The Australian newspaper has come out promoting rumours its journalists have heard that Stockland is considering selling its retirement village business.
The proposition is that since the GFC (2088) there have been few if any buyers or investors in big village businesses but this year the appetite has changed. The Australian says:
But sentiment has changed for various superannuation funds and large investors, which may be running out of lucrative investment options for exposure to the countrys ageing population at a time when interest rates are low and cash yields in the sector are improving.
In summary, there is little room to buy into aged care at a good price, so villages are the next best ageing/property sector.
The Stockland Retirement profit growth of 20% to $49M over the past 12 months plus a stronger Return On Assets on track to 7% in the next 24 months, backed by the biggest development pipeline in the retirement sector, are reasoned to make the time right.
Trhe business would likely be sold into a new independent business rather than to another operator.
Other commentators say it makes sense because the cash from the sale that could be channelled into better yielding assets wold help the Stockland share price; it has steadily dropped 19% in the past five months from $4.65 to $3.78 about what the Net Asset Value is of each share.
Talk of a recession could also hurt Stocklands retail and commercial business looking forward 24 months.
The group made an operating profit of $608M so retirement at $49M accounts for just 8% of the business.
Stockland has declined to comment.
