26 Jul 2024
Words The Hotel Conversation

ResortBrokers settle landmark Gold Coast management rights deal with Sphere Southport Living

ResortBrokers Senior Broker Todd Warner and Broker Clint Amos have closed out Southport’s largest ever management rights transaction with the sale of Sphere Southport Living.

The 436-apartment permanent-letting complex on Southport’s Musgrave Avenue sold for a more than double that paid for the previous Southport management rights record holder, Nexus Towers, which settled in 2018. Nexus Towers, another majority permanent-letting complex, was also brokered by Todd Warner who has represented ResortBrokers on the Gold Coast since 2017 and was its top selling broker in FY24.

Sphere Southport Living’s FY23 net operating profit puts it in the upper category of management rights informally known as ‘super rights.’ The leasing component of the business currently comprises 165 apartments in the onsite letting pool. Real estate included a three-bedroom, two-bathroom manager’s unit, a large office and re-purposed gym area.

“We’re delighted we were able to transact the sale of this exceptional business,” says Todd Warner. “This was a multifaceted deal involving 15 body corporate schemes under one community title. We’re in a market with many moving parts, especially with interest rates shaking up the lending landscape. Management rights buyers are also more educated and sophisticated than ever before.”

“In this increasingly complex market, ResortBrokers always advocates the sellers’ best interests are served by engaging highly experienced management rights professionals to guide them on the importance of suitable price positioning, engaging the right professional advisors and preparing your property for sale.”

“Sellers who are serious about selling their business in a complex market need to price their businesses appropriately for the buyer market to respond accordingly. That’s what happened with Sphere, which is a very complex business with many body corporate schemes and some real scale to the operation. If sellers go to market with the wrong strategy and ill prepared, it wastes everyone’s time, not least their own, and runs the risk of a lost opportunity through poor planning and preparation.”

The transaction sees the management rights change hands from outgoing operator Sphere Partners Pty Ltd, headed by director Andrew Greenwood, to brother and sister Eric and May Zhu, who are first-time management rights buyers. The family-owned business will both own and operate the management and letting rights to Sphere.

“We are very happy with the sale,” says Andrew Greenwood, Sphere Southport Living’s outgoing operator. “Ours was a difficult business to sell with 15 bodies corporate, which scared off many buyers and made it very difficult to determine a fair market price. Todd was able to show the benefits of multiple smaller bodies corporate as well as upsell the many positives we had in order to offset the layered scheme concerns. While the transaction did take many months, Todd was fantastic in terms of keeping it on track and smoothing out any bumps along the way. He maintained an excellent relationship with both parties as well as third parties such as lawyers in order to keep it moving and ultimately achieve an excellent result.”

“Andrew and Sphere Partners are handing over an excellent business,” adds Clint Amos. “They’ve helped to cultivate a great community of owners and residents at Sphere who’ll continue to be looked after with the personal touch of a family-owned operator like Eric and May who are more than qualified to take it from here.”

“Eric and May are both highly experienced business owners and professionals in their own right. Eric has more than 10 years’ experience as a property agent. Importantly, they will have the benefit of continuity in that all of Sphere’s key staff are staying on to support them, which is a great show of confidence in their abilities.”