McGrath tackles the luxury Airbnb market with Luxico partnership

Real-estate agent McGrath has announced a new partnership with luxury home-hotel operator, Luxico.

The latest deal sees franchises in Sydney’s lower north shore leasing high-end homes through the service, bolstering McGrath’s plans to compete in the expanding property-sharing rental space perpetuated by platforms such as Airbnb.

Properties in Neutral Bay, Northbridge, Mosman and Chatswood will be up for lease, with the hefty rental price tag of $1000 to $2000 per day under the Luxico brand.

Luxico provides top-end property management, with an array of professional services, such as a hotel-style, 24/7 concierge service, in addition to home services like dining and groceries.

Michael Conolly, McGrath head of network property management said the partnership was a reflection of evolving consumer demand in the real estate space.

“This is the evolution of real estate and property management in Australia; we have disruptors coming into the marketplace, and there will be others,” Conolly said.

“It’s a natural move and we are being proactive about it, creating models that are not just about servicing clients, which is our primary focus, but also clients that are looking to rent.”

McGrath’s latest partnership signals a further push into the property leasing and home-sharing market, following a deal with Airbnb management service Hometime reported earlier this year.

“We started to see clients that were gravitating away from the traditional rental space and opting to join Airbnb,” said Conolly.

“After a period of time, we decided to partner with someone who was focused on this type of work and we were able to go to our clients and say, ‘rather than go out on your own, stay with McGrath and be protected’. Regulatory requirements are constantly changing, so for a fee we can help convert the property to an Airbnb model and if it fits the standards, you can see that increase in revenue.”

The continued diversification of McGrath’s property leasing services is opening the door for the brand’s franchise partners to increase profitability and generate greater returns.

“After we announced the partnership with Hometime, the Neutral Bay franchise group was inundated with clients wanting to convert their property to Airbnb,” Conolly said.

“What was interesting about that, was even when they found that their property didn’t qualify, they still wanted to sign up with McGrath anyway.”

For Luxico co-founder Tom Ormerod, the McGrath partnership presents a mutually beneficial relationship, with the potential to greatly influence both business’ existing networks.

“Out of the relationship, we’re looking to get a number of new homes, but also potential bookings. We have between 60 and 100 listing opportunities come to us, and many of those we can now push to McGrath to provide services,” Ormerod said.

Ormerod also suggested the McGrath partnership would further the brand’s expansion and development efforts, opening up the potential for partnership opportunities, similar to that seen with Luxico’s Byron Bay site.

“Luxico operates in six locations; we are the only group that has on-ground presence across the East-Coast of Australia, and we are looking to expand to all major destinations. We’ve identified opportunities on the Gold Coast, and Noosa, so we are looking at different models to make that work,” Ormerod said.

“It’s got to be localised, we are still a service provider, and to be successful in that space and provide that care and service, it really needs to be a local, that knows the area and knows the business.”

The Luxico partnership will be trialled through the Neutral Bay franchise group, and following successful integration, Conolly said further expansion would be considered, however reiterated that not all franchise locations would fit the requirements.

“Of course, areas where we have properties that meet the requirements to match with Luxico, we will look into that model, and then in areas where Airbnb presents an opportunity, we will be rolling that out in our offices,” Conolly said.

“It’s not necessarily for all of our offices, you have to have something that is attractive that niche Airbnb customer.”