Shane Nicholson reveals the real village and care sales landscape

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Director – Healthcare and Retirement Living at Colliers, Shane Nicholson, overviewed the seller’s market for villages and care. Retirement is ‘back’ with enquiries from investment funds that Colliers has not seen since 2008. They have sold 6 villages so far this year for $16M and have another $70M in villages under contract. In the second half of 2014 he expects to list (and sell) another $150M. Referring to one campaign late last year they had 37 enquiries, 15 parties that entered Confidentiality Agreements, 11 that accessed the Data Room, all resulting in 7 offers.
A current campaign has 30 parties listed as interested, with 3 being institutions that have returned to the market plus 3 Not For Profits – who Shane says usually pay well for a strategic buy. The rest are opportunistic, cashed up private buyers looking for a bargain, plus local residential developers.
Shane also confirms that there are two Asian investors actively in the village market.
Villages without care will have more buyers but a village with space for a new care facility will have fewer buyers but will generate a far greater price. A de-risked village with 3,000sqm of land that can take a new care facility will achieve the best village price because ‘that is what people want’.
Care facility sales are ‘booming’. He states the challenge is ‘keeping up with demand – which is massive’. He specifies metro located care, including multi bed wards, are the demand item. They have $100M under contract at present and are confident of $300M in sales in the second half of the year, with ongoing consolidation driving sales growth ‘for many years to come’