You’ll have heard the old joke about the two great auction houses: Christie’s are gentlemen pretending to be businessmen; Sotheby’s are businessmen pretending to be gentlemen. But when it comes to the UK property arm of the latter, you could be forgiven for wondering whether even the pretence has now been put aside. George Azar, the new man at the helm of Sotheby’s UK property arm, is a businessman with a capital ‘B’. And he makes no apology for it.
At a packed launch event at the Sotheby’s auction house on New Bond Street last November, guests including Nick Candy and the man behind the Nammos restaurant chain, Petros Stathis, jostled for position to hear a speech in which Azar likened his venture to an iPhone, disrupting the incumbent BlackBerry-like firms that currently populate the London market.
Poaching top talent
Having previously acquired the Sotheby’s real estate franchises for Dubai and Saudi Arabia, Azar took control of UK Sotheby’s International Realty in January 2023 and immediately set about transforming it. What was once a somewhat sleepy boutique with just a handful of agents and a modest share of the London market has been supercharged by Azar with a vast investment that has been used to unashamedly poach top agents from rival firms, luring them with lavish remuneration packages that far outstrip their deals with previous employers.
The brokers who have jumped ship to join the souped-up outfit stand to earn £400,000 in a single year if they generate £1 million in revenue for the business (which could be achieved on £50 million in sales at a commission of 2 per cent). Several of the most prolific signings will expect to earn considerably more.
Among those to have made the leap is Becky Fatemi. The Iranian-born Londoner, who has been pictured partying with the likes of Maya Jama and Naomi Campbell, is one of the capital’s best-known and best-regarded agents and comes on board thanks to a ‘merger’ between Sotheby’s and the business she founded, Rokstone. Another eye-catching name is Marcus O’Brien, an accomplished young star of the industry who many saw as the dauphin at Beauchamp Estates, heir apparent to the legendary Gary Hersham. In total, 40 agents have been tempted from rival firms.
‘Our idea was to go out and recruit people who thought like us,’ Azar tells me. ‘People who want to be entrepreneurial, who want to be valued for their timing, who want to get paid top dollar.’
Sharks in a fish tank
But bringing together such a large number of highly ambitious people is not without its risks: ‘It’s like putting sharks in a fish tank,’ Azar says. It falls to him and new managing director Claire Reynolds, who joins from Savills, to ‘support’, and ‘monitor’. ‘We’re there to make sure they don’t eat each other. They might bite each other occasionally, but that’s fine.’
Azar says the plum remuneration packages that he’s able to offer his new recruits are a result of a keenly focused business model. ‘[We’re] able to pay high because we don’t have fat on the bone. We don’t have middle management, we don’t have different departments. We’re a pure transactional company. If you kill, you eat – that’s the model. Your bonus is not up to the discretion of George or the management, it’s up to your performance. If you do a deal, you get paid.’
There is also an unwavering focus on the prime and super-prime market, both in terms of location and price. The company will cover six key areas of prime central London, only facilitating sales north of £2 million and lettings above £6,000 per month. Working from the Salesforce platform, brokers are able to keep a maximum of 25 leads (from a total pool of around 3,500) for themselves at any one time. Apart from these guardrails, they have complete freedom. In contrast with other firms, the model instituted by Azar at Sotheby’s means no agent has a divine right to a certain postcode or price bracket. ‘They call it expertise,’ Azar says of systems that reserve a ‘patch’ for particular agents. ‘I call it limitation of income.’
The other model makes little sense, he adds. Buyers ‘all think they want to be in Mayfair, but then they might end up in Kensington. It’s like when you walk into Louis Vuitton or into Chanel – you look at the bag in the window, but eventually you might end up buying something else inside, depending on what actually works for you. So our job is to have a [broad enough] menu within these price-points.’
Economies of scale
Globally, Sotheby’s International Realty generates £130 billion in annual sales, with 1,075 offices and 26,000 sales associates spread across 81 countries and territories. Azar, who worked for 21 years in banking on deals for sovereign wealth funds and activist investors before moving into property, is among the 200 or so franchise holders. In addition to the UK business, he and his partners have the Sotheby’s realty franchises for Saudi Arabia and the UAE, where he says the firm has 70 per cent of the super-prime market and 95 per cent of the market for new branded residences. ‘Savills and Knight Frank are nowhere to be seen next to us in the Middle East,’ he notes.
Azar believes the UK business will benefit from economies of scale from centralised functions for marketing, content and customer service, many of which are based in Dubai. Call centres remain open on Saturdays, Sundays and even on Boxing Day.
Another side to the UK operation is its partnership with the auction house itself. One of the agents to join the firm noted privately that the $8 billion in annual sales generated by Sotheby’s represents a huge opportunity. To help realise it, Azar has done a deal that secures a presence for the real estate business within the Sotheby’s premises on New Bond Street for a minimum of two years. A desk, manned by members of Azar’s team, will serve as a way to capture passing custom and field enquiries from potential buyers.
As one might expect, Azar has set ambitious targets. When we speak, following the launch event last November, his sights are set on being the largest agency, in terms of listings, across his favoured six areas of prime central London. ‘I’m already probably third, and will quickly be second,’ he says. ‘We need 50 listings to get there.’
Make or break
Once the ink has dried on the 2023 accounts, he predicts the value of transactions will total around £500 million. ‘This is how we work. In Dubai we do a couple of billion of dollars. So we should be easily making a billion pounds within the next two years.’
Part of the strategy will be to increase the fees charged on transactions. Brokers in New York can charge 5 per cent on the value of a transaction. ‘Why is London at 1 per cent?!’ Three per cent is a realistic target here, he believes.
On an individual basis, brokers will be expected to bill £500,000 per year. ‘That’s the minimum target.’ But some industry observers have noted that in such a competitive environment, not all new Sotheby’s agents are likely to succeed. One experienced operator – a football fan – told Spear’s that some new Sotheby’s signings might soon be compared to a centre-forward who’s built up confidence by scoring tap-ins provided by talented teammates. In a leaner operation, there may be fewer chances to convert.
It’s a risk that Azar himself acknowledges. ‘I’m not saying it’s going to be a 100 per cent hit-ratio,’ he says. ‘But if I get 80 per cent of the people to stay, I’ve done a very good job. If they have what it takes – and I do think that most of them do – we should be able to do well. We don’t want to be the norm. We’re not coming here to compete with [the incumbent] agencies. We’re coming here to play out our own game, and we believe people will listen to us if we perform.’