Seniors accommodation has worked out very well for Stockland after abandoning retirement villages, with a big development pipeline, big sales numbers and big development profit in its relatively new land lease business.
Its Q3 ASX results have revealed continued strong interest.
The chart below shows that each month, Stockland generates over 4,000 new home buyer enquiries per month and a conversation rate of 3%, or 130 buyers each month.
This would indicate very successful marketing but perhaps conversion is not that great. In a difficult market retirement village operators look for a one in 20 conversation. In today’s market village operators are achieving one in five for good quality stock, or 20%.
The Stockland profit margin of 20%+ is significantly higher than a retirement village development, that is typically 14-16%, but likely lower today with the high construction costs.
