TORONTO, Dec. 6, 2013 /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 20 real estate offices
and 493 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, 2014.
Acquisition of Franchise Agreements
Royal LePage Agreements
Under the Royal LePage brand, the Company will acquire franchise
agreements representing 19 real estate brokerage offices and 484
REALTORS® for approximately $6.1 million. These agreements are estimated to
generate an annual royalty stream of $0.9 million
As outlined in the Company's Management Services Agreement ("MSA"), 80%
of the 2014 acquisition price will be paid in January 2014. The
purchase price will be finalized and the balance paid at the end of
2014, in accordance with the MSA between the Company and the Manager.
Via Capitale Agreements
Under the Via Capitale brand, the Company will acquire franchise
agreements representing one real estate brokerage office and nine
REALTORS® for approximately $0.2 million. These agreements are estimated to
generate an annual royalty stream of $0.03 million
As agreed with the independent directors, 80% of the 2014 acquisition
price is to be paid in January 2014. Under terms negotiated with the
Company's Directors, the balance of the purchase price will be
finalized over the next three years and is to be paid in annual
installments over the same period.
Funding Through Internal Cash
The combined payment due January 1, 2014 of approximately $5.6 million,
which includes applicable taxes, will be funded internally.
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, 2013, the
Company network consisted of 15,451 REALTORS®. The Company network has an approximate 24% share of the Canadian
residential resale real estate market based on 2012 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 73% 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
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 15,451 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.
1 REALTOR® is a trademark identifying real estate licensees in Canada who
are members of the Canadian Real Estate Association.
SOURCE: Brookfield Real Estate Services Inc.
For further information:
Director, Public Relations & National Communications
Brookfield Real Estate Services Inc.