therefore, I ultimately expect REA to introduce an additional tier beyond Premiere all to monetize this opportunity. This will take time to implement and is not included as part of my base case.
Risk: Off Portal Transactions & Alternate Leads Sources
A significant risk to the leads opportunity and ongoing viability of platforms is the prospect for off portal transactions to grow in share. I have explored the risk to this scenario by conducting channel checks with agents and had conversations with KOLs to assess this risk.
Discussions with agents
Industry contacts have expressed their reluctance to pay for leads directly as it was initially trialed by REA. In general, there is a stigma in the industry associated with paying for leads although it is slowly changing. A number of agents across Sydney discussed the strong leads that they were getting from targeted ads on social media (Facebook, Linkedin etc.) Others have highlighted that the higher value end of the real estate market tends to be an older demographic who have acquired more wealth over the course of their life. These high value vendors occupy the majority of REA’s premium packages and are much less likely to be found over social media sites like Facebook.
Discussion with Josh Cobbs (CEO of Digital Real Estate Marketing Consultancy Firm Stepps)
My discussion with Josh highlighted that there are alternate means for agents to acquire leads than through a digital property portal. The aim for these other methods is to intercept a potential vendor at the top of the funnel (I.e. prior to going on an online real estate portal.) Josh outlined the following results from a case study:
Steve Creeze, three weeks into the campaign, his portal advertising, on the top package available in his area, has generated 3,658 page views of the property for a cost of $2,757. In contrast, Steve’s targeted Facebook ad has generated 1,728 website clicks – people clicking through to the listing on Steve’s own website – for a cost of $62.95.
Josh did highlight in another case study that 96% of individuals sampled started their search for a property on the major portals while 84% did not visit an agent’s website. To me, this highlights the powerful incumbency of the portals in the minds of the consumer. Josh estimates that hundreds of millions of dollars commission are being taken off portal currently as a result of alternate digital lead sources.
Based on the research Stepps has done into Google search behaviour for specific phrases that potential vendors would use with intent to find/select an agent, Josh highlights that Google is where a large number commence their search for an agent or to compare, including Google’s own review platform. In his view, their starting point is Google search results. The clicks gained by organic and paid search results for a particular phrase are secondary to Google’s ‘Google My Business’ and the visibility gained is a credible threat to real estate portals.
The businesses and agents Josh works with who have high visibility on Google search results (organically – through search results and Google’s 3-pack of businesses in the local map results) rely much less, if at all, on third party lead generation mechanisms according to his study. With Google’s development of schema for comparing hotels and airlines well and truly part of consumer mindshare when they are comparing and searching for these services, it shouldn’t be unrealistic to believe that Google may have its own comparison engine, based on its own data + aggregated 3rd party website data, for real estate at some point in the near future.
This is undeniably a risk facing the leads model however I would make the following observations that I believe still ensure the portals are well positioned to benefit.
- Growing awareness of leads – Encouraging agents to pay for leads (even via alternate means) can still be a positive for REA/ DHG as they acclimatize to the usefulness of saving time by paying for leads. It is unlikely that social platforms or alternate online sources will capture 100% of the market and therefore, growing awareness of the viability of buying leads can be a positive for REA.
- Quality of portal leads – REA and DHG have access to the best data on prospective buyers in the country. They see the preferences of both buyers and sellers (suburb, price, house features, frequency of search etc) which are extremely valuable datapoints to a real estate agent. Not the big 4 banks (who only see their respective market share) nor real estate agents possess the same insight into the Australian customer base. Existing CRM systems and more broad based marketing approaches traditionally used by agents are, in my view, unable to compete with the completeness, timeliness and accuracy of the data that the portals collect… at least from a lead quality standpoint. Owen Wilson (REA CEO) has stated on record that 20% of REA’s sold leads convert to a listing.
- Quality of social media leads – In a recent post results briefing (Feb 2020), Jason Pellegrino highlighted that DHG had significantly pivoted away from their mass marketing strategy to attract traffic. DHG previously had focused on visitation numbers rather than quality, actionable leads. As a result, although absolute website visits were comparable to REA, average time spent and conversion to listings was significantly inferior to REA. Pellegrino stated that >6mn Australians engaged in property over the internet every month yet 150 000 would attend an open house and 30 000 would actually transact. FB cost per click of 3c-10c may seem attractive but rarely delivers the high quality, motivated property buyer that the portals/ agents are seeking. As effective as the Stepps case study above seems, I believe that agents will encounter similar problems with lower quality leads when using social media platforms. The cost per completed transaction may be higher despite a low cost per website view.
