PROPERTYRUN Property sells management, software...

PROPERTY
RUN Property sells management, software companies
PUBLISHED: 0 HOUR 31 MINUTES AGO | UPDATE: 0 HOUR 26 MINUTES AGO
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BEN HURLEY
Listed property management company RUN Property has sold its rental property management and software businesses in two separate deals to a value of around $65.4 million.

The company, which had real estate tycoon John McGrath among its founding partners, manages about $10 billion of residential property on Australia’s east coast. Shares in the $20 million company leapt from 6c to a high of 21c when trading opened this morning.

Rental Express Group Limited will buy RUN’s entire property management business, while Heritage Acquisitions Limited will buy RUN’s Agent Plus businesses, which provide outsourced administration and accounting software services to real estate agents.

Rental Express and Heritage Acquisitions are related property management companies.

The terms of the deal include $55.4 million in cash which will pay off RUN’s bank debt of $20.4 million, $10 million of stapled securities in the Rental Express Property Management Fund and 25 million ordinary shares in Heritage Acquisitions.

RUN chief executive Rob Farmer said the Rental Express Property Management Fund would fund acquisitions of real estate businesses, and expand into other states including Western Australia where it does not have a presence.

“Really it’s us having the operational effect of merging with these businesses,” said RUN chief executive Rob Farmer. “We’re not selling out, we’re really selling in.”

“Over the past seven years we have built critical mass in Melbourne and Sydney and some pretty sophisticated technological and operational capabilities. What we really need to take the business to the next level is access to capital and take it to different markets like Perth.”