NATIONAL: Stockland buys three villages in QLD and ACT – 376 ILU’s – for $22M

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Paying an average of $58,500 per ILU, Stockland has purchased three mature villages from the Macquarie Bank/FKP (Aveo) joint venture Retirement Villages Group, for $22 million. The villages are Greenleaves in Upper Mount Gravatt (Brisbane) with 103 ILU’s, The Pines Lake at Elanora (Gold Coast) with 147 ILU’s and Ridgecrest in Canberra with 126 ILU’s. The average age of the villages is 26 years. Stockland points out they will deliver ‘immediate cash return in excess of marginal cost of debt’.
Being older villages with a maturing resident population the villages will have about a 9 year rollover generating around a 27% DMF. If the average ILU is valued at $300,000 Stockland will receive an average return of about $9,000 per ILU, or 15%pa return on $58,500 (conservatively). Makes sense.