TORONTO, June 28, 2013 /CNW/ - Brookfield Real Estate Services Inc. (the Company) (TSX: BRE), a leading provider of services to residential real estate brokers and their REALTORS®¹, today announced that it will be continuing its relationship with Brookfield Real Estate Services Manager Limited (the Manager), a subsidiary of Brookfield Asset Management Inc. ( Brookfield) under an amended and restated Management Services Agreement effective January 1, 2014 (MSA). The agreement provides new growth opportunities for the Company and enhances the value of Canada's premier real estate services brands, including Royal LePage, Johnston & Daniel and Via Capitale Real Estate Network.
"The changes to the agreement all provide significant benefit to shareholders," said Spencer Enright, President and Chief Executive Officer of Brookfield Real Estate Services Manager Limited. "With the new MSA in place, we will see a close alignment of the Manager and Company goals, reduced management fees, a new incentive arrangement emphasising organic agent growth, and the ability to grow market share while safeguarding the existing return on investment."
While the majority of the provisions under the MSA remain intact from the existing agreement, management fees have been streamlined to 20% across all branded franchise networks and the existing Royal LePage formula used to calculate the value of incremental franchises assigned by the Manager has now been adopted across all branded franchises. Additionally, the MSA provides for an incentive fee to the Manager based on organic growth within the franchise networks and provides the Manager the ability to sell other Canadian branded franchises to the Company in addition to Royal LePage and Via Capitale. The initial term of the MSA is five years, with a provision for automatic renewal of successive five year terms.