With Aveo selling 16 villages and RetireAustralia, with 29 villages, now also up for full sale (again), we hear a lot about these big players in seniors accommodation, but little about the little guys – and there are a lot of them.
In fact we have 576 of them listed on our marketing and education web portal, villages.com.au. We talk to them every day.
The big news is that for the first time since 2007, they are being approached almost monthly to enquire if they would like to sell.
Those with a long memory will recall between 2004 and 2007 the likes of Macquarie Bank, Stockland and other corporates were feverishly buying villages, with analysts crowing about the coming Baby Boomers. That ended in tears in late 2007 when the GFC made property a four letter word.
Those operators who could hold on to their villages did just that, through to 2012. Then slowly villages started to change hands, usually to local buyers, like the solicitor or real estate agent.
Four Corners hit in June 2017 and everything stopped again as occupancy plummeted.
Now, seven years later, with no more than 3,000 new village homes being built each year versus the demand increase of 5,500 per annum, and COVID-19 teaching ageing Australians that they need a safe harbour as accommodation, almost all villages are full.
Re-enter the agents knocking on doors, trying to roll up villages into bundles of say five locations. Noral Wild (pictured), CEO of commercial property agency Cushman & Wakefield, told our LEADERS SUMMIT audience, big investors want a pipeline of five new villages to buy every year to warrant their research and management time. That is likely to be a $50-75M annual investment.
Plus a capital reinvestment program to bring villages up to the 2020s in style.
But this sounds cheap compared to RetireAustralia which when for sale last year wanted $1B for 29 villages, or an average of $35M each. Maybe they want $1.25B now.
