In just three short years, Leapfrog Property Group has firmly entrenched itself within the top groups for real estate in South Africa. Launched in June 2007 amidst considerable market scepticism with a model that promised to turn the staid and traditionally family-owned property industry on its head, the only empowered national South African properties group has forged ahead, operating in over 50 successful offices with a contingent of 350 top agents and its growth target in 2009 to achieve a turnover of almost R3 billion was achieved.

As the brainchild of Jan le Roux, someone whose track record speaks volumes of his vast industry knowledge accumulated over a 25-year career where his initiatives revolutionised the industry. Jan made the decision in 2006 to resign from his then position as CEO and Executive Chairman of the PA Group, to pursue the formation of the Leapfrog Property Group. To lead the management of Leapfrog, Jan recruited Bruce Swain as an Executive Director in 2006. As they say in the classics, the future is unpredictable, and little did these two South African property stalwarts know that little more than a year after launching, they would be steering the fledgling business through one of the worst economic crashes in South Africa’s history.

“It’s been the most riveting journey of our lives. Looking back over the three years since we launched, we have experienced some great successes and beaten many hurdles. Calculated risk taking and a deeply-seated commitment to bringing a property brand to market that has the best interests of professional agents and principals at heart has delivered a brand that has a truly customer-focused work ethic,” says Bruce Swain, Leapfrog MD. “It is our belief that if your foundations internally are solid and conducive to creating an environment for estate agents in South Africa to grow professionally, be financially secure through an innovative income and share structure, and they are led with ethics and integrity, then superior customer service and focus is a natural and inherent progression.”

One of the key success factors in Leapfrog’s journey was bringing a new business model to the South African property market that supported and benefited the agent at every level. It remains to this day the first and only real estate firm to offer shares in the company to its franchisees and agents who work by means of an investment vehicle, which in turn is also linked to an agent recruitment plan that opens up additional avenues for income generation. The Leapfrog structure was also the best opportunity for existing estate agents in South Africa to meaningfully participate in the requirements of the Property Charter.

“Leapfrog’s market entry came at a time when the traditionally family-owned real estate industry was still grappling with the demands of the property charter, where agents and franchises were increasingly dissatisfied with paying commissions that enriched only an elite few and had no long term financial security, and where the marketing budgets of the big players and consolidations were simply drowning out the independents,” explains Bruce.

From the outset, Leapfrog’s management made no secret of the fact that they would aggressively recruit the best agents in the industry. “There were a number of important early successes that really gave us the kick start towards the top – notably the conversions of Homenet-Realty 2000 with an extensive branch footprint in the Eastern and Western Cape, Pulse Realty with its stronghold in the Southern Suburbs of Johannesburg, and Stephenson Properties, an independently owned real estate agency that had been providing properties in Milnerton and surrounds for over 25 years. Many of South Africa’s top independent agencies which had operated independently for years have joined the Leapfrog movement. Most of these agencies were head-hunted relentlessly without success for years by big industry players. The fact that they joined Leapfrog of their own accord speaks volumes about what Leapfrog has to offer.”

These early wins got the attention of the market and many successful conversions followed. Having a professional base of agents on board is a key factor that Swain attributes Leapfrog’s continued growth and survival through the economic crash that ensued just 12 months after the property group’s launch.

“The global meltdown came at a critical stage in the early stages of our business’ growth. The entire industry went into survival mode and across the major brands, closures were rife. The recession has tested the quality of people who came on board and the commitment of the leadership to its franchisees,” says Swain.

In terms of helping their franchisees weather the recession, Leapfrog lowered their monthly franchise fees for eight months during 2009 to help franchisees manage their cash flows, a move which was heartily welcomed. During these eight months the concession represented a collective saving in fees of R1.3 Million.

In 2006, approximately 80,000 registered real estate agents were active in the market. Today there are only around 32,000 agents with current fidelity fund certificates. This fallout is due to three major factors, specifically the economic downturn which has made trading conditions very difficult, the strict lending protocols imposed by banks and the rigorous educational requirements implemented by the South African Estate Agents Affairs Board (EAAB) to professionalise the South African property industry.

“Although restrictive in the short term, the new education requirements have elicited a major ‘clean up’ within the industry. Suffice to say only the most dedicated and qualified estate agents in South Africa are sticking out these new challenges which will only serve to uplift industry standards as a whole,” says Swain. Of Leapfrog’s 350 agents, 170 have already completed and qualified under the new requirements, whilst a further 100 are in the process of completing the RPL requirements.

As for the challenges ahead, Swain is clear on the group’s objectives. “We are actively pursuing between 30 and 40 new franchises within the next 18 months and our goal is to have 90 offices by the end of 2011. The bottom line is that our offering is still unique in the industry and there are prime areas that still need to be filled. Our focus will also remain on the ongoing professional and academic development of our agents far beyond the industry standard requirements.”

When Leapfrog first burst onto the South African property scene three years ago, proposing radical changes to the traditional “family” model of real estate in South Africa, it was met with doubt from many of the big industry players who believed the Leapfrog model was unsustainable. The group has more than silenced the sceptics by outperforming many other established brands, competing head-on with industry heavyweights which have been in business for decades. Turning just three years old firmly ensconced as one of the top property brands in the country is testimony to that.

For more information on real estate in South Africa, contact Leapfrog’s head office on
021 702 3120 or visit www.leapfrog.co.za.