National director, transaction services for colliers, Phil Smith, reviewed village and care transactions across 2014.
Aged care is hot with 5,180 beds changing hands in major transactions in just over 12 months involving seven buyers and nine sellers.
Prices ranged from $210,000 to more than $300,000 per bed (Gross, before deduction of bonds) for newer/modern facilities made up predominantly of single ensuite rooms capable of maintaining private payments.
Older facilities/multi bed wards that were not capable of brownfield development were priced from $100,000-$150,000 per bed.
Phil predicted that family businesses will continue to be swallowed up by large operators who are also fighting for development sites in metropolitan areas. Two more aged care floats are possible in 2015.
Retirement villages there are far fewer transactions and most of them covered by confidentiality agreements. He sees the large operators (lend lease, Aveo, Stockland, RetireAustralia) being both buyers and sellers as they rejig their portfolios, especially geographically.
Lack of real excitement in the sector means that discount rates had not returned to pre-GFC levels of 12.5%. In metro areas 13%-15% is the guide whilst in regional sales greater than 15% is the rule.
Not-for-profits continue to be active, the very selectively because they are being driven by their member base rather than market share/economies of scale.
Colliers currently has more than 20 retirement villages, manufactured home estates and aged care facilities under confidential sand sales mandates.