In 27 years John McGrath has built an enviable real estate operation. Now he expects the growth to accelerate, with more company offices, more franchises, more top-earning agents, more rentals, more mortgages and even more brands.
On Tuesday   December 7, after an oversubscribed $65 million IPO, McGrath will list.
"This is probably the most important point in the history of the company," said Mr McGrath, who at 52 remains committed to the business. "This is the point at which the growth of the company is really going to start increasing." 
The business trajectory attracted the investors. Mr McGrath, using the graph that shows how the business had grown regardless of the market, convinced them to look past the peak of the Sydney boom.
Now it is McGrath's competitors that should take note. The company has 3.2 per cent of the $230 billion in home sales every year, and 7.2 per cent in NSW, according to real estate analytics giant, CoreLogic. The market is worth over $4 billion in sales commissions and McGrath wants more of it.
Privately, Mr McGrath has looked hard at Realogy, the $US6 billion ($8 billion) heavyweight of US real estate, which claims 27 per cent of US home sales with franchise brands like Century21 and Coldwell Banker, and fully owned operations like The Corcoran Group in New York. In Australia, market leader Ray White has less than 10 per cent.
"If we are going to become the consolidator in the Australian market ??? a publicly listed company is the best way for us to achieve our goals," McGrath said.
The listing gives McGrath, who claims an aversion to debt, the capital to expand. The company can use scrip as well as cash to buy businesses. It will soon establish a high-performance plan to attract and hold top negotiators. And at the moment there is an arbitrage between the price of an unlisted real estate business and higher valuations on the stock market.
"If you are buying at four times [earnings] and listing at eight to nine times that's a healthy arbitrage," Mr McGrath said. "But people have to understand it's not that simple because you need to continue to grow the numbers, and grow and retain the team. That's where we think we are a bit unique."

Hub-and-spoke model preference
Like the competitors, McGrath offers real estate sales, property management, mortgage broking and sales training.
But unlike the competitors, he is not a believer in blanket suburb-by-suburb franchises but in a hub-and-spoke model of regional super offices and satellites. And unlike the competitors that have pure franchise businesses, McGrath is a hybrid of company-owned offices and franchises.
Mr McGrath says the structure allows the business to grow in several ways.
Key franchises can be bought, as with the purchase of the franchise operation in Sydney's northern suburbs run by Shane Smollen and for which McGrath will pay up to $70 million, in cash and scrip.
Another option is to buy a complementary franchise group, and run a parallel brand, similar to Realogy. 
The third option would be to buy what McGrath calls a "very high quality company owned cluster."
"These are businesses, of between four and fifteen offices, that are very well run, very successful brands in their various communities and very profitable."
Such businesses would fit the high performance McGrath culture. On average each of McGrath's over 500 agents sells 20 properties a year and earns gross commission of $420,000.
"We think in a big country like Australia and NZ, there will be a number of acquisition opportunities that will fit that description. We're not talking about 40 or 50, we're talking about four or five over the next half a dozen years."
Melbourne is a stated objective. "I think Melbourne is a really good market because Melbourne's got some of the best agents in the world," Mr McGrath said without mentioning names. "The type of businesses and acquisitions opportunities that I've just spoken about, Melbourne certainly has the largest number in Australia." 
(Many think the Hodges franchise group in Melbourne is a target but Hodges chief executive Carmel Baker, said the firm was not in discussion with McGrath. "This is all some crazy rumour trail," she said.)
Mr McGrath says he is not in a hurry. "Nothing could be really further than the truth for us. Ours is a much more long term, deliberate acquisition strategy. We're not reliant on the acquisitions for our growth. Our growth is there anyway. The acquisitions will be the icing on the cake."
The group is on track this year to organically add four more company offices with 22 per cent more salespeople and 16 per cent more property sales. It expects a 19 per cent increase in properties under management to over 8000. And, at the current rate, it will add 15 franchise offices this year, generating another 20 per cent increase in sales.
All that growth assumes no increase in house prices, although Mr McGrath forecast that as the boom subsides, listings will rise. Such organic growth will, according to the prospectus, deliver a net profit after tax 15 per cent better than the pro-forma figure for the 2015 financial year.
The biggest challenge to the vision would be a digital breakthrough that allowed sellers and buyers to deal direct, cutting out real estate agents.
Mr McGrath, who is a director of digital advertising giant REA Group, takes comfort from Warren Buffett's investment in real estate agency.
"I think that it's an industry that requires human input, and agents that do it very well add a lot of value," Mr McGrath said. "Australia is also about as cheap as you can get in terms of hiring agents to do the job to sell your property. So I think that Australia is in very good shape for the next 10, 20, 30 years in terms of our industry."