The ASX-listed affordable housing provider has bought 129 villas in the villages it has agreed to buy from the Adelaide-based Not For Profit, which is left with 10 villages. 

Aspen Group’s plan is to turn what it terms good quality retirement village villas, predominately in Adelaide’s inner metropolitan area, typically with two bedrooms and a carport, into rental residential properties. 

“Implied pricing per dwelling ranges from $395,000 for unencumbered villas with residential leases to $65,000 for villas with retirement village licenses with a 25% deferred management fee,” Aspen's Joint CEOs John Carter and David Dixon said.

“Aspen intends to convert retirement village licenses into residential leases when retirement village tenants vacate their villas as the properties are sub-scale for retirement village use. This will increase capital employed in the residential component of the portfolio over time (from paying exit entitlements)."

The initial yield is expected to be 6% and settlement is scheduled for August. The acquisition is being funded through debt.