This article is from the Australian Property Journal archive
CROMWELL Property Group has sold its half-stake in LDK Healthcare for a 67% premium to the book value of its equity interest, as it sheds non-core assets on its path to becoming a capital-light real estate investor and fund manager.
Cromwell currently provides funding to LDK through a combination of its equity contribution to LDK and $148 million in secured interest-bearing loans, due to be repaid by June 2028.
The sale is structured in two parts. Cromwell will initially receive a payment of $20 million for its 50% equity interest in LDK, and the secured interest-bearing loans will remain in place until the end of February 2023, with an option for LDK to extend repayment until the end of June 2023.
On repayment of Cromwell’s loans to LDK, the transaction releases total capital of $168 million.
Cromwell took out its 50% ownership interest in LDK Healthcare in 2018.
On the buy side Anglican Community Services, trading as Anglicare Sydney.
Proceeds from the sale and repayment of loans will be used initially to reduce Cromwell’s gearing.
“The sale is consistent with commitments to simplify Cromwell’s structure by selling non-core assets and positioning the company as a capital-light global real estate fund manager,” it said.
During the LDK joint venture, Cromwell repositioned a vacant, campus-style office complex in Canberra’s Tuggeranong, comprising five freestanding buildings, into a seniors’ living village with over 380 purpose-built apartments known as Greenway Views. The acquisition by LDK of The Landings seniors’ living villages at Turramurra in Sydney followed shortly after in early 2019.
“Now is the right time for Anglicare – a natural joint venture partner for Aspire Aged Care – to enter into the LDK joint venture ahead of future developments,” Cromwell’s chief investment officer, Rob Percy.
“Anglicare is committed to LDK continuing to provide the highest level of service and care to the residents of Greenway Views and The Landings and Anglicare’s interests align well with Aspire as a joint venture partner in this next stage of LDK’s growth.”
The Greenway Views project attracted $60 million in finance from the Clean Energy Finance Corporation to improve the sustainability outcomes at the seniors’ living village – its first investment in a seniors’ living project.
