Qualitas has entered into an agreement to buy three retirement living villages, located in Victoria, from Stockland for $59 million.
The portfolio is composed of Burnside Retirement Village, Taylors Hill Retirement Village and Keilor Retirement Village, all located in close proximity to one another in Melbourne’s north-west, is made up of 649 dwellings, housing over 900 residents.
Qualitas has appointed Centennial Living to operate the villages, a group founded by Derek McMillan, formerly CEO of Australian Unity’s retirement and aged care business .
The transaction will be Qualitas’ first investment in the retirement living sector, said Mark Fischer, Managing Director, Principal Investments.
“Qualitas considers the investment to be a counter-cyclical opportunity suitable for sophisticated private capital with the investment thesis benefiting from the well-understood, long-term demographic trends of an ageing population.” said Mark Fischer.
“Qualitas was attracted to the strong occupancy rates and the long-term value-add potential of the villages, being within well-established residential communities in the north western growth corridors of Victoria.The retirement living sector is undergoing structural changes underpinned by favourable demographics and industry drivers. We see significant opportunities for these assets to deliver strong, risk-adjusted returns to investors going forward.” he added.
Andrew Whitson, Group Executive and CEO, Stockland Communities, said: “The sale of these assets aligns with our active capital recycling strategy from non-core villages, as we focus on reshaping our portfolio, and look at opportunities to reinvest 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,” said Mr Whitson.
The settlement of these three villages is expected to be completed by 29 May 2019, and they will then be operated by Centennial Living on behalf of QSH.