Frequently Asked Questions
What are the implications for the Fund of the federal government's decision to introduce a distribution tax on income trusts, effective in 2011?
We are closely monitoring the situation with the objective of continuing to build the Fund's business to create long-term sustainable value for our unitholders, independent of the tax regime. When we restructured into an income fund in 2003, it was because the Fund is well suited to the trust structure for a number of reasons, including its stable cash distributions and the limited capital requirements of a service-based franchising business. We believe the impact of the planned distribution tax will be significantly mitigated by the Fund's conservative payout ratio and its ability to continue to grow internally and through acquisitions.
What is the Brookfield Real Estate Services Fund?
The Brookfield Real Estate Services Fund ("the Fund") is a trust that indirectly holds the rights to the franchise agreements for residential real estate brokerage franchises. Unitholders receive a portion of the fees generated by the Fund's franchise network assets on a tax-effective basis.
How is the Fund governed?
The Fund is governed by five trustees, four of whom are independent of Brookfield Asset Management Inc. The Audit Committee and the Governance Committee are comprised of the four independent trustees. The Trustees meet several times each year to evaluate management initiatives, discuss growth strategy, and monitor business performance. The independent Trustees also monitor the performance of the Fund Manager, Brookfield Real Estate Services Limited, a subsidiary of Brookfield Asset Management Inc., on behalf of the Fund and ensure compliance with the terms of the Management Services Agreements. The Trustees have adopted formal terms of reference regarding their responsibilities and all matters of governance. They have agreed to formal distribution and disclosure policies, which are reviewed on an ongoing basis.
How is the Fund managed?
The Fund is managed by Brookfield Real Estate Services Limited, which is owned by Brookfield Asset Management Inc.
How can I purchase Units in the Fund?
Fund Units are publicly traded on The Toronto Stock Exchange under the symbol BRE.UN. Please contact your stockbroker or financial advisor for more information about acquiring Fund Units.
Does Royal LePage operate owned corporate branches?
Royal LePage owns and operates Royal LePage Real Estate Services Ltd., with locations in the Greater Toronto Area. The Fund holds the rights to the franchise agreements for these corporate locations. Royal LePage corporate branches account for less than 10% of the total Fund agent count.
How does the Fund differ from a Real Estate Income Trust (REIT)?
REITs generally receive their income from the rental streams generated from owning commercial or industrial property. The Fund earns its income through fee streams that are supported by long-term franchise contracts with members of the Fund's real estate brokerage network.
Are the Fund's units eligible for RRSPs?
Yes. The Fund is a mutual fund trust. Units are eligible under the usual Canadian statutes for RRSPs, RRIFs, RESPs and DPSPs. Investors are advised to consult their investment advisor to determine advisability for their investment portfolio.
What types of investors are most interested in the Fund?
Income trusts and income funds have been popular investments among individual investors seeking consistent, predictable cash distributions. Institutional investors also include income funds in their portfolios.
Are my returns guaranteed?
The Fund distributes royalties and other fees received from franchises after deducting management fees, interest and costs associated with being a publicly traded trust. The fees earned by the Fund are, in part, dependent on the strength of Canadian real estate markets. In evaluating income fund investments, we encourage potential investors to look beyond simple unit yields to focus on the underlying business. The strength of management, product and services lines, and the businesses brands are important considerations. This diligence may help generate better results.
Are the Fund Units a safe investment?
Income trusts are popular among investors seeking consistent, predictable cash distributions. You should consult your financial advisor to determine if the Fund Units are suitable for you based on your investment criteria.
Why did the Fund change its name to Brookfield Real Estate Services Fund?
The Fund changed its name in 2007 in line with its growth strategy to acquire real estate franchise systems in markets where significant opportunity for long-term, regional growth is identified. The name change from Royal LePage Franchise Services Fund did not affect current operations. However, having a Fund name that is distinct from the brands of the real estate companies it owns clearly distinguishes the difference between ownership and franchise management roles. This distinction provides the Fund with greater flexibility and more business opportunities as it implements the acquisition element of its growth strategy.
Brookfield Real Estate Services Fund was selected as the Fund’s new name because of its close association with Brookfield Asset Management Inc., which has a strong reputation in the global real estate industry, especially in Canada and the U.S. Brookfield Asset Management Inc. has a 26 per cent subordinated interest in the Fund, and owns the Fund’s manager, Brookfield Real Estate Services Limited. In line with the Fund’s name change, the website address changed to www.brookfieldres.com, and the TSX symbol to BRE.UN .