High-growth real estate group The Agency Group Australia (ASX:AU1) has teamed up with a private company chaired by Future Fund Board member and Crown Perth Chairman John Poynton in a move that will provide a significant platform to grow The Agency’s core business.
The strategic partnership will see Managex Funds Management buy The Agency’s West Coast rent roll business – which consists of 1,173 managements – for $3.6 million with proceeds to go towards reducing The Agency’s debt.
The sale of our WA rental roll business is a positive for us, improving our balance sheet and facilitating greater alignment to our core business,” The Agency Group’s Managing Director Paul Niardone said.
“The Agency continues to develop its unique busines model which attracts and incentivises the best real estate sales talent. This sale increases our focus on developing this model while simultaneously increasing our referral power and overall business flexibility.”
Under a licence agreement, Managex who is looking at further acquisitions, will use the Agency Group brand in WA with a focus on retaining property management staff. The Agency has agreed to accommodate Managex at its Perth office.
Managex will refer all sales leadsto The Agency, who will refer property management leads to Managex.
“The benefit to our sales agents is that they will have access to a larger pool of sales leads from the growing Managex owned rent roll and they will also be rewarded for referrals of property managements,” Mr Niardone said.
The Agency and Managex will look to aggressively grow the rent roll via the acquisitions of real estate businesses.
Managex Managing Director Kim Slatyer said Managex aimed to acquire, aggregate and manage Australian residential rent rolls.
“This partnership with The Agency is the first in a pipeline of acquisitions for Managex,” he said.
“We are well funded and have the operational expertise to aggressively expand in what we see as a growth market.” Our strategic alignment with The Agency ensures we have a strong referral partner committed to growing our respective businesses.”
The transaction is expected to be completed by the end of Q3 CY2020.