As the heat dissipates slightly from the property market, a new type of listed vehicle is gearing up to take advantage.
Listed property management companies are starting to emerge with the aim of taking over the rent rolls from real estate agents and property investors.
Rent rolls, or management authorities, have been real estate agents’ bread and butter.
They even have a value. One management authority is said to be worth between $2,000 and $2,500.
In Western Australia at least two Australian Stock Exchange-listed companies are chasing this market – Key 2 and Wentworth Mutual.
In Queensland there are at least another two, the Australian Institute of Property Management and S8.
S8 is currently facing a $101 million takeover from Sydney-based Perpetual Trustees.
Key 2 recently announced a $1.8 million rights issue. That is partly to pay off its debt to Aliquot Asset Management – now masquerading as Revinir and touting a new offering called Bone Limited – for the rent rolls it bought and also to fund its expansion.
Key 2 has about 1,700 properties under management.
Ironically, AIPM had a strong link to Aliquot. Its chairman Paul Crowther once held just under 20 per cent of Aliquot’s stock and was involved in a bitter boardroom battle with Aliquot board members Peter Huston and Michael Perrott.
Mr Crowther said he had been attracted to Aliquot because he had seen the property management business in Queensland and that it had proved to be lucrative.
Wentworth Mutual announced to the market on July 22 that it had acquired a property asset management business in Mandurah. That business had about 400 residential properties under management, with an estimated asset value of $90 million.
It also acquired a property asset management business near its head office in Subiaco. That business had 100 residential properties with an estimated value of $30 million.
Key 2 executive chairman Ananda Kathrivelu said with the heat coming out of the property sector, more rent rolls were starting to come onto the market.
He said this would give the company an opportunity to become a national player.
With that national status, he believes that will bring the institutional players onto Key 2’s registry.
"We’ve had interest from the large institutional players," Mr Kathrivelu said.
"However, they want us to be a national player."
From Wentworth’s point of view, growth and national growth in particular is also on the agenda.
Wentworth CEO Brian McNamara said the company had a different organic growth approach to its competitors such as Key 2 and AIPM.
"We aim to grow our business through referrals," he said.
"To foster that we give people who give us referrals $750 worth of shares in our company," he said.
"It’s actually a good way to grow when you consider a management authority has a value of $2,500, we’re getting it for a much lower price."
Wentworth has about 1,100 properties under management.
Mr McNamara said the company aimed to have about 1,800 properties under management by Christmas before it too, looked to opportunities in the eastern States.
