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Royal LePage to hit the U.S. market

The real estate firm Royal LePage Franchise Services Fund is poised to jump into the troubled U.S. housing market, after reporting second-quarter profit more than doubled. The fund - which reported profit of $3.6-million or 36 cents per unit compared with a year-earlier profit of $1.5-million or 15 cents per unit - is currently shopping around for a major regional real estate company in the U.S.

CEO Philip Soper said it's an ideal time to make a buy at a reasonable price. "Certainly it's a much better time to make an acquisition at the bottom of the market," Mr. Soper said, adding he's in talks with companies in various regions.

"It's just taking some time to find the right target," Mr. Soper said, noting it's not just a matter of price. He said Royal LePage is also looking for a corporate leadership team that will share the Canadian company's vision.

Mr. Soper said the growth in royalty revenue exceeded the fund's expectations, and he attributed the surprising strength in housing unit sales in the Toronto area -- after a flat period in 2006 in particular -- to a smooth transition from a manufacturing-based economy to one that is service-based. "It was well above predictions and yet price increases remain," Mr. Soper said. "It really does indicate this market has some legs in a healthy way."

See article in the Globe and Mail »

August 9, 2007 in World View [of real estate] | Permalink

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