Stockland Retirement may have two serious buyers

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The Australian’s dataroom business background column reported yesterday that an Australian super fund and the Singapore media group are seriously looking at buying up to 100% of Stockland’s retirement business, which is on the market for a second time.

Discussion is that the book value is $1.5B but Stockland would likely be realistic and accept less in today’s retirement village market. (Aveo’s share price at $2.00 compared to a book value of $3.60 will not be helping Stockland).

Singapore Press Holdings, the media company which includes radio, print and outdoor signage, and an Australian super fund, possibly First State Super or Hesta look likely to make a bid for all or part of the retirement operation.

In an article in The Singapore Times in December last year, Singapore Press Holdings chief executive Ng Yat Chung signalled the possibility of developing retirement villages in Singapore saying,

While there were no retirement villages operating in the island state yet, it was a mature market.

It’s possible the Singapore sovereign wealth fund GIC, the Dutch pension fund APG or Blackstone may also be in the running.

Stockland would like to offload its entire retirement living operation, if it can find a buyer, but it’s thought they expect to sell about half of the operation, given most buyers would want Stockland to remain as the operator.

For the 2018 financial year, Stockland’s profit from its retirement division operations fell 16.7% to $53M.

Remember that Aveo is scheduled to announce next Monday (22nd) if it agrees to sell all or part of its business to the Canadian fund manager Brookfield.

In October 2017 Lendlease, which is 33% bigger than Stockland, sold 25% of its retirement  business to the Dutch pension fund APG for $450M.