This article is from the Australian Property Journal archive
ASPEN Group is set to acquire the Wodonga Garden Retirement Estate, in Victoria’s West Wodonga, for $6.01 million.
The group has entered conditional contracts to purchase the property from Wodonga Gardens Retirement Estate Pty Ltd, with the transaction bringing Aspen’s retirement assets up to seven properties across four states and the group’s land development pipeline up by 49% to 370 approved sites.
The site is located within the NSW-Victoria border region of Albury-Wodonga, with West Wodonga about a three and a half hour drive from the Melbourne CBD and Canberra.
Wodonga Gardens is the largest retirement village under development in the region, covering 8.8-hectares, with approval for 172 houses, 51 of which have already been completed and leased.
The purchases price reflects a value of around $35,000 per approved site, with the existing dwellings on the estate holding a re-releasing value of around $15.3 million.
A community building was completed on the site last year, as well as road and site infrastructure for approximately the next 20 houses to be developed.
With an average age of 75 for current residents, the houses are currently being leased under a loan/lease agreement, which includes exit fees of up to 36%.
Recent sales in in the estate have had an average price of around $300,000, or a total average exit fee of $108,000 per house.
Aspen plans to make the terms of the accommodation more competitive, while still generating positive investment returns, with the group looking at developing and selling the future dwellings under a land lease community model.
This change would leave residents eligible to receive Commonwealth Rent Assistance.
Aspen is also looking at reducing total exit fees to 25%, leaving houses more attractive to new residents and leaving outgoing residents with higher proceeds.
This would reduce overall exit fees payable on existing houses to $3.8 million, down from around $5 million under the current contract conditions.
Albury-Wodonga is home to around 100,000 people, is one of the major regional hubs and is the 20th largest Significant Urban Area in the country.
The region is also serviced by an express train to Melbourne and the Albury Airport which has a flight time of 55 and 75 minutes to Melbourne and Sydney respectively.
Aspen anticipates they will be able to develop and sell at minimum 10 houses each year, with holding deposits for eight new homes in the next stage currently in place.
The acquisition will be funded with debt initially, with capital to be redeployed from the group’s Perth residential portfolio.
Settlement on the deal is expected to be completed in August 2021.
