ASX-listed land lease operator Lifestyle Communities has finalised the first of four land sales as part of a $114 million divestment program to cut debt.
The Ocean Grove site, on Victoria’s Bellarine Peninsula, was sold for $46.2 million – below its 30 June book value of $54.8 million. Settlement is due next month.
Three further parcels are also under contract:
- Drysdale, a township also in the Bellarine Peninsula, valued at $41.9 million, according to its latest annual report;
- Merrifield, a master planned community in Mickleham, 29km north of Melbourne's CBD, valued at $38.4 million;
- Warragul, a rural city 102km southeast of Melbourne's CBD, valued at $19 million.
Lifestyle Communities said the sales will reduce net debt from $463 million in June to between $345-355 million by December, after peaking at $490 million in May 2025.
The move follows what the operator described as a “challenging FY25 backdrop,” with an operating loss of $195.3 million compared to a $50 million profit a year earlier. The result reflects a $54.5 million provision to repay deferred management fees (DMFs) collected from past residents and a $135.5 million write-down in property values after a Victorian Civil and Administrative Tribunal (VCAT) ruling.
Justice Ted Woodward found Lifestyle’s DMF clause void due to inadequate disclosure of exit fees, though the model itself is not prohibited under the Residential Tenancies Act 1997. Lifestyle has amended its contracts and lodged an appeal with the Supreme Court of Victoria’s Court of Appeal.
Underlying operating profit after tax was $45.2 million (FY24: $52.9 million), while revenue fell almost 11% to $163 million. The company also plans to launch a no exit fee contract option in Q2 FY26, giving buyers the choice of paying more upfront to avoid deferred fees.
