British real estate company Countrywide has signed an exclusive 25-year licensing agreement with Sotheby’s International Realty for master franchise rights in the United Kingdom and Channel Islands, the luxury real estate network announced this week.
"This is a major step forward in our worldwide growth plan," said Michael R. Good, president and CEO of Sotheby’s International Realty Affiliates LLC, in a statement. "This agreement will enable the Sotheby’s International Realty brand to expand significantly in London and throughout the United Kingdom. The leadership of Countrywide is very talented and committed to growing our presence steadily over the next several years."
Under the agreement, Countrywide (no affiliation with a lender of the same name operating in the U.S. that was acquired by Bank of America) will become a franchisee of the international brand and will be the only company allowed to open and run offices using the SIR brand name in the U.K. The company will have the option of extending the agreement beyond the allotted 25 years, Good told Inman News.
Countrywide operates more than 1,200 branches in the U.K. under 41 estate agency brands and is the largest estate agency and property services group in the country, according to the announcement. Countrywide’s other brands will remain separate.
The reputation of Sotheby’s International Realty as a luxury brand stems from its association with Sotheby’s Auction House, established in London in 1744. Sotheby’s International Realty was founded in 1976.
"The Sotheby’s International Realty brand is iconic and offers a huge potential for quality growth," said Robert Scarff, managing director of Countrywide’s estate agency division. "The strength of the U.K. property market for foreign investors makes this an ideal situation for us."
To handle its new luxury brokerage business, Countrywide will create a subsidiary called United Kingdom Sotheby’s International Realty.
For now, that subsidiary owns and operates one office it acquired through the agreement: the Sotheby’s International Realty London office in the city’s Mayfair neighborhood. The company will rename it London Sotheby’s International Realty. NRT LLC, the largest owner and operator of real estate brokerages in the United States, according to Real Trends, previously owned the office.
NRT is a subsidiary of Realogy Corp., which purchased the licensing rights of the SIR brand name for a 100-year term in 2004 under its previous incarnation as Cendant. Before 2004, brokerages could pay to use the Sotheby’s brand name to market luxury properties, but the licensing agreement with Realogy created a full-fledged Sotheby’s International Realty franchise system.
In the six years since then, SIR has grown from less than two dozen affiliates in the United States to about 500 offices in 38 countries and territories worldwide (see story).
"London is the cradle of civilization for the Sotheby’s Auction House and we now have an opportunity (to expand) in a country that very much knows the quality and the prestige of the name Sotheby’s," Good said.
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