National giant grew from home

By COLIN TAYLOR

After 20 years of farming in the King Country and Bay of Plenty, former World War II fighter pilot Graham Bayley decided it was time for a change, so he joined a real estate agency in Hamilton.

Before long Bayley was joined in the business by his son John, who had had enough of working in mines and on drilling rigs in Australia.

It seemed only logical to form their own family real estate agency, and Bayleys Real Estate celebrates its 30th birthday this month.

The company's first registered office was the modest home of Graham Bayley and his wife, Pam, in Fisher Parade, Pakuranga.

The first commission earned was $300 on the sale of a small house in Manurewa for the State Advances Corporation (Housing Corporation).

Three decades later Bayleys is one of the biggest real estate agencies in New Zealand with 42 offices and close to 800 staff. The firm handles property transactions of more than $4 billion year and, through its alliance with the international agency Cushman & Wakefield, is represented in 49 countries.

In November 1973, just two months after the company was established, the firm bought a two-level building at 89 Great South Rd, Hunters Corner, Papatoetoe.

The staff of three - Graham, John and newly appointed, part-time receptionist Pam Bayley - moved into their first dedicated office as the builders moved out.

A year later David became the second son to sign up, followed by brothers Chris and Tony and then sister Dinah.

Bayleys specialised in commercial and industrial real estate from the start, taking advantage of the rapid growth that was occurring between Auckland and Manukau City as East Tamaki farmland transformed into industrial estates.

Within a few years, expansion required the building of Spencer House in Kolmar Rd, Hunters Corner - Spencer being a common family middle name. Bayleys occupied the 370sq m ground floor.

Though that seemed an enormous amount of space at the time, Bayleys' head office in Viaduct Harbour Avenue now occupies more than 3000sq m.

The first city office was opened in Symonds St in the early 1980s.

The property slump following the stock market crash of 1987 forced the family to rethink the way they operated.

"The late eighties were very difficult," says John Bayley.

"Our casualties were significant because we couldn't pay our sales people as much.

"We realised we had been effectively acting like taxi drivers working for buyers - running around finding them suitable properties. But the banks were now in control and they wanted to know we worked for them as vendors."

The company adheres to this philosophy today, says Auckland central general manager Mike Bayley - Graham and Pam's grandson.

"We unashamedly state that we are not a search agency for buyers - we are here to maximise the property assets of our vendors".

Another benefit to emerge from the post-crash period of the late 1980s was that Bayleys' agents had to learn how to actively market properties and "not just sell to their mates down the road".

The company closed its Hunters Corner office about that time and consolidated operations in the central city. Company founder Graham Bayley sold his shareholding to his sons John and David but remained executive chairman until his death in 1995.

In the past decade the company has introduced "portfolio marketing" for large corporations such as AMP, Fletcher Challenge and State Insurance. This included the company's biggest portfolio transaction ever - the $393 million merger of Brierley Investments and SEA Holdings into Seabil - now Trans Tasman Properties.

The franchising of the Bayleys name throughout New Zealand also began at this time.

A new development initiated by Bayleys in the 1990s was the conversion of older office buildings into apartment blocks. This "saved" some inner-city buildings in a market facing a 30 per cent vacancy rate.

"We started this trend by successfully marketing the conversion of the old BNZ building in Victoria St and the Madison building on St Patrick's Square into apartments," says John Bayley.

This led to the boom in purpose-built apartment complexes.

"I'll never forget the excitement of selling nearly 100 apartments at a cocktail evening to launch the first of these - the Quay West Building," he says.

In the mid to late 1990s, major expansion took place into the residential market. With a national network of offices in place, the company decided as late as 1999 to enter the rural sector with a target - set and achieved - of capturing 20 per cent market share within three years.

Global marketing has taken on greater importance over the past decade. Bayleys has sold more than $2 billion of New Zealand property to Asian buyers, he says. The focus now is also on Australia, the United States and Britain.

The company no longer has physical expansion within New Zealand as a priority.

Instead, the emphasis is on enhancing the skills of its sales force, working closely with universities to develop graduate career agents, training agents in how to maximise the value of properties for vendors and employing complementary specialists in fields such as corporate services, research, valuation, consultancy and property management.

Technology is also playing a bigger role and Bayley's website records close to 100,000 visits a month, says Mike Bayley.

"But virtual tours of properties via the internet will never replace the personal relationship between agent and vendor, which will remain the core focus of our business."