‘We sold more new homes last weekend than we did in the whole of 2011’ - Mark FitzGerald
Co-founder of Sherry FitzGerald, and winner of The Irish Times Distinguished Leader in Business award, on recession, recovery, expansion and the future
‘We survived by losing money, which we saw as an investment and the right thing to do,’ Mark Fitzgerald on how estate agent Sherry Fitzgerald survived the recession. Photograph Nick Bradshaw/The Irish Times
Relaxing on a large couch in the first floor drawing room of his family home in Ranelagh, Sherry FitzGerald co-founder and chairman Mark FitzGerald neatly sums up the extent of the recovery in the Irish economy over the past six years.
“We sold more new homes last weekend than we did in the whole of 2011,” he says.
The weekend in question was April 14th and 15th when Sherry Fitz sold 110 new homes at developments in Dublin, Cork, Limerick and Galway; in the whole of 2011, it sold just 85 new units.
Of course, there were extenuating circumstances. Ireland had just suffered the world’s biggest banking and property crash in modern times, and 2011 was the first year of the EU-IMF bailout programme brought about by the fact that no-one wanted to lend money to the State.
“We sold 4,200 new homes in 2002, went down to 85 and now we’re back to 110 in one weekend,” he says. Survival was the order of business at the start of this decade, with the company able to use strong cashflows from its London subsidiary, Marsh & Parsons, to subsidise the Irish business.
“We survived by losing money, which we saw as an investment and the right thing to do,” FitzGerald explains. “We had a London business that was generating cash so we decided to pour it into a black hole [in Ireland] and tried to maintain employment and provide a service. To hold people’s hands amid the pressure they were under. We simply tried to maintain the service, keep the branches open. Staff travelled with us, taking pay cuts and being flexible.”
Things were so tight financially, that when the big ‘G’ was hanging off the front sign of its Castleknock branch, FitzGerald didn’t get it fixed for six months.
“The reason I didn’t get it fixed is because I thought by not doing those things I could keep an extra person employed. That’s how I was thinking at the time.” When he was younger, and ambitious to transform the public perception of estate agents, such sloppiness would have driven FitzGerald “mad”. But he’s mellowed since.
Last year, FitzGerald stepped down as chief executive of Sherry FitzGerald after 35 years, taking on the role of chairman. It marked a generational shift in leadership at the estate agent, with Steven McKenna, 40 years of age and an accountant by training, taking the reins.
A son of the late former Taoiseach Garret FitzGerald, Mark became an estate agent on leaving school, selling his first house on Emmet Road in Inchicore in 1975 for the equivalent of €8,000.
“It was a three-bed terraced house,” he told The Irish Times last year. “An executor sale. There were no photographs of the house. It was a different world.”
In 1982, he co-founded Sherry FitzGerald, which was formed from the merger of FitzGerald and Partners and Sherry & Sons. It sold 40 houses in its first yearand operated from one office on Merrion Row for the first seven years. It is now the country’s biggest estate agency with a 15 per cent market share, and 97 branches across the country (25 are company owned).
FitzGerald became chief executive at just 25 and under his leadership, Sherry Fitz developed a franchise model that gave it coverage in every county in the Republic. It floated on the stock market in 1999 before being taken private again, expanded into London, and established a commercial property business, partnering in 2016 with global agent Cushman & Wakefield.
He was also a driving force in establishing the property portal MyHome.ie in collaboration with a number of rival estate agents and AIB. It was sold to The Irish Times for €40 million in 2006. On setting up MyHome he says: “It was a lucky one but it was a good decision. The business case in terms of the actual numbers wasn’t obvious. We had no idea if it would make money.”
Perhaps more important is the culture that has been instilled within the business. The theme of the company’s launch brochure was “teamwork” and the mission was to set a higher standard for market behaviour.“We always tried to stay a step ahead and be best in class,” FitzGerald says. “We didn’t always succeed in everything. We made mistakes but by and large it worked out.” The company’s successes over many years and his innovative leadership are among the reasons why FitzGerald will be honoured at the inaugural Irish Times Business Awards as Top 1000 Distinguished Leader in Business.
The agent also has a rule that staff can’t buy properties being sold by Sherry Fitz – something of a problem for those living in certain parts of Dublin, where the company trades a large percentage of the stock. The rule applied to FitzGerald when he purchased his current home in 2005.
Ironically, Sherry Fitz had previously sold the property twice, when it was laid out in flats.
FitzGerald has experienced a lot of economic cycles during his career but none as brutal as the recession post the 2008 crash. He thought the “correction” in Irish house prices would be of the order of 20 per cent; “it should have been 40 but it was actually 60. We had a greater crash than we should have had,” he says, arguing that policymakers were too slow to respond to the crisis.
How did he cope with the sudden shock to the business? He attributes his reaction to growing up in a “household of politics”. “It armed me with resilience that a lot of other people wouldn’t get. Dealing with hunger strikes and Brighton bombs and the Troubles and terrible tragedies that were lived in our household.”
He could have cashed in his chips and taken early retirement after receiving an approach to sell the business in 2011. “Oaktree [ Capital ]approached us in 2011 to enquire if we would be interested [ in selling ].”
