Prime Value pays Stockland $89m for four Melbourne retirement villages

The Bundoora asset is the only one in the portfolio built after 1990.

Stockland has offloaded four retirement villages to Melbourne’s Prime Value Asset Management which has appointed Centennial Living to operate them.

The $89 million deal reflects a 10 per cent discount to the June, 2020, book prices.

Low rise villas at the Long Island Retirement Village in Seaford.

“The sale…aligns with our active capital recycling strategy as we focus on reshaping our portfolio and look at opportunities to reinvest in our land lease communities and across our broader business,” the vendor’s Communities group executive and chief executive officer, Andrew Whitson, said.

“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,” he added.

Previously it has been speculated the Sydney group would shed about 3000 aged care rooms; it still holds 18 investments of this type.

Today we reported Stockland is spending $60m on a funds-through basis for two unbuilt warehouses.

Prime Value’s new aged care investments

Prime Value manages a property portfolio worth $1.5 billion.

Its newest assets, all in Melbourne, are:

  • Bundoora Retirement Village at 100 Janefield Drive, Bundoora
  • Cameron Close, 155 Warrigal Road, Burwood (pictured, top)
  • LaTrobe Retirement Village, Village Drive, Reservoir
  • Long Island Retirement Village, 1 Overton Road, Seaford

Each except Bundoora was built prior to 1990.

Prime’s sister company, The Shakespeare Group, holds commercial properties too; in May it paid Flight Centre $62.15m for an office at Melbourne’s 436 St Kilda Road.

Centennial to be manager

Prime Value’s latest assets will be managed by Centennial Living – founded 20 months ago by ex-Australian Unity Independent and Assisted Living chief executive officer Derek McMillan with ex-AU chief financial officer Tony Connon (story continues below).

The operator runs another three, with a total of 649 rooms, acquired by Qualitas last year, again from Stockland, for $59m (all in Melbourne’s north west, at Burnside, Keilor and Taylors Hill).

Of its latest portfolio divestment, the vendor said “the sale will not impact the terms of agreements with existing residents and Stockland will work closely with the new owners and operator to provide a smooth transition for residents.”

Settlement is in less than a month, it added.

Stockland reweights with east coast industrial, residential

Stockland has this year been selling shopping centres and retirement villages and investing heavily into industrial and residential.

Last month it acquired a Leppington block, near the proposed Western Sydney Airport, with plans for a c$145m logistics investment containing 58,000 square metres in three buildings.

In July it purchased Johnson & Johnson’s landmark Macquarie Park headquarters to extend its M_Park business park (as part of this deal, it will develop the medical group a replacement office).

Stockland has offloaded industrial real estate too, including also last quarter, a distribution centre in Balcatta, to Charter Hall for $63.5m.

In major residential deals, it this week paid $193m for 700ha of a master-planned housing estate in Brisbane’s Ripley Valley.

Three months ago it outlaid $180m on a 130.7ha Clyde North, Melbourne, farm abutting its Edgebrook estate.

In March, the developer spent $415m for control of the $4b The Gables residential community, at Sydney’s north west Box Hill.

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Marc Pallisco

A former property analyst and journalist, Marc is the publisher of realestatesource.com.au.

Marc Pallisco