AVEO'S ONE FOR THE AGES
Written on the 17 July 2014 by Laura Daquino
AVEO Group (ASX: AOG) is fast transforming into a pure retirement group, kicking off The Hudson’s selling process earlier this week and settling on a major Sydney apartment complex.
The owner, operator and manager of retirement communities has been ‘slimming down’ operations for some time to secure its place as the Australian leader in retirement villages.
Focus has been turned to phasing out of projects such as lifestyle precinct The Hudson (pictured) at Albion Mill Village in Brisbane’s inner-city, of which a portion was sold off earlier this week.
Stage one of The Hudson has been sold to Perth-based boutique developer Twin Ocean Group for $7.5 million at a premium to book value.
This signals Twin Ocean Group’s confidence in the market, its fourth acquisition in Queensland, off the back of its triple tower development at 188 Wickham Street.
Queensland group Hutchinson Builders has been awarded the construction contract for the 19-month project. Construction on The Hudson is set to commence in the coming months to a value of $50 million.
Furthermore, AOG has settled on all but two of its Luxe apartments in Sydney Woolloomooloo, garnering the company $89 million to date.
AOG CEO Geoff Grady says the settlement of Luxe and other projects means the company is well-positioned to capture other retirement development opportunities.
“We have made substantial progress in 2014 in our transformation to a pure retirement group,” says Grady.
“In addition to the settlements at Luxe and the active land estates, we have generated $230 million from sales of non-retirement assets, we have exited all of our non-retirement fractional interests and we have established a number of key strategic relationships to provide increased care services to our 75 retirement villages across the country.
“These initiatives are enabling us to strengthen our financial position, and also adding to our capacity to seek out and capture exciting new retirement development opportunities to add to our market-leading retirement portfolio.”
AOG’s strategy has been met with investor interest, signalled by the company’s re-introduction to the ASX-200, and also direct financial reward marked by a downward revision of net debt from $350 million to $320 million on June 30.
The company previously traded under FKP Property Group.