The talks with the US private equity group “went a certain distance” before breaking off. “We had Marsh & Parsons [in London]. I don’t think they fully comprehended how good a business M&P was. I didn’t need the investment.”
Sherry Fitz sold Marsh & Parsons that same year for close to €45 million, a move that left the Irish parent group debt free with money to invest locally.
Mark was the youngest of three children – former ESRI economist John, and Mary, an artist, being the others – born to Garret and Joan FitzGerald. Garret became a senator in 1965 before going on to serve as a Fine Gael minister from 1973, as leader of the party for a decade from 1977, and as Taoiseach twice in the 1980s.
What was he like? “He was banging away at the typewriter and was a mile a minute. It was an unusual childhood. For me to have a relationship with my father I had to join his life. Much and all as he loved me, he hadn’t the time to spend on the things that I would do with my children, like going to activities and sport.
“In ’66, I remember going to the Waterford by-election, spending two weeks in mid-Cork in the summer of ’72 on that by-election. I joined his activities rather
than him joining mine. I enjoyed the people side of it and began learning about regional Ireland from an very early age.”
Where did the bug to be an estate agent come from? “I was slightly different to others in the family in that I wasn’t academic. I came across a street directory in my father’s study in the house, the 1926 Thom’s Directory, and I started reading it to see who the people on our road were.
“Then I started reading The Irish Times houses on a Friday. I started cutting out the ads in The Irish Times and became interested in older architecture. The heritage interested me as a hobby.”
His father’s busy political career also gave young Mark a certain amount of freedom.
“When my parents were away, and they were away a lot, I had a fantastic time, particularly during Ireland’s first European presidency. I had a free house for six months.
“My parents were away for my Leaving Cert. It’s not a criticism but it’s just the way it was. From 15 to 18 I was probably a bit wild, but then I went into auctioneering and settled down. My dad was scratching his head wondering how I was going to turn out.”
He still has close ties to the Fine Gael party and is a former director of elections.
Did he consider a career as a politician? “I did consider it but it never happened. First of all, I was happy doing what I was doing and, secondly, I never thought I would ever hold a candle to him and would always be in my father’s shadow. He was a tougher man than I was. I’m probably too sensitive to be a politician, not particularly big into confrontation or attritional behaviour. Nor was he, but it didn’t bother him particularly.”
A lot has changed in the more than 40 years since FitzGerald became an estate agent. He remembers how buyers had to wait six months just to get a mortgage application from a bank.
“The estate agent held all the information [ in the 1970s ]. Did estate agents always tell the truth? That was definitely an issue when I started. The consumer was at a much bigger disadvantage. It’s a much more level playing pitch now.”
On the current housing shortage, FitzGerald says there is no silver bullet to solve the crisis. He wants someone to take responsibility for meeting the targets set down by the Minister for Housing Eoghan Murphy, and argues that thereshould be a “unified national delivery body” to implement the Government’s plan, otherwise “you won’t get anywhere, even just in Dublin” where there are four local authorities. He supports high rise (25 to 30 storeys) buildings in the right locations, previously believing this was preferable to the sprawl of commuter belts around Dublin.
FitzGerald has changed his view on commuting, seeing it as a way of providing affordable housing for construction staff working in Dublin.
“Those who are happy to travel 30 miles, let them travel 30 miles. The greatest strength that Ireland has is its small communities. Look at the power of small towns and villages in Ireland.”
Looking ahead ten years, he believes there will be more information sharing with buyers and sellers. Sherry Fitz invested €1.5 million in the past year in its technology platform.
“We are investing quite a lot of money in that. We have an internal project …. an evolving thing being rolled out every quarter. Everything that we do is recorded online. It’s more participative.”
He sees fees coming down in the years ahead as technology plays a greater role but doesn’t foresee a time when robots might replace humans for viewings. “No. Estate agency fundamentally is a community-based thing. We need to support the community and understand the marketplace. It’s a very intense relationship. Being able to match people with houses is fantastic.
“That’s a skill that no robot can replicate. Technology and people will meet somewhere in the middle. We just need to be a step ahead, not a step behind.”
Can Sherry Fitz remain an Irish-owned, independent agency?
“We’ve got a new CEO and a younger management team coming through,” he says. “It needs to keep performing and offering the service. I don’t see the brand disappearing. I think it can remain independent. There’s possibly a chance to look at things like London and take the brand elsewhere, possibly to Northern Ireland.”
FitzGerald will be 61 in June. He continues to be the largest shareholder with a near 40 per cent stake. How long more will he remain engaged with the business?
“For the next few years I’m happy with the way things are. The handover won’t happen overnight and I want to see it through, see that we have the right branch network, that the new homes business begins to help shape great design, and develop our mortgage broking business because I think we can be the guardian angel to people [for mortgages].With our brand and geographical reach we have the potential to develop that business [mortgage broking]. It’s very important for consumers to get real choice in the mortgages they take. At the moment, it’s five per cent of our overall business but I think it can grow.”
He sees himself actively involved for “probably four or five more years. Much and all as I love the business and the people I work with I can’t go on forever.” His immediate goal is to “get fitter, lose weight, and spend more time in the west of Ireland”.
He’s got a Fitbit and is trying to do 10,000 steps a day. “I only did 8,000 yesterday but it’s going ok.”