TORONTO, Jan. 3, 2019 /CNW/ - Brookfield Real Estate
Services Inc. (the "Company") (TSX : BRE) announced today that it
has approved the assignment of certain franchise agreements and
ancillary revenue streams from Brookfield Real Estate Services
Manager Limited ("the Manager"). The Company is also pleased to
announce that it has commenced doing business as Bridegmarq Real
Estate Services, effective immediately.
Assignment of Franchise Agreements and Ancillary Revenue
Streams
As announced on November 7,
2018, the Manager has completed the assignment of certain
franchise agreements, as well as a number of contracts associated
with ancillary revenue streams, to the Company at the cost of
$1. The franchise agreements
transferred represent annualized royalty fee revenues of
approximately $0.9 million from 489
REALTORS®1 across Canada operating under the Royal LePage and
Via Capitale brands. Under the terms of the recently amended
Management Services Agreement ("MSA"), the Company, through its
operating subsidiaries, will directly enter into new franchise
agreements with franchisees as of January 1,
2019, allowing the Company to earn revenue from these
agreements from their inception.
The contracts associated with ancillary revenue streams will be
for the benefit of the Company effective January 1, 2019. These ancillary revenues include
mortgage referral fee revenues, commercial franchise fees and lead
management support services. In 2017, the Manager earned
approximately $3.3 million from these
ancillary revenues, net of direct costs.
"We are excited about the growth opportunities provided under
the amended management services agreement," said Phil Soper, president and chief executive
officer, Bridgemarq Real Estate Services. "This new revenue stream
is a material gain for the Company today, and it opens the door to
important new business opportunities in market segments adjacent to
core brokerage operations. Further, the elimination of the
once-a-year, external vend-in process in favour of immediate and
direct acquisition of franchise agreements by the Company greatly
simplifies our business model, which we believe will be welcomed by
potential and existing
shareholders."
Rebrand to Bridgemarq Real Estate Services
Effective
today, the Company has commenced operating as Bridgemarq Real
Estate Services (bridgemarq.com). The rebranding of the Company is
designed to clarify the Company's unique position in the market to
investors. There are no operational or organizational changes to
the Company. The stock symbol (TSX:BRE) will remain the same. The
Manager has also rebranded as Bridgemarq Real Estate Services
Manager Limited and remains a wholly owned subsidiary of Brookfield
Business Partners L.P. ("Brookfield Business Partners"). Brookfield
Business Partners continues to indirectly own securities
representing approximately 28% of the voting rights of the
Company.
"We are pleased to introduce our new brand in recognition of the
unique position and role we hold in the market," said Spencer Enright, Chair of the Board of the
Company. "Within the residential real estate services sector, no
other organization combines the strength of leading brands such as
Royal LePage, Johnston & Daniel and Via Capitale with
attractive investment metrics such as long term, stable cash flows,
consistent shareholder distributions and a compelling history of
leadership for over 100 years in Canada."
About Bridgemarq Real Estate Services
Bridgemarq Real
Estate Services is a leading provider of services to residential
real estate brokers and a network of over 18,000
REALTORS®1. We operate in Canada under the Royal LePage, Via Capitale
and Johnston & Daniel brands. Bridgemarq Real Estate Services
is the registered trade name of Brookfield Real Estate Services
Inc. For more information, go to bridgemarq.com.
Bridgemarq Real Estate Services is an affiliate of Brookfield
Business Partners, a business services and industrials company
focused on owning and operating high-quality businesses that
benefit from barriers to entry and/or low production costs.
Brookfield Business Partners is listed on the New York and Toronto stock exchanges. Further information
is available at bbu.brookfield.com.
1REALTORS® is a trademark identifying real
estate licensees in Canada who are
members of the Canadian Real Estate Association.
SOURCE Brookfield Real Estate Services Inc.