Justin Clarke is the co-founder of One Africa Media (OAM), Africa’s largest online classifieds group. OAM owns some of Africa’s most prestigious and lucrative online properties, chief of which is PrivateProperty.co.za, South Africa’s leading property website.
Where it all Started
1991 marked the year the Justin Clarke began his sojourn in the world of Property Development. After putting a proposal to the bank, he bought the property next door to his father’s Medical practice in Umhlanga Rocks Drive, in Durban and began to draw up plans to zone it for Commercial development, building a combination of retail units, and Medical suites for the area. This marked the beginning of a passion for Justin, where he became hooked on property.
From here on he began to develop and sell off niche residential, entry-level townhouses on Durban’s Berea. The initial smaller spec developments worked well, and he began to gradually develop larger schemes. To keep costs within a target range (which was between R200 000 and R250 000 at the time) for a three-bedroom townhouse, Justin developed an interest in the direct marketing of the units. In the early 1990s South Africa was brimming with opportunity and in anticipation of the lifting of sanctions Justin invested heavily in Industrial buildings in the Jacobs industrial area, a decision that nearly sunk him.
“it looked so good when the deal was going down that I geared myself to the hilt, then the area started to implode. At one stage my total rental income only covered the rates bill. I exited by selling off some factory space literally before the bank foreclosed” says Clarke “I guess that is when I realized that reading the market was everything”.
The Privateproperty.co.za story began in 1998 with a rudimentary website and no permanent employees. The idea was initially totally disruptive and the hypothesis was that if there was a perfect marketplace for buyers and sellers to meet there would be no place for an estate agent and the result would disrupt the real estate industry.
In fact Justin only became involved in Private Property later in 1999, giving the company a more structured business plan and moving it into a converted outhouse at his home. His intention was to continue with property development, but soon become hooked on the internet.
PrivateProperty sent jitters throughout the South African Property industry and a number of systematic attempts were made by real estate heavyweights to shut the company down. The main concern was that Private Property effectively removed the need for an estate agent. Private Property would take an upfront fee of between R3 000 and R5 000 and provided the seller with all the tools needed for the sale of their house, putting buyers and sellers in direct contact with each other through the website and its SMS alerts system. The company also offered a sale facilitation service free of charge where an employee of the company would help the buyer and seller close the deal. The revenue derived from the Mortgage origination was the largest revenue stream for the company. “
The company became the pariah of the real estate industry. The estate agency industry was not happy with the market share that the young upstart company was gaining but all was not well. Providing a service virtually for free means there is no margin, and making any surplus to fund growth was tough.
Looking back on that time, Clarke says, “The fall back for us was to get closer to the transaction, and what no one knows is that a few deals helped us keep the doors open.“ We bought a 100+ unit block of flats, Boschendal, in the West Rand, opened the sectional title register and resold then prior to transfer making a comfortable profit. It sounds dumb now but we had become estate agents working for free and that does not balance the books” Clarke adds.
There have been other property transactions that have helped keep Private property well funded. Some of the founders bought a commercial building in Kent Avenue, Randburg where Private Property was based. The building was vacant and was acquired for less than R4 million. It was a fairly well built modern building with all the correct fundamentals. The building was sold for not more than two years later for around R11 million with almost full occupancy.
From mid 2008 Privateproperty changed from a private seller website and opened to estate agents. It is now South Africa’s busiest property website with more than 1 million unique visitors, or 3 million visits a month and over 230 000 properties for sale and to let.
Since 2012, the company has expanded across Africa and has become Africa’s largest online classifieds group, focusing on Jobs, Cars, Property and Travel, with central offices in South Africa, Kenya and Nigeria and satellite offices in, Ghana, Tanzania, Mauritius and Uganda. Serving markets with over 500 million Africans, the company, now called “One Africa Media” (www.oneafricamedia.com) operates in the world’s fastest growing economies where connecting buyers, sellers, employers and jobseekers adds significant value to people’s lives.
A significant portion of OAM growth was funded by Tiger Global Management, the New York-based venture capital fund, and the multinational listed Australian recruitment company SEEK. It is purported that they have jointly invested in the region of $60 million USD in One Africa Media
Justin expects OAM to grow into a $1bn company within the next five years.. “ We operate at a very fast pace and the Internet space is evolving really fast across our continent, so nothing is certain. But we are set on building a great business and the opportunity is really huge”. “If we don’t screw it up I guess the holy grail would be an IPO on the Nasdaq” Says Clarke
The mind is an incredible organ, and no doubt it is those with passion and complete belief that win. The world is full of very cleaver people but it is the obsessed ones, the outliers that stand out.
In January 2009, while vacationing with his wife, Justin was involved in a skiing accident that left him with a number of severe injuries including 3 crushed vertebra, head and neck injury’s, two punctured lungs and a dislocated sternum. After undergoing two separate operations he emerged paralyzed from the chest down.
For a man with a passion for extreme sports, skiing, diving and cycling, it would have been understandable if this diagnosis broke his spirit. He refused to abandon his love of sports, and took to strengthening his arms and shoulders through a strict regime of swimming, competing annually in the Midmar Mile swim and has completed 4 42km New York marathons on a hand cycle.
Recently Justin Clarke was the recipient of the South African division of the EY World Entrepreneur award in the ‘Emerging’ category, his story offering a testament to how far determination and belief can take you.
Justin’s Tips for Investors
• WANT TO SUCCEED – if you are decided in your goal, just keep plugging at it.
• RELAX – Property is a long-term investment and over time you will win.
• DON’T OVERGEAR – The mistake I have made in property is having to sell short. Make sure that you are not over geared, and keep a little cash on hand in case you are over optimistic.
• DON’T PROCRASTINATE – Do not be afraid to make mistakes, even a wrong decision can be a useful lesson.
• READ – Knowledge is king, and it costs nothing…
• BE OBSESSIVE – stick to your plan and don’t let others dump their fears on you.
• FOCUS – Become a specialist and stick to your chosen area/property type
• PEOPLE – Surround yourself with great people who are better than you. The faster you can replace yourself, the faster you can grow to the next level.
By Drew Hook