This article is from the Australian Property Journal archive
STOCKLAND has bolstered its land lease portfolio with the $210 million acquisition of five projects in Queensland from Living Gems Group.
The deal includes four future communities for development at Beerwah, Burpengary East, Logan Village and Eagleby Heights, all with development approvals, and one existing community at Glenvale, in Toowoomba, of around 200 home sites with further development opportunity.
Construction has commenced at three of the communities, and Stockland expects that all five communities will be in development within 12 months, driving settlement volumes and delivering incremental funds from operations from FY25. Stockland had previously expected to launch seven new communities by the end of FY24.
On completion, the portfolio will add about 1,280 home sites to Stockland’s land lease communities business, taking it to more than 10,500 home sites, consisting of 2,352 established homesites and 8,178 in pipeline.
“This strategic acquisition adds significant scale to our existing land lease development platform in south east Queensland, which is the deepest land lease development market in the country,” said Stockland Communities group executive and CEO Andrew Whitson.
“The acquisition of these five communities aligns with our strategic land lease growth plans, builds on our competitive strengths in masterplanned communities to generate quality recurring income, and leverages Stockland Halcyon’s proven track record of delivery in SEQ.”
Stockland has been steadily redeploying capital from its retirement living business towards the higher-returning land lease communities business.
Investors wanting to position for a recovery in residential volumes and earnings are best to put their money in land lease – also known as manufactured housing estates – as well as apartments and build-to-rent, rather than house-and-land, according to UBS.
Stockland will fund the new acquisition from existing financing facilities.
The transaction is anticipated to complete in early August.
Living Gems CEO Adrian Puljich said the strategic decision to divest the Living Gems Toowoomba community and greenfield sites to Stockland would allow both companies to continue flourishing in the growing over-50s sector.
“We are confident Living Gems Toowoomba is in safe hands with Stockland, whose experience, strong cultural fit and proven track-record integrating and expanding Stockland Halcyon will ensure a seamless transition.”
He said the company will retain eight Living Gems communities, while continuing to bring new communities to the market, including across the four greenfield sites that remain under its ownership.
