- Aspen has bought Lewis Fields Retirement Village in Strathalbyn (SA) for $2.36 million
- 54 of the 80 approved sites have yet to be built
- The company will switch arrangements to a land lease community model
In addition to its investments in student accommodation, the Aspen Group (ASX: APZ) has made a move in the other direction with the purchase of a partially completed retirement village in South Australia.
The group announced in a statement to the ASX today an agreement to buy the Lewis Fields Retirement Village in Strathalbyn for $2.36 million.
This equates to about $30,000 per approved site, including the 26 existing retirement homes under contract.
This is the group’s fifth acquisition of the current financial year (FY21). They have increased their sites to 2,755 – a 25% increase – this year.
Strathalbyn
Founded in 1839, Strathalbyn lies about 60 kilometres southeast of Adelaide and is a self-described ‘heritage town’, of population approximately 6,500. It is known as the gateway to the Langhorne Creek wine region.
Scenes from the classic Australian movie ‘Picnic at Hanging Rock’ were filmed in the town in 1975.
There is a relatively high proportion of ‘mature age’ people living in the area, with 43% of local residents aged over 50, and a median age of 45, according to the 2016 census.
Lewis Fields is the premier retirement village in the town, and the only one under development and offering new houses, according to the ASX statement from the Aspen Group.
The property itself spans 3.7 hectares and is approved for a retirement village with 80 houses, of which 26 are already built.
The surrounding infrastructure and gardens are all completed for current residences, and also in place for the next four.
The average age of occupants is 79 years of age. All existing houses are operated under a loan/lease arrangement, with recent resales priced around $300,000. The residents pay for ‘nearly all’ the operations of the village.
Development potential
Aspen will aim to develop the rest of the village, and sell the remaining 54 houses under a land lease community model. In this arrangement, the client owns the house, and may get assistance from the government to cover some of the land rent. This can make it more attractive for clients, with less exit fees and a more affordable entry fee.
Already the Group has experience in doing this, with their existing Alexandrina Cove Lifestyle Village, at Coorong Quays, also in South Australia. This resulted in higher sales prices and volumes, and better results for investors, according to the company.
Aspen Group share prices closed steady at $1.23 today (market capitalisation of $142.55 million), up from a 12-month low of 98 cents in July last year.
