Retirement villages now “akin to a healthcare play”, says Stockland’s Andrew Whitson

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Retirement villages are no longer a straightforward “property play” for operators, says the Group Executive and CEO of Stockland’s Communities business, Andrew Whitson – and those with a strong continuum of care offering are most likely to benefit from future demand from an ageing population.

Stockland had been unsuccessfully seeking a capital partner for its Retirement Living business since 2015 prior to last month’s sale of the division for $987 million to global investment firm EQT Infrastructure.

“It’s obviously been part of our strategy for a number of years now to down weight our exposure to retirement living which was reinforced in our strategy review in November,” Andrew acknowledged.

“The demographic tailwinds for the sector is still very strong, but we see to be a leader in the retirement village sector, you need to have a very strong care offer.”

“That is more akin to a healthcare play, than a property play.”

While Andrew could not comment on whether other village operators will make the same move as Stockland away from ‘care’, he noted that some of the most successful village operators in the Australian market are those that offer a continuum of care.

“You look at some of the leading New Zealand operators that entered the market in Australia more recently, have been very successful with that strong integrated care offer,” he said.

“I still think that the sector that has some strong demographic tailwinds and with the right offer, we have seen a lot of operators be very successful. So, it more depends on the broad strategy of the organisation.”

Read more about Stockland’s sale to EQT and its new land lease partnership with Mitsubishi Estate Asia in this week’s Mergers and Acquisitions issue of SATURDAY, in your inbox at 6am, Saturday 19 March. SATURDAY is moving to subscription-only from 2 April – subscribe HERE for full access.