ASX Ltd (ASX: ASX) has made an announcement this morning that could change the property landscape.
The ASX is partnering with Australian Technology Innovators (ATI), the parent of Infotrack, Australia's leading provider of eConveyancing technology and services, to enter the national electronic property settlement market. Sympli Australia Pty Ltd will be owned 50:50 between the two.
Sympli has applied to become an electronic lodgement network operator with the regulator.
ASX and Infotrack believe that there's a good opportunity by combining ASX's secure & electronic financial market settlement expertise and Infotrack's property settlement technology and processes expertise.
ASX said that Sympli will give lawyers, conveyancers and financial institutions a streamlined technology solution that will integrate with clients' existing systems. It should improve efficiencies and support the change to electronic conveyancing and settlement.
According to ASX, this industry has potential revenues of more than $200 million. As long as the regulatory approvals go through, Symplic expects to begin operations towards the end of 2018.
Sympli will take around $30 million of investment to set up, with $7 million in 2018. ASX has estimated that it will be break-even by FY21.
ASX Managing Director and CEO, Mr Dominic Stevens, said "Entering the elecontric property settlement market is a natural evolution for ASX. We already settle approximately $70 billion in transactions electronically every day and have been the central settlement venue for the Australian financial market for decades. InfoTrack is the ideal partner as the market leader in legal and property search. It has 18 years' experience and brings a deep understanding of, and connectivity to, the property conveyancing industry.
"Sympli is an exciting opportunity. Combining the experience and expertise of both shareholders will enable Sympli to provide a compelling offering, which we believe will allow users to easily realise the efficiencies of electronic property settlements."
Foolish takeaway
This seems like a solid move from ASX and should be an easy step to leverage its existing assets to make this a success. ASX isn't the type of investment I'd personally make because I'm unsure of how much further it can grow over the next five or ten years, but this property move is a good way to diversify its earnings.
