Development giant Lendlease confirms $468m sale to Aware Super

Resales across Lendlease’s $1.4 billion retirement living portfolio dropped 19 percent in the first half of 2020-2021, as it confirmed the sale of a 25 percent stake in the segment to Aware Super.

The construction and development giant Lendlease today released its half-year results, flagging a statutory profit after tax of $196 million.

It pointed to the impacts of COVID-19 on their investments, saying the retirement living business was affected, “with returns well below target levels in the period”.

“The trading performance of the retirement living business was subdued, with across the established village portfolio down 19 per cent, although average prices were higher,” the half-year report said.

“This resulted in low single-digit returns.”

Last week’s announced sale of the 25 per cent stake of its retirement portfolio to Aware Super at book value – $458 million – as part of its strategy to draw down Lendlease’s holdings and “realign its exposure” to the sector.

The ASX-listed company (ASX:LLC) is one of Australia’s largest owners and operators of retirement villages, with 75 properties across the country and more than 16,000 residents.

It maintains a pipeline of 2442 units, including aged care beds, worth about $1.4 billion.

This will include a $250 million integrated health research and independent living precinct has been proposed as a new model of intergenerational living.

The University of Wollongong and listed property company Lendlease this week lodged a development application for their Health and Wellbeing Precinct.

The anticipated project, announced in 2018, is billed as the nation’s first intergenerational university community, with multidisciplinary health facilities and housing.

There will be between 220 and 240 independent retirement apartments, residential aged care with 120 to 144 beds and a childcare centre for up to 100 children across the site.

Lendlease retirement living managing director Nathan Cockerill says the project will be significant.

“We’re excited to be one step closer to realising our vision to provide independent living accommodation for over 55s, where they can reap the benefits of intergenerational living and having the best facilities and research taking place on their doorstep,” Mr Cockerill said.

“Social isolation is one of the biggest issues facing older Australians. Our residents will have the chance to interact with people of all ages who are visiting the Precinct daily, whether for work, classes, healthcare or childcare or simply to enjoy the new Precinct facilities and spaces. They’ll also enjoy the benefits of living in an environment that supports a healthy active lifestyle, close to beaches, recreational reserves and cycleways.”

It covers a 3.5 hectare site at the southern end of the University’s Fairy Meadow campus.

The master planned community includes a primary community health centre, shops, community facilities, underpinned by contemporary sustainability measures.

An economic analysis suggested a $600 million return to the local economy from the project.

University of Wollongong Vice-Chancellor Professor Paul Wellings said it was a “truly transformative project”.

“(It) will focus on one of the great challenges of our time: an ageing population, and deliver innovative research and education solutions,” Professor Wellings said.

“By fostering collaboration across higher education, industry, health care providers, government and the community, this project will enable education, research and service delivery that benefits local residents and influences how health and aged care is delivered far beyond our region.

“Submitting the development application for Phase 1 is the first step in the delivery of this world-class, ground- breaking project that has been purposefully designed to promote intergenerational living and life-long learning.”

Lendlease is one of the country’s biggest developers, owners and operators of retirement living projects. It’s 2020 annual report noted 17 active projects in key population growth corridors.

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