The Management Rights market overall remains slow with a number of Management Rights business for sale and purchasers being selective on their purchase.
The Brisbane CBD and Inner City corporate and short term letting market is strong with high occupancies and high tariffs. Most of these businesses are tightly held and in many cases, would command a premium if offered for sale. This has had the same flow on affect for the permanent letting market.
The Brisbane inner region remains fairly active with strong interest for businesses with large Net Operating Profits, as they enabling the business to employ staff.The Brisbane outer region remain fairly active as an entry point for many ‘Mum and Dad’ purchasers buying themselves a job.
The Gold Coast market remains tough with low occupancies, high levels of competition and a number of Management Rights businesses under the control of Receivers & Managers currently for sale, until these businesses are subsequently sold, it will take some time for the market to recover to the record multipliers achieved in 2007. Permanent let complexes are in higher demand than Holiday Let complexes on the Gold Coast at this time. We do not perceive much change to this situation in the future.
The achievable market value of the Management Rights business is heavily dependent on the location, the size of the Net Operating Profit, the length of Agreements, the ratio of the Managers Real Estate to the Management Rights business, the return on investment on the total purchase, the business offering plenty of upside, etc.
We recommend our valuation services be engaged to provide an independent opinion for the Managers Real Estate and or Management Rights business.