27 Sep 2021
Words Rae Wilson The Courier Mail & News Corp
Regional Queensland property portfolio on market for $20m
A management rights portfolio generating net profit of more than $3.6 million across 11 high-end regional properties is now up for grabs.
The portfolio comprises 815 units, with 597 managed in onsite letting pools, in prime suburbs on the Sunshine Coast, Mackay, Moranbah, and Townsville.
Considered one of the largest hybrid short term and permanent management rights assets ever offered to market, the portfolio is tipped to attract offers between $19 million and $20 million.
That’s according to ResortBrokers’ Sunshine Coast specialists Glenn Millar and Chenoa Daniel and industry analysts based on current market conditions.
“When you combine the prime locations, the quality of the buildings, the sheer scale of the complexes and their letting pools, the huge combined body corporate salaries and the significant scope for upside, this presents as a genuinely rare management rights opportunity,” Mr Millar said.
“We’re expecting the portfolio to attract the attention of property consortiums, fund managers and probably larger established operators given the scale of what’s on offer,” he said.
“There’s also the potential for a smaller existing operator to establish themselves as one of Queensland’s largest management rights operators.”
The properties in the portfolio include Broadwater, Saltwater, Salt Apartments, and Waterline on the Sunshine Coast; Monterey at Moranbah; Pacific Sands near Town Beach in Mackay; and The Dalgety, Central Holborn, Central Islington Apartments, Central Kensington and Riverway Point in Townsville.
Management rights typically include the ability for an on-site manager to earn fees from letting out apartments in a strata titled building as well as earning a salary for managing day-to-day duties such as cleaning. The value of a management rights business is generally calculated by applying a multiplier to its annual profit.
“The portfolio covers three separate regions and, combined, they provide access to three distinct markets,” Chenoa Daniel said.
“The Sunshine Coast has one of the hottest real estate markets in Australia right now and it’s attracting both domestic tourists and new locals looking to live and work on the coast.
“Mining and resources is driving demand in Central Queensland.
“In Townsville, there’s a major university, an army and air force base, and a busy port which is backed by major infrastructure investment including the development of the $290 million Queensland Country Bank Stadium which has transformed the city both socially and economically.”
All complexes in the portfolio are owned under a corporate structure and are run entirely under management.
“As such, there is significant scope for a more hands-on operator to grow various aspects of the business,” Ms Daniel said.
“The vast majority of the agreements have more than 20 years tenure remaining, providing solid security to the incoming operator.
“All but four of the complexes has no requirement to live onsite, and all but six of the complexes has no set office hours, affording the incoming operator great flexibility in how the businesses are managed.”
Mr Millar said demand for management rights businesses in prime locations had risen so sharply that “bundled” portfolios were set to become a regular feature in the industry, with fund managers now joining the hunt for assets along with consortiums, syndicates and larger established operators.
“Multipliers have risen on the Sunshine Coast, and they’re on the rise in places like Central Queensland and Townsville, so putting a portfolio together of similar assets provides a scale that provides a compelling offering with solid revenue,” Mr Millar said.
“Traditionally, we sell these management rights businesses as stand-alone entities but the demand is there for multiple properties to be sold together.
“This is because the larger established operators and fund managers are looking for scale and they’re looking for quality.”