This article is from the Australian Property Journal archive
MASONIC Homes has sold a portfolio of retirement villages in South Australia to Stockland for $75.8 million.
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Stockland CEO Mark Steinert said the portfolio provides strong development opportunities, both in terms of greenfield and brownfield projects, and is accretive to earnings.
He added that the acquisition forms part of Stockland’s capital recycling program to exit non-core villages and reinvest the funds into higher returning assets and development opportunities.
“South Australia is an excellent retirement living market with the highest penetration of over 65s living in retirement villages in the country at around 8.5%. We look forward to welcoming the residents and staff of these eight villages into the Stockland business,” he continued.
The portfolio comprises 980 homes and a development pipeline of at least 130 additional dwellings. The eight villages have a combined occupancy rate of 90% and will improve Stockland`s economies of scale in SA, which previously comprised 261 homes and apartments across three villages.
The acquisition increases the group`s total retirement living business to more than 9,500 homes and apartments across 69 villages in five states, with a value in excess of $1.1 billion.
Stockland CEO retirement living Stephen Bull said the acquisition is expected to deliver above hurdle returns and will positively contribute to achieving Stockland’s retirement living ROA target of 7.0 – 7.5% by FY19. The acquired portfolio has an average forecast cash ROA above this range. There is no inclusion of goodwill in the acquisition price.
“Our growth strategy over the last two years has focused on development and actively managing our portfolio to drive returns. This transaction further supports our growth strategy with the addition of high quality villages that are accretive to earnings,” he said.
Seven of the villages are located within 20km of the Adelaide CBD and one property, Bay Village, is located in Victor Harbor.
Masonic Homes chair Mark Butcher said the decision to accept Stockland’s offer had been made after due consideration of a number of proposals and in light of the company`s proven track record.
Australian Property Journal
