Management RightsManagement Rights

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Demand has increased for Management Demand has increased for Management Rights, and this is very much a growing Rights, and this is very much a growing segment in the Tourism Market. Lifestyle segment in the Tourism Market. Lifestyle for operators is proving to be the for operators is proving to be the motivation for many, particularly those new motivation for many, particularly those new to the industry to the industry

Some larger complexes with price ranges Some larger complexes with price ranges over $2 Mil have been moving as this over $2 Mil have been moving as this allows some scaling of the business allows some scaling of the business opportunites. Permanent complex opportunites. Permanent complex opportunities offer increased security and opportunities offer increased security and these are very popularas well. these are very popularas well.

The Management Rights sector in The Management Rights sector in Queensland, like many others did  slow Queensland, like many others did  slow over the last 18 months with properties over the last 18 months with properties that are well positioned still being in that are well positioned still being in demand and the more marginal property demand and the more marginal property sales rates are slowing, but we are now sales rates are slowing, but we are now seeing an increase in the number of sales seeing an increase in the number of sales

  Corrections have taken place with some Corrections have taken place with some properties where alterations in the net and properties where alterations in the net and the property values have changed, but the property values have changed, but generally these are still fantastic generally these are still fantastic opportunities and will continue to get opportunities and will continue to get stronger. stronger.

Recent sales results indicate a wide Recent sales results indicate a wide variation in the sales price multiplier variation in the sales price multiplier achieved on different properties. achieved on different properties. Purchasers continue to look for value and Purchasers continue to look for value and potential when choosing their next potential when choosing their next business as they are after what is in it for business as they are after what is in it for them and how can they add value to the them and how can they add value to the opportunity. opportunity.

High earning properties are still sort after High earning properties are still sort after but the multiples generally have started to but the multiples generally have started to increase with a number of recent sales in increase with a number of recent sales in QLD, with some heading back to the 5 and QLD, with some heading back to the 5 and 6 times multiple. Certainly some of the 6 times multiple. Certainly some of the quality properties we have seen attract the quality properties we have seen attract the higher multiples have not been placed into higher multiples have not been placed into the market so Position, Position Position the market so Position, Position Position remains strong as well as the ability to remains strong as well as the ability to grow and add value to the business. grow and add value to the business.

Recently in Port Macquarie, we have seen Recently in Port Macquarie, we have seen multipliers in excess of 4 times due to the multipliers in excess of 4 times due to the position and perceived growth. In other position and perceived growth. In other areas we have seen 10 year and less areas we have seen 10 year and less agreements go through sub 3 times, but agreements go through sub 3 times, but each market segment has variations and each market segment has variations and generally this is a very well regarded generally this is a very well regarded industry that offers prime opportunities that industry that offers prime opportunities that allow a popular lifestyle. allow a popular lifestyle.

For mid size properties where all the variables For mid size properties where all the variables such as size of residence, time left to run on such as size of residence, time left to run on agreements, workload, location etc. are agreements, workload, location etc. are favorable, the multiplier is strong as people, are favorable, the multiplier is strong as people, are still after good properties as they can easily still after good properties as they can easily afford the price ranges after selling a residential afford the price ranges after selling a residential house or in some cases accepting redundancies house or in some cases accepting redundancies and the like.Often the motivation can be the and the like.Often the motivation can be the location and the ability to have tasks that will location and the ability to have tasks that will assist in an income and lifestyle. assist in an income and lifestyle.

Purchasers continue to look at the total Purchasers continue to look at the total cost of the business and the residencein cost of the business and the residencein the decision making process. the decision making process.

We would predict that whilst ever interest We would predict that whilst ever interest rates remain firm, demand will continue to rates remain firm, demand will continue to be strong for well positioned properties for be strong for well positioned properties for some time in the medium to long term some time in the medium to long term future future

Management Rights are in primarily new Management Rights are in primarily new coastal or CBD developments where coastal or CBD developments where Motels are not viable due to the structures Motels are not viable due to the structures being on prime development land and a being on prime development land and a higher and better use is available. Often higher and better use is available. Often these properties may have been removed these properties may have been removed to make way for units. to make way for units.

Management Rights are the way of the Management Rights are the way of the future and the industry will continue to future and the industry will continue to grow as it is a service that is needed and grow as it is a service that is needed and history has shown that an owner operator history has shown that an owner operator is more inclined to have a higher level of is more inclined to have a higher level of maintenance and upkeep (Not necessarily maintenance and upkeep (Not necessarily at a higher cost) as they have an at a higher cost) as they have an investment in the complex as well as investment in the complex as well as opposed to offsite or absentee operators opposed to offsite or absentee operators orreal estate agents. orreal estate agents.

We are aware of some complex's in QLD where We are aware of some complex's in QLD where agreements have been sold with the expectation agreements have been sold with the expectation of automatic top ups. These are not a of automatic top ups. These are not a requirement and are subject to the contract requirement and are subject to the contract being granted by the Body Corporate. being granted by the Body Corporate. Management rights in some instances can Management rights in some instances can achieve the 5 year topups, but these are not achieve the 5 year topups, but these are not guaranteed so the decisions need to be made guaranteed so the decisions need to be made upon the agreement terms and tenure. upon the agreement terms and tenure. Management rights are a contract and the term Management rights are a contract and the term is the term. is the term.

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