Stockland enters $90M agreement with fund manager to sell four retirement villages in Victoria to Derek McMillan’s Centennial Living

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Just a month after our third largest village developer announced it has 3,000 land lease homes in its development pipeline, Stockland has revealed it has exchanged contracts with boutique Australian fund manager Prime Value Asset Management Limited to sell the villages – at a 10% discount.

Cameron Close Retirement Village in Melbourne’s east, Bundoora Retirement Village and Latrobe Retirement Village in Melbourne’s north-east, and Long Island Retirement Village in Seaford are being sold for a combined total of $89 million – a discount of 10% on their June 2020 book value.

The villages – three of which are more than 30 years old and have an average age of 28 years – will be operated by Centennial Living following completion of the sale by Prime Value, a Melbourne based fund manager with around $1.5 billion in investor funds across a range of equities, incomes securities, properties and alternative assets.

As we reported here, former Australian Unity CEO Derek McMillan launched Centennial in May last year with the purchase of three Stockland villages in Melbourne, with a model based on offering assisted living at its villages.

Andrew Whitson, Group Executive and CEO, Stockland Communities, said: “The sale of these assets aligns with our active capital recycling strategy, as we focus on reshaping our portfolio and look at opportunities to reinvest in our land lease communities and across our broader business.”

“As part of our focus on improving returns, we will continue to assess the future sale of non-core villages where there is limited scope to deliver our customer value proposition to drive demand.”

Stockland says the sale will not impact the terms of agreements with existing residents and they will work closely with Centennial to provide a smooth transition.

Completion for the four villages is now targeted in the coming weeks, and Stockland will continue to operate the villages until settlement has occurred.