Picture this: You are a thriving real estate investor with assets across the country, and you’ve never had to put in the work of vetting or managing them. That’s the dream that property-based fund managers MDC (Murray Darling Capital) Trilogy wants to realise for its investors through its Wholesale Yield Fund I investment plan. To set it in motion, it has onboarded real estate company The Agency (ASX: AU1) to manage the multiple properties.
For a fee, MDC will give people access to a bunch of properties spanning multiple geographies across Australia that will be managed by The Agency. Investors won’t have to worry about tenants, management costs and the like. Additionally, and probably most importantly, they don’t have to rely on just one property to bring in the dough.
The Agency Managing Director, Geoff Lucas, stated, “The Agency 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.”
The MDC Trilogy Wholesale Yield Fund I has already completed its inaugural investments where it has purchased businesses with over 650 property management assets across Sydney and Queensland. These are now managed by The Agency. The thing about such assets, according to MDC, is that they are less volatile and capable of providing higher returns. Plus, it gives real estate agents the chance to tap into the burgeoning market, too.
Lucas expands, “An inhibitor to agent recruitment is often an agent owning existing rent roll assets (i.e. the properties owned by an agent). The alliance with MDC Trilogy 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.”
The Agency estimates that there are over 3 million rental properties across Australia worth nearly $3 trillion dollars. “This is broadly equivalent to the entire ASX listed stocks value,” Lucas asserts. And 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. That’s where the partnership between MDC and The Agency comes in handy.
MDC Founder, Michael Birch, stated “From our assessment, there is significant inherent value within Australian rent rolls. The industry is ripe for consolidation and we believe there is [a] significant opportunity for MDC Trilogy to liberate sales agents to return to solely focus on selling while giving the property management arms of these businesses the appropriate infrastructure and system support to organically grow. MDC Trilogy chose The Agency as its key service provider because of its national reach and direct engagement model with agents.”
The fund will require a minimum investment of $250,000 for a year and is targeting a net distribution rate of 10% per annum.
Trilogy cofounder, Phillip Ryan, concluded, “The fund is a way for our investors to gain economic exposure to the performance of a significant portfolio of property management assets held by the MDC Trilogy Group.”
Rents across Australia are soaring right now, and if you are already in the business of investing in real estate, you know the kind of returns it promises. With MDC Trilogy’s investment vehicle, investors get access to more properties without the stress of managing them.
Alinda is a Business Reporter for The Sentiment
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