Stockland is paying $620 million for Queensland over-50s communities owner and developer Halcyon.
The deal includes 3800 sites across 13 land lease villages: six which are established, four are under construction and the rest are in planning.
Ingenia Communities and Macquarie are understood to have contested for the portfolio.
Stockland, which prior to the Halcyon deal held two land lease communities and 59 aged care investments, will fund the purchase from existing liquidity.
Payment will be made in two equal tranches – the first upon completion of the transaction on 16 August with the balance in June, 2022.
Stockland will pick up 2500 customers and 100 staff from the Halcyon deal.
“This acquisition is in line with our stated strategy to grow our land lease communities and will increase the size of our portfolio to 7800 sites,” chief executive officer, Tarun Gupta, said.
“Land lease communities deliver attractive returns as the demand for high quality, affordable housing solutions grow,” he added.
“This demand is driven by Australia’s ageing population and baby boomers reaching retirement age,” according to the executive.
“Halcyon enables us to acquire a respected brand in the market with a loyal customer base and a knowledgeable team which will help us achieve scale in the fastest growing lifestyle segment – the over-50s market (story continues below).
“We see the land lease communities business as complementary to our master-planned communities land bank and believe there are synergies we can leverage to grow the business at scale nationally and achieve our ambition of becoming a leading operator in this space”.
Stockland reported an $85m operating profit from its retirement living business in 2020.
Following today’s agreement, Mr Gupta said the company would – to increase growth and build further scale and portfolio diversity – consider introducing third party capital into the division.
Group executive and chief executive officer of Stockland Communities, Andrew Whitson, added the acquisition brings forward the group’s land lease growth plans, enhances its ability to leverage competitive strengths and generates quality recurring income.
Halcyon group managing director said Stockland’s diversified property experience, balance sheet, landbank and cultural fit makes it a “perfect” choice to lead the next growth phase.
“We’re really delighted that Stockland recognises the strengths in Halcyon’s brand and capability and we welcome its commitment to our people and customers”.
The deal comes seven months since Stockland sold four aged care villages to Prime Asset Management for a total of $89m.
In February, Lendlease – which Mr Gupta headed at the time – divested a quarter of its retirement living division to Aware Super for $460m – book value.
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