Mark Fitzgerald, the head of Sherry FitzGerald, has been busy branching into property-related financial services, writes Jane O'Sullivan, Markets Correspondent.

Mark FitzGerald is very keen on demographics. The head of Sherry FitzGerald, the largest estate agent in the country, believes that population trends will underpin the company's business for the foreseeable future.

Perhaps not surprisingly for one who hails from a family of economists - his father is former Taoiseach and economic commentator Garret FitzGerald and his brother is ESRI economist John FitzGerald - he is placing his faith in numbers.

"Fundamental to us is the demographics. Eight hundred thousand jobs have been created here in the last 10 years and these people will be the future consumers of property," he says.

He plans not just to sell them houses and apartments but to arrange their mortgages as well. And for those with money to spare afterwards, Sherry FitzGerald will provide property investment opportunities.

Supporting the company's move into the financial services area is its strong and well-established position in the residential housing market.

Founded 20 years ago after a merger between two Dublin-based auctioneers, the company has grown from a one-office firm with a staff of 12 to a 180-strong operation with 78 offices in 25 counties.

By the end of next year, Mr FitzGerald expects to have grown his network of outlets - which includes 67 franchised branches - to 100. Tallaght, Swords and Clondalkin are among the areas earmarked for expansion in Dublin while Monaghan remains the only county in the Republic where it has no presence.

Despite the current economic downturn and growing uncertainty over the employment outlook, Mr FitzGerald remains confident that the demographic situation will continue to lend support to the property market.

After falling by around 5 per cent in the second half of 2001, he estimates that house prices have risen by around 13 per cent in the first six months of this year and is forecasting full-year growth of 20 per cent.

Sherry FitzGerald forecasts a trend growth rate of just over 10 per cent going forward as the emergence of young consumers, changing housing patterns and the limited stock of existing houses support the market.

And Mr FitzGerald has the demographic statistics to support his argument. He believes, for instance, that the new homes market will remain strong for the next decade at least due to the limited housing stock in the Republic.

In particular, he cites the lack of an elderly population which would ensure a steady supply of houses on the market as is the case in British cities.

He points out that an Irish person born in 1925 had just a 50 per cent chance of being alive and living in Ireland in 1960. Meanwhile, at just 350 houses per 1,000 of population, Mr FitzGerald believes the Republic has some way to go before it gets to the 425-450 level seen elsewhere in Europe.

Mr FitzGerald also notes that house prices in the Republic remain below British levels while Dublin still lags London. "A new house in the UK costs €200,000 compared to €190,000 in Ireland, while a second-hand home in the UK costs €290,000 against €214,000 in Ireland," he says.

Despite the volatility evident in the Irish property market in recent months, Mr FitzGerald remains happy with the company's exposure to it. "I am not apologetic. Our business is dependent on the Irish property market because that is dependent on demographics," he says.

Nonetheless, the company is focusing on using its well-known brand name to build other income streams, albeit property-related ones.

While DTZ Sherry FitzGerald, the commercial property arm, is currently suffering the effects of the global downturn, the estate agent has been busy branching into property-related financial services which now account for about 10 per cent of its revenues.

In its bid to become a "one-stop shop", it has just launched Sherry FitzGerald Finance. A franchise agreement with mortgage broker, Simply Mortgages, it will provide advisory services to the estate agent's 67 franchised branches around the State.

It will offer much the same service to the regional network as the Mortgage Insight business does for Sherry FitzGerald's businesses in Dublin and Cork, earning commission for taking the hassle out of arranging a mortgage.

"There is room for a very significant mortgage broker to emerge and we hope to be a significant part of that," Mr FitzGerald says.

The company is also attempting to build a recurring income stream through Sherry FitzGerald Capital, which provides private investors with an opportunity to invest in the international property market.

It has just raised an additional €10 million from investors for a British commercial property fund, to add to the four commercial and one residential funds already on offer.

Despite the progress made in building a national brand and expanding its financial offerings, Sherry FitzGerald's shares have failed to impress since its flotation on the Developing Companies Market (DCM) of the Irish Stock Exchange in April 1999. Currently trading around €1, they are worth just half their flotation price of €1.99.

But Mr Fitzgerald, who became a paper millionaire through the flotation, believes it was the right move for the company and remains committed to the stock exchange listing.

"It has helped us to build our business. We have a better business than we had three years ago," he says.

The fact that just 30 per cent of the shares are freely traded - with some 70 per cent remaining in the hands of staff and directors, including Mr FitzGerald's 11.5 per cent - has prompted speculation that the company might be taken private again.

"Management has a big chunk of the company and the question is what will they do," said one company observer.

"Being a publicly-quoted company gave them the credibility to roll out the franchise model but there is a limited market for the stock given its size."

However, Mr FitzGerald says that going private is not on the board's agenda at the moment. "We maintain that we have a very significant brand," he says, noting the company currently has 5,000 boards on houses across the State. "The stock exchange is the right place for a business with that spread."

Name:

Mark FitzGerald

Age:

45

Job:

Chief executive, Sherry FitzGerald

Why he is in the news:

The estate agent announced a 63 per cent rise in first-half profits this week along with plans to launch a new mortgage broking service, Sherry FitzGerald Finance

Background:

Joined auctioneering firm FitzGerald & Co in 1975 as an apprentice, becoming a director in 1982. He went on to head up the firm after the merger to form Sherry FitzGerald, floating it on the Developing Companies Market in April 1999

Family:

The son of former Taoiseach Mr Garret FitzGerald, he is married to Derval and has five children ranging in age from four to 16