When the former Australian Unity Independent & Assisted Living CEO launched Centennial just over 18 months ago with former Australian Unity CFO Tony Connon, he said they would target an initial portfolio of 10 villages offering a new assisted living model of care – now the operator appears well on the way to achieving this target, picking up four Victorian retirement villages from Stockland.
Australia’s third largest village developer revealed late last week that it had exchanged contracts with boutique Australian fund manager Prime Value Asset Management Limited to sell Cameron Close Retirement Village in Melbourne’s east, Bundoora Retirement Village and Latrobe Retirement Village in Melbourne’s north-east, and Long Island Retirement Village in Seaford for a combined total of $89 million – a discount of 10% on their June 2020 book value.
The villages – three of which are more than 30 years old and have an average age of 28 years – will now be operated by Centennial Living following the completion of the purchase by Prime Value, a Melbourne-based fund manager with around $1.5 billion in investor funds across a range of equities, incomes securities, properties and alternative assets.
As we reported here, Centennial launched in May 2019 backed by Qualitas, a leading real estate financier and investment manager established in 2008 with around $2 billion of committed capital.
Their first acquisitions were also Stockland villages – Burnside Retirement Village, Taylors Hill Retirement Village and Keilor Retirement Village in Melbourne’s north-west with a total 649 units – which were purchased for $59 million.
The acquisition comes as Stockland looks to further its investment in land lease communities, with 3,000 homes now in their development pipeline.
Andrew Whitson, Group Executive and CEO, Stockland Communities, said: “The sale of these assets aligns with our active capital recycling strategy, as we focus on reshaping our portfolio and look at opportunities to reinvest in our land lease communities and across our broader business.”
“As part of our focus on improving returns, we will continue to assess the future sale of non-core villages where there is limited scope to deliver our customer value proposition to drive demand.”
Stockland says the sale will not impact the terms of agreements with existing residents and they will work closely with Centennial to provide a smooth transition.
Completion of the sale is now planned for the coming weeks, with Stockland to continue to operate the villages until settlement has occurred.
Pictured (left to right): Centennial Living Managing Director Derek McMillan, and Centennial Living Finance Director Tony Connon.