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Australia's biggest housing developer acquired its first retirement village owner as the nation's share of elderly people is forecast to more than double in the next four decades.
Stockland agreed to pay A$329 million ($374 million) for Australian Retirement Communities, which runs 17 senior citizens' villages in Victoria and Queensland states. The purchase will be funded through a A$300 million share sale.
It is the second takeover this week for the Sydney company's chief executive, Matthew Quinn, after buying British property manager and developer Halladale Group.
He is tapping new avenues of growth after a three-year housing slump in Australia.
The proportion of the population aged 65 and over will rise to about 28 per cent by 2051 from 13 per cent in 2004, according to Government data.
"It's a good fit for Stockland," said Winston Sammut, of Maxim Asset Management in Sydney.
"The retirement village sector offers development opportunities and opportunities to grow with the ageing population, so you can see the appeal."
Shares of Stockland were halted from trading yesterday pending more details on the share sale, which will be managed by UBS AG and Citigroup. They have gained 6.9 per cent this year.
Quinn agreed to buy Halladale for £170 million ($485 million). It is his first acquisition in Europe. The Glasgow company manages and develops almost £1 billion of office and retail buildings in Britain, and is starting a European property fund.
Australian Retirement Communities, founded in 1976 by John Russell, Graham Knowles and Ian Ball, is the nation's biggest privately held retirement village owner.
The company has three further villages under construction, and plans for six more.
"Buying this particular business does give Stockland a critical mass that they can build on and grow from here," Maxim's Sammut said.
Stockland will combine those assets and projects with its own retirement unit, which it set up last year.
- BLOOMBERG
