Not for profit sells 19 aged care assets
Adelaide based not for profit ACH Group, or Aged Care & Housing, has sold 19 assets to Aspen Group.
Worth $19 million, the deal includes 129 dwellings across 3.2 hectares, all in Adelaide.
One property forms the top three floors of the city’s Spence on Light building.
The bulk of the other addresses are in inner metropolitan locations with a median house price over $1m, the buyer said.
Built mostly in the 1990s with an average two bedrooms and carports, they are subject to standard Residential leases, with below market rents, or Retirement Village licenses, governed by the Retirement Villages Act, it added.
Six per cent initial yield pre-value-add
The average resident age is over 80.
The average tenure is less than 10 years.
“Implied pricing per dwelling ranges from c$395,000 for unencumbered villas with Residential leases to c$65,000 for villas with RV licenses with a 25 per cent deferred management fee,” a spokesperson said in an ASX statement.
“Aspen intends to convert RV licenses into standard Residential leases when RV tenant vacate their villas as the properties are sub-scale for Retirement Village use,” it added.
“This will increase capital employed in the Residential component of the portfolio over time (from paving out exit entitlements) and free up the properties for general residential purposes as Aspen’s target rent points,” according to the buyer.
“The initial yield on the portfolio is expected to be around six per cent comprising a mixture of Residential rental income and RV DMF accrual/cash rolls.
“The acquisition is expected to be funded with debt”.
Settlement is scheduled next month.
The deal comes three months since we reported Aspen acquired a Ravenswood block, east of Mandurah, in Western Australia, permit-ready for a 360-lot residential subdivision.
Also in that state, in April, it acquired the former Paris Grove workers camp at Australind, for $32.5m, with plans to add some 250 dwellings to the existing 130 self contained units.
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