Belvoir Lettings PLC (LON:BLV), the UK’s largest property franchise, has told investors it exceeded its target for portfolio acquisitions by its franchisees last year.
During 2017 franchisees completed 23 acquisitions, increasing annualised network revenues by over £3.3mln, 10% ahead of the £3mln target set by the board.
58,000 managed properties
The acquisitions have added an ongoing £350,000 per annum of recurring management service fees (MSF) which is the main revenue stream for the group.
They also added 2,264 managed properties to the group’s portfolio, which now stands at more than 58,000, a year-on-year increase of 4%.
Of the 23 acquisitions completed last year, 14 were from the Northwood network, one from Newton Fallowell and the remaining eight from Belvoir.
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As part of the Assisted Acquisitions programme, Belvoir loans the franchisees some of the cash required to make the purchases.
It contributed £351,000 in 2017 to support the acquisitions. That’s around 10% of the total consideration, and while the group is happy to loan up to 30% of the deal value, most franchisees use their own cash reserves or source loans from other providers.
More deals on the way, says CEO
“The Assisted Acquisitions programme has proved to be very popular within the recently acquired Newton Fallowell and Northwood networks,” said chief executive Dorian Gonsalves.
“In addition to exceeding our target completions for 2017, we ended the year with a very robust pipeline of deals currently with lawyers which we would expect to complete in the first quarter of 2018.
“The appetite for securing portfolio acquisitions reflects the entrepreneurial spirit of our franchisees who are adapting to changes within the sector and seeing opportunity for growth as the sector consolidates.”