This article is from the Australian Property Journal archive
FKP Property Group may separate its $2 billion retirement village portfolio from the main business, following a strategic review.
FKP initiated a review of its retirement portfolio in February and the findings has recommended the group demerge the retirement business from the development and trust businesses.
In was only a year ago that FKP took full control as the manager of the $1.2 billion Retirement Villages Group.
The retirement business contributed $9.8 million in HY12 down 57% from $22.9 million due to lower turnover and sales, which decreased 22% from $263 million to $205 million. However FKP controls one of the largest retirement villages portfolio in Australia with an underlying property value of $2 billion as at HY12.
The group has 5,018 units on its balance sheet with a further 298 in the pipeline totalling 5,316 units. In addition its Forest Place Group balance sheet has 1,661 units and RVG Australia has 4,040 units. FKP also manages the RVG New Zealand portfolio which has 3,383 units. In total, FKP is sitting on 14,440 units.
FKP said the demerger will allow the group to capitalise on other significant opportunities, including integrate health services with accommodation in its retirement portfolio.
“In addition, FKP expects to grow its existing retirement development pipeline to generate stronger cash flow from this business,” the group said in a statement.
FKP has engaged Goldman Sachs to look at the costs and benefits of the demerger and will provide further details at its full year results in August.
Property Review
