Phil McMahon Real Estate winds up sales division

The sales arm of one of Adelaide’s best-known coastal real estate agencies has been wound up weeks after its assets were sold to an unnamed party.

Phil McMahon Real Estate managing director Phil McMahon.

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The sales arm of one of Adelaide’s best-known coastal real estate agencies has been wound up weeks after its assets were sold to an unnamed party.

Phil McMahon Real Estate managing director Phil McMahon says a downturn in the property market and the effects of the banking royal commission forced him to appoint liquidator Anthony Phillips from Heard Phillips on Monday.

Mr Phillips and Mr McMahon would not disclose who the company’s major creditors were, how much they were owed, or how many employees had been made redundant.

However, one former employee has told The Advertiser that eight sales agents were shown the door in January, when the sales arm was sold off to an unnamed party.

Since that sale, the agency has continued to market properties under the Phil McMahon brand and from the same Anzac Highway premises, while continuing to operate its property management business — which is unaffected by the liquidation.

Mr McMahon said the sales division was sold in January to “protect our loyal and existing customers and to ensure continuity and minimal disruption in the sale of their properties”.

“The company experienced a significant decline late last year for various reasons including but not limited to the downturn in the property market and the effects of the banking royal commission,” he said in a statement.

“There was also a significant project that the company took on that did not deliver what was promised.

“Notwithstanding this, we made several attempts to revive the company, including making a number of employees redundant and cutting back costs, but unfortunately this had little effect on the ultimate and sustainable financial position of the company.”

While the Phil McMahon property management business remains unaffected by the liquidation of the sales business, The Advertiser understands a number of rent rolls have been sold off in recent months.

The former employee, who declined to be named, said most of the sales team was advised in January that they would be made redundant, left chasing “significant” unpaid entitlements.

“There was a bit of a downturn in the market last year, but the market is always cyclical and the property management arm was performing well, so it should have been able to support the sales division,” the former employee said.

“It’s disappointing for staff that we’ve been left with significant unpaid entitlements, which we’ll now have to pursue through the Federal Government’s scheme.”

Mr Phillips said he was assessing past transactions of the company, including the January sale and the current financial position of the company, and would report to creditors and ASIC shortly.

Mr McMahon established Phil McMahon Real Estate in 1990.