Domain buys listings platform Commercialview.com.au

Real estate media business Domain Holdings will acquire Commercialview.com.au for up to $17.2m.

Domain chairman Nick Falloon. Pic: Hollie Adams

Online property listing group Domain has agreed to buy Commercialview.com.au to bolster its presence in the commercial property market, the first deal under new boss Jason Pellegrino following a difficult year.

Domain, which counts newly enlarged Nine as its biggest shareholder with a near 60 per cent stake, will pay up to $17.2 million for the commercial property digital listings platform, which is owned by real estate agencies in Victoria and NSW.

Domain plans to buy Commercialview.com.au through Commercial Real Estate Media, in which it owns a 70 per cent stake. The remaining 30 per cent is owned by commercial real estate industry players.

“Commercial Real Estate has seen tremendous growth in the last three years, benefiting its customers, shareholders and the broader industry,” said Mr Pellegrino, who took the reins in late August.

“The unanimous support for the transaction from CommercialView shareholders is a strong vote of confidence in the upside potential of our commercial real estate business.”

Under the deal, Domain will pay $2 million in cash for Commercialview.com.au, and between $4.2m and $17.2m from the issue of new shares in Commercial Real Estate Media, subject to its performance. The deal is expected to be completed by Friday.

Domain’s announcement comes less than a month after chairman Nick Falloon had to defend Mr Pellegrino’s lucrative sign-on deal, which included a cash bonus of $500,000 and shares worth $2m.

Mr Falloon told shareholders at its annual general meeting last month that “the board conducted a global search for a new chief executive”, and the allocation of the shares to Mr Pellegrino replaced what he was entitled to at tech giant Google.

“The issue of those shares that you’re talking about, simply replaced what he had already had to forgo at the company that he was previously working at,” Mr Falloon said in response to a shareholder question about the share allocation.

“Every one of the people that we were thinking about or interviewing for this position had something similar, if not more. It is quite common to have to make sure that the person that you’re trying to attract does not lose out,” Mr Falloon said.

Mr Pellegrino replaced Antony Catalano, who resigned in January, just two months after the group was spun-off on the ASX by Fairfax Media.

Mr Catalano cited family reasons for his departure from Domain, but last month tried unsuccessfully to stop the $4 billion merger between Nine and Fairfax. He claimed the tie-up was only beneficial to Nine because of the recent drop in the share price of the two parties.

Mr Falloon also told shareholders last month that trading remained “broadly in line” with its trading update in October, which unnerved investors and saw the stock drop 13.4 per cent.

Domain, which counts REA Group as its biggest rival, posted 1 per cent fall in revenue for the first 15 weeks of the 2019 financial year, and a 6 per cent rise in digital revenue.

Domain shares closed 3.9 per cent higher at $2.41 on Monday.