This article is from the Australian Property Journal archive
AFFORDABLE nursing homes operator Hall & Prior Aged Care have snapped up Blue Haven Bonaira for $95 million from the Kiama Council, who are set to take builder Richard Crookes Construction to court after defects impacted the sale price.
Located in south of Sydney, the coastal town facility at 14a Bonaira Street in Kiama comprises 59 independent living units and a 134-bed residential care facility, with the 2019-completed Blue Haven Bonaira spanning eight purpose-built care houses with two dedicated dementia homes.
In addition to the administration offices for Blue Haven Home Care Services, Matterson Hall, the Barroul House café, a chapel, a gym and a hair salon.
“This sale is a positive outcome for our community and our Council,” said Neil Reilly, mayor of Kiama.
“The sale ensures that Blue Haven Bonaira continues to provide excellent care under the management of Hall & Prior Aged Care, while allowing us to focus on financial sustainability and service delivery.”
The $95 million sale price will be adjusted for liabilities at settlement to include independent living units (ILU) entry contributions, employee entitlement and refundable accommodation deposits.
This is on top of reported building defects at the property including drainage and cladding issues impacting value.
Following these adjustments the council is estimated to see $26 million in proceeds.
Kiama Council has resolved to take the builder of Blue Haven Bonaira, Richard Crookes Construction, to court as a result of profits lost.
With Jane Stroud, CEO at Kiama Council and Blue Haven, adding “the material impact of the defects on the asset’s value cannot be ignored”.
“These are not new concerns and Kiama Council has been upfront about these matters and the history of the myriad issues associated with the Blue Haven Bonaira build and the ongoing operational losses for three years,” said Stroud.
The aged care centre was initially planned as a $40 million facility announced in 2013, before eventually inflating to $107 million by the time of construction.
With Kiama Council lending $60 million from TCorp to see the project through and over $20 million in internal reserves and cash used cover constructions costs.
Sale terms include a $1.2 million deposit, while the remainder will be settled in two payments.
“The first payment is due at settlement and the remainder will be paid two years after settlement. Importantly, this outcome ensures that Kiama Council can repay the final $15 million of its TCorp loan.”
Graeme Prior, CEO at Hall & Prior, has stated that no jobs or employees would lose out with the sale, with expectations of hiring as many as 100 additional staff over the coming two years.
“I am looking forward to supporting the staff of Blue Haven to transition safely and seamlessly to their new employer, who is an expert in the field of aged care, and to supporting the organisation post the divestment to refocus on core Council business and meet the NSW Government-imposed Performance Improvement Order,” added Stroud.
Retirement living has been back in the spotlight over the last week as shares in land lease communities operator Lifestyle Communities’ tumbled to a near four-year low, following an ABC report that detailed allegations of “immoral” and “unethical” conduct, including charging dead people rent and exorbitant charges for residents wanting to sell their home.
Settlement for Blue Haven Bonaira is due to occur on 1 November 2024.
