This article is from the Australian Property Journal archive
ING Real Estate Community Living Group has expanded its business in North America by entering into the Canadian seniors housing market.
Yesterday, the fund announced $220 million worth of acquisitions in Australia and North America, including a 50% interest in a portfolio of eight Class A Long Term Care facilities in Toronto, Canada (Regency Portfolio) for approximately $136 million; a portfolio of three retirement villages in Western Australia and one retirement village in Queensland (Settlers Portfolio) for $47 million; and a further $37 million investment in the fund’s US Joint Venture with Chartwell.
The Regency Portfolio has been acquired in conjunction with the fund’s existing joint venture partner, Chartwell Seniors Housing REIT, who will manage the portfolio on behalf of the joint venture. Chartwell is the largest manager of seniors housing facilities in Canada, with over 24,700 suites/beds under management.
The Regency portfolio comprises 1,384 beds and is currently 99.4% occupied with extensive waiting lists. In addition, four of the eight properties have surplus land which has the potential to accommodate the development of an additional 400 Independent Living or Assisted Living retirement home units. The properties are all modern, Class A facilities constructed during the last five years.
The Australia portfolio consists of 463 completed Independent Living units with an additional 244 units under development.
Following these transactions, ILF will have total assets of approximately $1.2 billion across 118 properties, comprising over 10,000 units/suites and a development pipeline of over 2,700 units/suites located in Australia, the US, Canada and New Zealand.
ING Real Estate Investment Management Australia’s chief executive Hugh Thomson said the transaction was an opportunity to enter into the Canadian market, and in particular the LTC sector in Canada which is characterised by attractive demand demographics and stable government backed income streams.
“We have been evaluating the Canadian seniors housing market over the last two years and believe it provides an excellent platform from which to continue to grow the fund’s earnings,” he added.
The transactions will be funded through debt and an equity offer involving an accelerated non-renounceable Entitlement Offer and Public Offer to raise $155 which has been fully underwritten by JPMorgan.
The transaction will increase the Fund’s 2008 forecast distributions by 2% and reduce its look through gearing to 55%. When combined with the earnings growth of the existing portfolio, the distribution for 2008 is forecast to increase to 11.45 cents per unit, a 7% increase on the prior year.
Australian Property Journal
