The ongoing strength of the Australian land lease community sector has been confirmed by the decision by ASX-listed property developer Stockland to acquire 13 existing and future Queensland communities operated by Halcyon.
The $620 million transaction includes the acquisition of 3,800 Halcyon sites across 13 land lease communities, made up of six established land lease communities, four communities in development and three projects in planning.
Halcyon was previously a privately-owned company which was known for its high-end, resort-style land lease communities, which are very popular among self-funded retirees.
Stockland will welcome over 2,500 new customers to its portfolio as part of the acquisition, as well as a team of over 100 people with in-depth sector experience which will strengthen Stockland’s existing land lease capabilities.
Stockland Managing Director and CEO, Tarun Gupta said: “This acquisition is in line with our stated strategy to grow our land lease communities and will increase the size of our portfolio to 7,800 sites.”
“Land lease communities deliver attractive returns as the demand for high quality, affordable housing solutions grows.
This demand is driven by Australia’s aging population and baby boomers reaching retirement age.
“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.
“We see the land lease communities business as complementary to our masterplanned 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 will fund 100 per cent of the acquisition price and associated costs from existing liquidity.
Before today’s decision, Stockland had already developed a pipeline of around 4,000 land lease sites. In June, it commenced construction on a $6 million clubhouse at its first land lease community, known as Thrive Nirimba, on the Queensland Sunshine Coast.
Today’s announcement will make Stockland one of the largest Australian land lease community operators, sitting alongside other major players such as Ingenia and Palm Lake in terms of overall size.
“As our land lease communities portfolio grows we will explore opportunities to introduce aligned third party capital into this business to increase growth and build further scale and diversity in the portfolio” Mr Gupta said.
Halcyon Group Managing Director, Dr Bevan Geissmann, said: “Stockland’s diversified property experience, balance sheet, landbank and cultural fit make it the perfect business to lead Halcyon on its next phase of growth.
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.”
Group Executive and CEO Stockland Communities, Andrew Whitson, said: “The potential for the land lease business to reshape lifestyle living for the baby boomer demographic is really exciting.
As a market, the over-50s are looking for well-designed, personalised housing; security; access to facilities and activities to maintain active lifestyles.
“This acquisition enables us to offer more customers access to this alternate over 50s lifestyle offering, brings forward our land lease growth plans and enhances our ability to leverage our competitive strengths in master-planned communities to generate quality recurring income.”
Stockland anticipates completing the transaction on 16 August 2021. A further update on the transaction will be provided when Stockland releases its 2020-21 results on 20 August 2021.
Last week, Ingenia announced its 2020-21 result is expected to exceed guidance, with new 380 home settlements, up 17 per cent in 2019-20.
Find out more:
- See listings for Halcyon communities here
- Stockland's Halcyon purchase announcement and presentation
- Construction underway on $6m clubhouse at Stockland’s first land lease community
- Eight key differences between buying in land lease communities and retirement villages
- Six ways to save money by moving into a land lease community
- Land lease communities: Six questions to ask to ensure you find the perfect home