Q&A with Josh Mangleson, Property Economist, ResortBrokers

Q & A with Josh Mangleson,

Property Economist, ResortBrokers

By Mandy Clarke, Editor

In July, ResortBrokers released the Management Rights’ Report 2022. It is an important “one of its kind in Australia” report which examined the vast impact of the sector. The inaugural report utilised ResortBroker’s bespoke, back-ofhouse research system to collect and collate the data from around Australia.

The main findings by ResortBrokers Research revealed:

• $4.8b is the estimated total value of the management rights industry; • 3,679 is the number of schemes nationally; • 250,652 is the number of lots under the management rights model; • There are 68 average lots per scheme; • 33,000 is the number of people employed and; • there are $120b assets under management. For an in-depth conversation about the report, Resort News put some questions to the research expert Josh Mangleson, Property Economist, ResortBrokers.

Why does ResortBrokers focus on data collection?

I am reminded of a phrase that has been thrown around quite a bit over the past few years, but it’s one worth repeating; “Data is the new oil.” And you can’t have data without data collection!

This process is invaluable to our brokers, our clients, and the broader accommodation industry because it results in an understanding that can’t be otherwise obtained. It helps at the macro level by capturing the scale and state of entire markets and asset classes, and also at the micro level by offering comparative context and clarity for regions, submarkets and even individual businesses.

Josh Mangleson, Property Economist, ResortBrokers

Why was ResortBrokers Research launched and how does it benefit the industry?

In the years prior to ResortBrokers Research being established, the company’s directors realised data would become an important tool for the future and so they invested heavily in the data collection process. By the time I joined the team there was already a great pool of intel. The benefit to the industry is now being realised from ResortBrokers’ position as market leaders with access to rich historical data. This has enabled us to publish industry reports which have either never been done before or never executed as comprehensively.

Josh, you brought your research skills to the team but please tell us more about yourself.

I’ve always been drawn to real estate, which is what eventually led me to complete a Bachelor of Property Economics after some years working in a home improvement store and then as a project manager for a boutique builder. Four years with the Colliers-owned PRD Real Estate corporate team gave me exposure to data at a large scale across the country, which afforded me the opportunity to refine my data analysis skillset while undertaking a postgraduate qualification in Data Science. I’m also known online as the guy who bought a house with Lego - a strange but true story!

Do tell us more?

Well, all I can say is if you Google my name and Lego, you’ll get a whole lot of results from a few years ago.

Google says you were a savvy property owner by the age of 25, with the help of your childhood toys?

Yes… Long story short, while studying full time at university I decided to invest all my savings into Lego as an alternative asset class. I was already a self-confessed Lego nerd and had plenty of knowledge in the area, and was studying property economics, so it made perfect sense to me. Over a couple of years, I sold it all down and used the returns (alongside an available state grant) to buy my first home (a townhouse). I did interviews with The Project NZ and Today Tonight/7 News among others, there is no doubt still some videos floating around. An impressive achievement! And now you’ve brought your skills to benefit the management rights industry.

When it comes to the ResortBrokers Management Rights Report 2022, who do you think should read it and benefit from it?

This is a fantastic report for basically anyone with any degree of interest or involvement with the management rights industry. This could be in a professional capacity as valuers, accountants, brokers, solicitors, operators, government or professional bodies. And it’s also for those who possess a limited understanding of the industry and simply wish to learn more about it in terms of its scale and value, its metrics, subtypes and geographic submarkets.

What does the report tell us about current MLR multipliers for short stay?

The report captures the performance of the management rights industry through our internal sales data from across the past five years. The start of COVID-19 sat right in the middle of this period. It’s quite clear lockdowns initially weighed heavily on short-stay businesses; however we’ve also observed a strong recovery with most businesses now backed by a solid 12 months of trading. Despite this, short-term multipliers have averaged 4.1x, with a range of 2.1x to 6.5x achieved, these being dependent on the location, quality and scale of the business.

And for permanent management rights businesses?

Permanent schemes naturally fared better in terms of retaining their value during COVID-19 because they were less impacted by lockdowns. Their average multiplier was 4.6x, though achieved multipliers ranged anywhere from 1.9x to 6.6x.

And off-the-plan?

For the same period, off-theplan businesses witnessed an average multiplier of 4.1x (compared to 4.5x for established businesses).

On average these naturally sit lower, given developers are using income projections to estimate the future value of the business.

Tell us about buyers, what have been the key trends over the past few years?

We’ve observed increasing demand from a range of different buyer profiles. Wellknown corporate brands, highnet-worth private operators, syndicates and private equity all compete for the biggest and best management rights. And international investors (particularly Chinese) have also been attracted to the sector.

How will we see this change going forward?

We anticipate ongoing activity from corporates, institutions and the Chinese market will continue to drive industry trends. We are starting to see very strong demand for permanent businesses with large net profits, and as we speak, we have just struck a deal for a recordbreaking multiplier. Expect to hear more stories like this in the coming months.

How is the current MLR market and what does the future hold?

There are so many things going on in our economy right now. We are seeing fluctuating interest rates, record low unemployment unusually paired with costof-living challenges, and record low rental vacancy rates, just to name a few. Overall, we expect the strong demand for rentals and their rising prices will benefit permanent management rights businesses with significant letting components. And with 12 months of good trading now behind many shortstay businesses, we expect to see evidence of values continuing to move in a positive direction for operators.

Which locations have had the most transactions?

The markets with the most schemes have naturally recorded the most transactions. Brisbane, which has more than 1,500 schemes, accounted for 36 percent of our sales. The Gold and Sunshine Coast markets combined make up a similar size in terms of total schemes to Brisbane and constituted 39 percent of our sales for the period.

The report predicts continued growth for the industry, how accurate is this and what are the biggest threats?

outlook. Despite our nation’s economic challenges, when have there ever been no issues?

There are always potential threats to any industry, this is no different for management rights but there is so much more to be excited about.

ResortBrokers continues to work with government and peak bodies such as ARAMA to ensure the industry remains viable and represents the best interests of all stakeholders.

For those looking to invest in the sector what is your advice?

I truly believe that expert advice can only come from experts, and this report demonstrates that ResortBrokers really understand management rights. I’d encourage anyone considering investing in management rights, whether for the first time or as a seasoned operator, to speak to one of our brokers who will help you find the best business for your needs.