- Quality of Google & direct approaches – Google is a very credible threat to leads volumes that may occur off platform. This has been the case for a long period of time and at this stage, I don’t see any intention from Google to ramp up the level of market penetration of this service. However, it is worth maintaining an eye on as a potential risk.
Who is better placed? REA vs. DHG
- User traffic & data advantages – REA generates substantially more traffic and a more engaged user base on its platform than DHG. Across all platforms REA generates 84mn visits per month (2.95x DHG.) REA users spend 2.6mn hours monthly on the app (4.06x DHG.) This larger and more engaged user base presents a significant opportunity for REA to monetize the leads opportunity relative to DHG.
- Access to expertise – Through relationships with NWS and US businesses Move Inc and OpCity, REA is able to tap into offshore expertise when it comes to selling leads. A first mover advantage relative to DHG and access to experience in running this type of operating model should benefit REA.
It is difficult to quantify the opportunity without knowing REA’s go to market strategy however, suffice to say it is large. Agents spend at least 30% of their time sourcing leads and in many cases it is more. If REA were able to deliver 20% of their leads (effectively saving 6% of the time in an agent’s day for them through upfront payment)… this could translate to a $270mn revenue opportunity assuming a $4.5bn total agent commission pool. These are extremely rough numbers but are useful for illustration purposes as to the size of the opportunity.
Downside Risk: Covid & Balance Sheet Risks
Given the current dropoff expected in economic activity, it is prudent to assess the balance sheet risks facing REA.
REA maintains a strong balance sheet with $91mn in cash, $7.6mn in short term interest loans and borrowings and $324.5mn LT interest bearing loans and borrowings. REA’s 1H20 EBITDA of $261.8mn gives an annualized figure of $523.6mn. Therefore REA’s Net debt/ EBITDA = 0.45x under normal circumstances which is extremely manageable. This translated to >50x interest coverage using NPAT/ interest expense in REAs 1H20 result.
To stress test this, I will estimate a 50% drop in depth revenue, a 75% drop in Financial services revenue and a 75% drop in media, data and other revenue. I assume subscription revenue from agents falls 10% as certain agents withdraw from the platform (enter insolvency) but the bulk of subscription revenues remain.
|Revenue Stream (mns)||1H20||2H20E|
|Media, data, other||40.3||10.08|
Even under these onerous assumptions, REA generates ~$203mn of revenue. Assuming there is no cost cutting; REA would be required to pay $240mn to suppliers/ employees in cash based on the run rate found in its 1H20 CFS. This assumes that all operating costs are entirely fixed. Additionally, REA spent ~$35mn in capex (mostly software and intangible assets) which contribute to its cash burn. Under this scenario REA could fund themselves for 7.5 months purely with its $90mn cash balance. However, there are multiple ways REA could reduce the cash burn burden:
- Take out additional debt facilities – REA has a strong track record of returns and free cashflow. As previously mentioned, normalized net debt/ EBITDA of 0.45x is mildly geared at best and should not be restrictive for REA pursuing further debt financing.
- Cut costs – REA currently spends $75mn on marketing per annum (20% of sales) which could be scaled back to preserve cashflow. Like many other media companies, REA would have the option reduce working hours of its employees which comprise 54% of sales.
- Reduce capex – REA currently spends ~$35mn per half on developing intangible assets which could be deferred in the event of a cash squeeze.
- Q3 cashflow generation – REA’s trading performance to mid-March has reportedly been strong, likely leading to strong cashflow generation in the first 10 weeks of the half given REA’s capital light business model and 60% EBITDA margins.
- In reality some of REA’s operating costs would be variable in nature, lowering the cash spend requirements.
Given REA’s significant capacity for more debt, cost levers available and existing robust balance sheet, I do not think REA would need to raise equity even under a scenario involving a 50% or greater decline in listings/depth revenue. It is my expectation that REA would be able to access debt markets before making any change to its operating costs or capital expenditure programs.
REA does not have any current refinancing obligations. The next upcoming Refi requirement is in Dec 2021 where REA’s unsecured syndicated revolving loan facility is due. This is nearly two years after the onset of Covid so it is unlikely that this will be a concern.
 Data sourced from CoreLogic
 I have gleaned this from viewing a wide number of advertising budgets of vendors, discussions with agents and discussions with management of both major portals.
 Source: CoreLogic data, company data, my own estimates
 To get to this number, I have assumed the current vendor marketing spend budget ($2.5bn to grow at 2% p.a. in line with inflation over the next 12 years)
 1H20 Presentation data