Retirement Predator Stockland Picks Up BBCs Aevum Stake, Five Percent of FKP
On Sunday, CEO Matthew Quinn told ABCs Inside Business that Stockland was very keen to grow in the retirement industry. Just three days later, it had acquired 14.4 percent of Aevum from Babcock & Brown, as well as a five percent of FKP...
On Sunday, CEO Matthew Quinn told ABCs Inside Business that Stockland was very keen to grow in the retirement industry. Just three days later, it had acquired 14.4 percent of Aevum from Babcock & Brown, as well as a five percent of FKP Property Group, with the option of taking up to eight percent more.
Stockland acquired its first retirement village owner Australian Retirement Communities in February last year, and since then the market has been nothing but an upside, according to Mr. Quinn. The $26.9 million Aevum purchase places Stockland at the top of the share register of the Sydney-based company, which has a growing network of 21 villages with 2123 units in New South Wales where it is the biggest provider and Western Australia. It was, moreover, a very cunning move; the $1.50 paid per share a 31 percent discount to Aevums net tangible assets at June 30.
Yesterdays FKP purchase also came cheap at $2 per share, or $28 million. Surprising, considering FKP rejected a $1.3 billion Lend Lease bid that priced units at $ 5 in each in June. The deal is likely to deliver Stockland FKPs $1 billion retirement village portfolio, under an agreement giving Stockland first right to buy the assets. Speaking about the Stockland move, FKP chief executive Peter Brown said: This is the best deal for us. One area that we are looking at is of course our retirement business, and at the same time [Stockland] are interesting in expanding their retirement business. There is a natural and strategic fit for the two groups to see if we can work out a good opportunity together, and there might be other broader opportunities that come out of the relationship. He said proceeds from the Stockland transaction would ensure that we are in a very strong financial position into 2010, taking into account that we could see the market deteriorate further in terms of debt and equity markets.
FKP's retirement business consists of its investment in the Retirement Village Group (RVG) Fund jointly owned with the Macquarie group plus other assets. FKP and Macquarie purchased the Zig Inge portfolio for $641 million in November. Collectively, FKP's retirement assets include 45 villages on its balance sheet and 35 villages under management. It has 2608 units in its development pipeline, Mr. Brown said.
