Property management company Tessa Group, alongside a private Brisbane-based investor, has put the management rights to a 644-apartment portfolio up for sale with price expectations of more than $14 million.

It comprises six high-end residential properties in inner-Brisbane suburbs Teneriffe and Toowong.

The properties—White Dawn, Augustus, Landmark, Rivers on the Park and Regatta Riverside at Toowong and Fabric at Teneriffe—generate a combined body corporate salary of $879,000 and a net profit of more than $1.7 million.

Around 50 per cent of units will be owned by investors, creating a letting pool of more than 300 units.

Resort Brokers Australia’s Tim Crooks and Alex Cook are marketing the management rights via an expressions of interest campaign.

“Significant portfolios such as this are in extremely high demand,” Resort Brokers Tim Crook’s told The Urban Developer.

“Throughout the pandemic, permanent management rights were one of the only businesses where the major banks continued to finance new transactions.

“The lack of new supply, coupled with consistently strong returns, drove multipliers upward throughout this uncertain time.

“We are looking to set a record multiplier of 7.2-times and, if realised, this would be setting a precedent in the way management rights transactions are perceived in future.”

Management rights, which allow an onsite manager to earn fees from letting apartments and managing day-to-day services, have long been a feature of the Queensland apartment market.

In 2017, Mantra Group paid a record $28 million to secure the management rights to Tim Gurner’s FV high-rise development in Brisbane’s Fortitude Valley.

That deal enabled the ASX-listed hotel and resort operator to manage almost 1000 apartments in the three-tower precinct as well as commercial space and leisure facilities. The FV deal was also negotiated by Resort Brokers Australia.

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Before that, the management rights for 287 apartments at Soul Surfers Paradise sold for more than $25 million and the off-the-plan sale of the rights to the $150 million The Beach Apartments Broadbeach sold to Minor Hotel Group for an undisclosed sum.

More recently, Little Projects and KM Develop, a subsidiary of insolvency firm KordaMentha, jointly sold the management rights of its under-construction development Signature Broadbeach, a 35-storey tower with 252 apartments on Philip Avenue.

That project's management rights incorporated the letting and caretaking rights plus associated real estate including reception, office and back-of-house facilities.

According to SQM Research, Brisbane’s rental vacancy rate has been dropping rapidly in the past 12 months, down to just 1.3 per cent in June, representing a 15-year low for the city.

“What operators are seeing on a daily basis confirms this. In some cases, there are waiting lists for rentals and permanent lettings don’t stay on the market for long,” Resort Brokers director Alex Cook said.

“When you combine this market confidence with the scale and quality of these assets, as well as the increasingly large pool of buyers from a variety of purchasing classes looking to add to their portfolio, it translates to a large volume of interest.”