TORONTO, Dec. 12, 2014 /CNW/ - Brookfield Real Estate
Services Inc. (the "Company") (TSX – BRE) announced today that it
has approved the acquisition from Brookfield Real Estate Services
Manager Limited ("the Manager") of franchise agreements
representing 40 real estate operations and 858
REALTORS®1 operating under the Royal LePage brand
across Canada and the Via Capitale
brand in the province of Quebec.
The acquisitions will be effective January
1, 2015.
"This year has been one of exceptional growth for our firm,"
said Phil Soper, President and Chief
Executive of Brookfield Real Estate Services Inc. "The business had
considerable momentum coming into 2014, as brokers and agents
across Canada continue to
affiliate with Royal LePage before any other national real estate
brand. In Quebec, where our
francophone brand, Via Capitale complements Royal LePage, we have
added capacity to a number of brokerages with these acquisitions.
In the increasingly important luxury brokerage segment, we expanded
the geographic footprint of our Johnston & Daniel brand with a
competitive win-back from an international luxury real estate
firm."
Mr. Soper concluded, "We enter the new year with a strong
pipeline and the prospect of adding significant new depth and
quality to the Brookfield Real Estate Services family of companies
in 2015."
Acquisition of Franchise Agreements
Royal LePage Agreements
Under the Royal LePage brand, the Company will acquire franchise
agreements representing 35 real estate operations and 811
REALTORS® for approximately $9.5 million. These agreements are estimated to
generate an annual royalty stream of $1.4
million.
Via Capitale Agreements
Under the Via Capitale brand, the Company will acquire franchise
agreements representing five real estate brokerage offices and 47
REALTORS® for approximately $0.7 million. These agreements are estimated to
generate an annual royalty stream of $0.1
million.
Funding through Internal Cash and $10
Million Acquisition Line
As outlined in the Company's Management Services Agreement ("MSA"),
80 per cent of the acquisition price will be paid in January 2015. The purchase price will be
finalized and the balance paid at the end of 2015, in accordance
with the MSA between the Company and the Manager.
The combined payment due January 1,
2015 of approximately $11.5
million, which includes applicable taxes, will be funded
through a combination of cash on hand and a draw down on the
Company's $10 million acquisition
line.
About Brookfield Real Estate Services Inc.
The Company is a leading provider of services to residential real
estate brokers and their REALTORS®. The Company
generates cash flow from franchise royalties and service fees
derived from a national network of real estate brokers and agents
in Canada operating under the
Royal LePage, Via Capitale Real Estate Network and Johnston &
Daniel brand names. At September 30,
2014, the Company network consisted of 15,593
REALTORS®. The Company network has approximately one
fifth share of the Canadian residential resale real estate market
based on 2013 transactional dollar volume. The Company generates
both fixed and variable fee components. Variable fees are primarily
driven by the total transactional dollar volume from the sales
commissions of REALTORS®, while fixed fees are based on
the number of agents and sales representatives in the network.
Approximately 71 per cent of the Company's revenue is based on fees
that are fixed in nature; this provides revenue stability and helps
insulate the Company's cash flows from market fluctuations. The
Company is listed on the TSX and trades under the symbol "BRE".
For further information about the Company, please visit
www.brookfieldresinc.com.
Forward-Looking Statements
This news release contains forward-looking information and other
"forward-looking statements". The words such as "should", "will",
"continue", "plan", "believe", "expect", "anticipate", "intend",
"estimate", "approximate", "expected" and other expressions that
are predictions of or indicate future events and trends and that do
not relate to historical matters identify forward-looking
statements. Reliance should not be placed on forward-looking
statements because they involve known and unknown risks,
uncertainties and other factors that may cause the actual results,
performance or achievements of the Corporation to differ materially
from anticipated future results, performance or achievement
expressed or implied by such forward-looking statements. Factors
that could cause actual results to differ materially from those set
forward in the forward looking statements include a change in
general economic conditions, interest rates, consumer confidence,
the level of residential real estate resale transactions, the
average rate of commissions charged, competition from other
traditional real estate brokers or from discount and/or
Internet-based real estate alternatives, the availability of
acquisition opportunities and/or the closing of existing real
estate brokerage offices, other developments in the residential
real estate brokerage industry or the Corporation that reduce the
number of and/or royalty revenue from the Company's network of
15,593 REALTORS®, our ability to maintain brand equity
through the use of trademarks, the availability of equity and debt
financing, a change in tax provisions, and other risks detailed in
the Company's annual information form, which is filed with
securities commissions and posted on SEDAR at www.sedar.com. The
Corporation undertakes no obligation to publicly update or revise
any forward-looking statements, whether as a result of new
information, future events or otherwise, except as required by
law.
1REALTOR® is a trademark identifying
real estate licensees in Canada
who are members of the Canadian Real Estate
Association.
SOURCE Brookfield Real Estate Services Inc.