When we look forward 10 years, the Stockland bid to buy Aevum has the potential to change the face of the private retirement village sector. David Pitman, the head of Stockland’s retirement business, is best known as a strategist. He understands that Aevum has mature assets in mainly suburban locations that cannot be replicated.
Being old villages they will be redeveloped over the next 5 to 10 years, you can bet money Stockland will attempt to build medium rise on these prime locations and use their experience with government and time to push through the planning approvals.
Stockland is offering $1.50 a share compared to the real net value of $2.06 meaning they are attempting a 27% discount – but the real value is significantly higher because of the opportunity to place medium rise on the land at sometime in the future.
If successful, Stockland will match Lend lease and FKP (Aveo) as one of three big property developers holding 35% of private village assets. This will give them a big voice with government.
Interestingly, Aevum CEO Steve Mann moved to Aevum from Stockland. It will also be interesting to see where the head office of an Aevum incorporated Stockland retirement will be located. Money is, it will relocate from Melbourne to Sydney because David Pittman has declined to move to Melbourne previously and Sydney is where Stockland HO is.