RetireAustralia is reportedly on the market for around $1 billion and from its joint owner Infratil’s annual report to 31 March it can be seen why such a price tag is viable.
The Brisbane-based business, which owns and operates 28 retirement villages across QLD, NSW and SA, made an underlying profit of $56.5 million to the year to March. This was an 87% increase on 12 months earlier, when the business made $30.2 million.
To compare the result, rental village operator Eureka Group posted a net profit of $4.03 million for the Half Year to 31 December; whereas land lease operator Ingenia Communities achieved an underlying profit of $28.1 million for the HY to 31 December.
RetireAustralia achieved a net profit after tax of $149.1 million, up from $55.6 million on the prior year.
The increase in demand for a retirement community drove established community resales to 489, an increase of 51.4% from the prior year. New sales equalled 76, taking the total for the year to 565 homes.
15 villages are now operating waitlists and overall village occupancy has increased to 95% compared to the Australian industry average of 90%.
“Absolute clarity of strategy, and a deep understanding of their residents has been one of the significant drivers of performance for RetireAustralia,” said Infratil in its annual report, praising the work of CEO Dr Brett Robinson (pictured).
Infratil which owns 50% of RetireAustralia, values its stake in the retirement village operator at $NZ408.9 million. They invested $215M on NYE 2014 – that is 7.5 years ago, a gain of $194M plus share of annual profits.
European fund EQT, which bought Stockland’s 68 Retirement Living villages in February for $987M and NZ’s Metlifecare for NZ$1.3B, has reportedly joined global private equity business Brookfield, which bought Aveo’s retirement business in 2019, in looking to buy RetireAustralia.