11 Mar 2019
Tim Crooks: National Off The Plan Specialist
HOW DID YOU GET INTO THE INDUSTRY?
My father, Ian Crooks, established ResortBrokers in 1985. In the late 90s, I saw an opportunity to explore my own passion for this industry and joined the sales team. I’ve since carved out a niche as our national off-the-plan management rights specialist, first securing market leadership in Queensland and, in recent years, successfully brokering deals in both the New South Wales and Victoria market spaces.
WHAT ARE SOME CAREER HIGHLIGHTS?
Relationships I’ve established with major developers of new accommodation stock, including Aria, Mirvac, Gurner, Metro, Galileo, Pellicano, Abacus and the Deague Group are very important to me. In terms of results, some of my high profile sales are obvious highlights, including the management rights and associated real estate of many landmarks.
Standout deals include the Art Series Hotel portfolio for $52 million, consisting of five hotels and two management rights, and FV by Gurner for $28 million, bought by Mantra as the first Peppers in Brisbane, with 918 apartments and 72 hotel rooms. In 2018, we also sold the new Melbourne CBD Avant tower (55 levels, 456 apartments) operation for Singapore-listed World Class Global to international group Minor Hotels as Victoria’s first AVANI hotel.
WHAT ARE THE BIGGEST ISSUES FACING MANAGEMENT RIGHTS IN AUSTRALIA?
Queensland has a very successful management rights sector worth more than $5 billion, so the advantages of onsite management are well known. But New South Wales and Victoria have been slow on the uptake.
The biggest issue is an out-dated but entrenched involvement of real estate agents who expect to get letting appointments for free that would otherwise be of value to the developer. The ultimate value of management rights is derived from the number of letting appointments an operator can secure.
So developers need to build relationships with investor unit buyers, to educate them on why onsite management delivers greater service and returns than any outside agent ever can. We need to prevent project marketing agents (many of whom are now setting up property management divisions or touting outside agents so they can collect referral fees) from chasing letting appointments.
If considered early, non-competition clauses can be included in agency agreements signed with project selling agents.
WHAT TRENDS DO YOU EXPECT WILL EMERGE WITHIN THE NEXT DECADE?
I see Melbourne and Sydney being major growth markets for management rights. And we certainly expect continued growth in apartment hotels. Two things will drive it – the advantages to developers who gain the immediate profit boost at settlement of their management rights sale, and the increasing popularity of the model with major operators, many of whom are now pursuing asset-light expansion strategies.
Hotel companies have really taken to management rights. Look at the success Mantra achieved, and then their takeover by Accor. Minor Hotels and their Oaks brand in Australia, have also taken the lead – all major signs of confidence in management rights.
Operators know it allows them to secure properties in prime locations and greatly expand room inventory for a relatively low buy-in cost, while still controlling key real estate vital to run the hotel. They also see it as secure and low-risk, with long tenure, a guaranteed salary component and no rental liability on their balance sheet.
WHAT CHANGES WOULD YOU LIKE TO SEE OVER THE NEXT TWO TO FIVE YEARS IN THE INDUSTRY?
I’d like to see states beyond Queensland embrace management rights more rapidly. Momentum is building and I think we’ll see a domino effect as understanding grows and opportunities for apartment hotels grow in New South Wales and Victoria.
And not just in apartment hotels, but also in permanent residential developments where unit investors demand the superior service and returns that flow when management rights are in place.
WHAT IS YOUR FAVOURITE HOTEL AND HOLIDAY DESTINATION?
That’s a tough call. I’ve been to lots of memorable places and great hotels around the world. But I really don’t think you can beat what we have right here, for weather, beaches, great dining and top hotels. So I’d have to say Sofitel Noosa Pacific Resort.
In a busy schedule, it also helps that such an idyllic escape is so close to home.