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The ASX-listed group has revealed a new alliance with MDC Trilogy Group, espousing the opportunities available for further scale and geographical growth.
An ASX announcement has revealed The Agency Group Australia has entered a services agreement with MDC Trilogy whereby it manages the property management assets purchased and owned by MDC Trilogy.
It follows the financial close on inaugural investments by MDC Trilogy, known as the MDC Trilogy Wholesale Yield Fund I. That fund has purchased businesses with over 650 property managements across Sydney and Queensland — with The Agency now managing these.
According to the ASX statement, this alliance “facilitates all sales agents and team members of businesses purchased by MDC Trilogy to join The Agency”, thereby providing “a significant mechanism for market share growth”.
Weighing in on the news, The Agency managing director Geoff Lucas shared that the company “is always looking for new and innovative ways to expand our market share and grow our agent presence”.
“That’s why we’re excited to be collaborating with MDC Trilogy under a services agreement; it opens new doors to more opportunity for agents to join our business, across more markets, in more ways. It also allows continued expansion into more geographical areas across Australia in a capital-efficient manner for The Agency shareholders,” he explained.
Acknowledging an agent’s ownership of existing rent roll assets as often an inhibitor of recruitment, Mr Lucas said that the latest alliance “provides an opportunity for the agent to sell their business, including rent roll assets, and join The Agency as a sales agent”.
“The business sale allows the agent to refocus on their selling strengths rather than administrative tasks that enables a focus on superior services and results to the customers,” he said.
The managing director believes that with the financial backing of MDC Trilogy, there is significant opportunity for The Agency to further enhance returns on its scalable operating model, highlighting that across the country, there are 3.25 million rental properties, which The Agency estimates “are worth near $3 trillion dollars”.
“This is broadly equivalent to the entire ASX listed stocks value, and compared to the ASX listed funds management industry, the management of the residential rental properties has seen limited innovation over recent decades. The fragmented ownership of real estate offices across Australia means that many rent roll assets are not at sufficient scale to operate efficiently, nor can their owners appropriately invest in technology that improves the tenant and landlord experience,” he stated.
He then outlined that it was the company’s operating model and national presence that MDC Trilogy considered as “advantageous” and “an attractive services provider for their funds management model”.
“Our partnership with MDC Trilogy is a long-term growth opportunity,” he remarked.
“These initial settlements are the first of many that we expect with MDC Trilogy, as it becomes a pillar of our broader strategy to grow our national market share through additional geographical markets.”
Mr Lucas concluded by noting that the new alliance does not preclude The Agency from purchasing rent roll assets directly.
ABOUT THE AUTHOR
Grace Ormsby
Grace is a journalist across Momentum property and investment brands. Grace joined Momentum Media in 2018, bringing with her a Bachelor of Laws and a Bachelor of Communication (Journalism) from the University of Newcastle. She’s passionate about delivering easy to digest information and content relevant to her key audiences and stakeholders.
