OpenRent's about turn underscores Rightmove's competitive position

(Alliance News) - Thursday's late-day announcement from Rightmove PLC that OpenRent has returned to the platform is welcome news, an analyst on Friday said.

The Milton Keynes-based online property portal said lettings agent OpenRent has entered into a new membership agreement, only days after saying it had failed to strike a deal.

On Tuesday, Rightmove said its contract with OpenRent would end at the start of September after they failed to agree renewal terms.

Rightmove said OpenRent accounted for less than 8% of its lettings listings in July.

Panmure Liberum analyst Sean Kealy said it was "welcome news".

"We believe OpenRent likely chose to return to the platform following landlords' reaction to its decision to leave, noting that only once the news entered the general press did OpenRent execute a full volte-face."

Kealy believes this underscores the strength of Rightmove's competitive position as CoStar attempts to scale OnTheMarket.

Rightmove is facing increased competition in the UK following CoStar's acquisition of OnTheMarket PLC for GBP99 million, completed in December last year.

Kealy sees two possible reasons for the change of position.

First, that OpenRent was attempting to acquire a discount by playing hardball, but that Rightmove stood firm by its value proposition and on realising that no discount would be forthcoming, OpenRent gave in.

Second, that this was a genuine business decision, but once made widely public, OpenRent was forced to reverse it.

Kealy thinks the latter interpretation is the most likely.

Overall, Kealy thinks this underscores Rightmove's continuing competitive strength in light of CoStar's attempt to disrupt the industry.

Shares in Rightmove rose 1.2% to 538.80 pence in London on Friday.

By Jeremy Cutler, Alliance News reporter

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