TORONTO, Dec. 8, 2016 /CNW/ - Brookfield Real Estate
Services Inc. (the "Company") (TSX: BRE) announced today that it
has approved the acquisition of certain franchise agreements from
Brookfield Real Estate Services Manager Limited ("the
Manager").
Acquisition of Franchise Agreements
Under the Royal
LePage and Via Capitale brands, the Company will acquire franchise
agreements representing 43 real estate operations and 569
REALTORS®1 across Canada for approximately $8.2 million. These agreements are estimated to
generate an annual royalty stream of $1.2
million and will be effective January
1, 2017.
As outlined in the Company's Management Services Agreement
("MSA") with the Manager, 80 per cent of the acquisition price will
be paid in January 2017 and the
balance paid later in the year when the purchase price is
finalized, based on the actual performance of the acquired
agreements.
The payment due January 1, 2017 of
approximately $6.6 million, plus
applicable HST, will be funded through a combination of cash on
hand and a draw down on the Company's debt facilities.
"The Company experienced strong growth in 2016, as we increased
the reach and impact of our brands through a carefully considered
cross-Canada expansion plan," said
Phil Soper, president and chief
executive officer, Brookfield Real Estate Services Inc. "A series
of competitive wins saw brokerage firms from coast-to-coast choose
long-term affiliation with one of our industry-leading brands. This
positive momentum is possible because of ongoing investments the
Company makes to ensure its brokers and agents are the most
informed, supported and successful real estate professionals in the
nation."
Mr. Soper concluded, "We enter the new year with a strong
pipeline that should see us continue to add new depth to the
Brookfield Real Estate Services family of brokerage firms in key
markets across the country."
FORWARD LOOKING STATEMENTS
This news release contains
forward-looking information and other "forward-looking statements".
Words such as , "will", "estimated", "ongoing", "enter", "should",
"continue" and other expressions that are predictions of or could
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 Company 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 indicated in the forward looking
statements include: changes in the number of Realtors® who stay
with the Company during the period when the purchase price is
finalized (the "Determination Period"), the productivity of those
Realtors® during and after the Determination Period, changes in the
supply of houses for sale in Canada or in any particular region within
Canada, changes in the demand for
houses in Canada or any particular
region within Canada, changes in
government policy, laws or regulations which could reasonably
affect the housing markets in Canada, Consumer response to any changes in
the housing markets in Canada or
any changes in government policy, laws or regulations,
changes in general economic conditions (including interest rates,
consumer confidence and other general economic factors or
indicators), changes in global and regional economic growth, the
demand for and prices of natural resources on local and
international markets, the level of residential real estate
transactions, competition from other real estate brokers or from
discount and/or Internet-based real estate alternatives, the
closing of existing real estate brokerage offices, other
developments in the residential real estate brokerage industry or
the Company that reduce the number of REALTORS® in the
Company's Network or royalty revenue from the Company's Network
during and after the Determination Period, the Company's ability to
maintain brand equity through the use of trademarks, the methods
used by shareholders or analysts to evaluate the value of the
Company and its publicly traded securities, changes in tax laws or
regulations, 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 Company 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.
About Brookfield Real Estate Services Inc.
Brookfield
Real Estate Services Inc. is a leading provider of services to
residential real estate brokers and a network of over 17,000
REALTORS®. We operate in Canada
under the Royal LePage, Via Capitale and Johnston & Daniel
brands. Further information is available at
www.brookfieldresinc.com.
Brookfield Real Estate Services Inc. is an affiliate of
Brookfield Asset Management, a leading global alternative asset
manager with over $250 billion of
assets under management. For more information, go to
www.Brookfield.com.
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1 REALTORS® is a trademark identifying real
estate licensees in Canada who are
members of the Canadian Real Estate Association.
SOURCE Brookfield Real Estate Services Inc.