Warning from Stockland CEO Tarun Gupta to retirement village operators

For seven years, Stockland has been looking for a buyer or financial partner for its Retirement Living business.

CEO Tarun Gupta (pictured) announced last week that he had sold all 58 villages and 10 ongoing development projects to Swedish investment firm EQT Infrastructure (EQT) for $987 million, close to its value of $1 billion.

HY22 Finance posted 415 sales over the past six months in Retirement Living, with last November the highest monthly result ever. The CEO said Retirement Living was making a 3% cash profit, which fell short of Stockland’s expectations.

However, he said a bigger issue for retirement owners and operators is the “continuum of care” residents need as they age.

“They are living longer and the average age in our retirement villages today is around 82,” he said.

“So they need a lot more care. The sector is moving more towards what you would call health care with the co-location of elderly care capabilities. »

A growing number of operators are selling their product on the delivery continuum of care. For example, LDK Seniors’ Living markets its “One Move Promise”.

Tarun did not see the economics of paying for this capacity at Stockland and decided to sell the division and seek to expand its land rental offering. Stockland joins land lease operators Aspen Group, Ingenia Communities, Lifestyle Communities, Palm Lake Resort, Serenitas and Mirvac.

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