Financial services company Spring FG is expected to pay $1.88 million for the exclusive rights to manage Devine Limited’s Mode Apartments, as part of its recent expansion into real estate asset management.
The deal will see the company provide building management services to Mode’s body corporate and operate an on-site letting agency and property asset management services for Mode owners for a 25-year term.
“Our clients already hold around 500 residential investment properties in inner Brisbane, within a readily serviceable radius of Mode, so the acquisition of the management rights there provides an ideal hub from which to provide asset management and letting services across that entire asset pool,” Spring FG managing director Keith Cullen said.
The 157 apartment development is under construction in Brisbane’s inner-city suburb of Newstead, with completion expected in mid-2016.
The company expects to pay up to $1.88 million for the rights, inclusive of $210,000 for a commercial lot within the development from which it will operate the services. The acquisition, Spring FG said, would be readily funded from its balance sheet.
This is the first deal for the recently launched Spring FG real estate asset management division that will provide property asset management, letting agency and resale services to the company’s existing and new clients (and other investor-owners), as well as building management services to bodies corporate.
“In addition to enabling the company to provide clients with an end-to-end property advice and management service, the provision of physical asset management and letting services will provide stable recurring income that we expect to be a material contributor to revenue and profits into the future,” Mr Cullen said.
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