KOREANS FIND AGED-CARE BUYER FOR VICTORIA TOWERS
Written on the 2 November 2015 by Nick Nichols
ONE of Australia's largest aged-care providers has taken a foothold in the Korean-backed Victoria Towers project at Southport.
Estia Health has snared the strata-titled Nobel Life Aged Care facility in the $250 million development. The purchase price has not been disclosed.
The move comes on the heels of sales picking up in the 35-storey tower which has had a troubled run since it was developed in 2011 by South Korean giant Lotte Engineering and Construction and Korean company City Plan Partners.
Estia has acquired the holding from Nobel Life Aged Care, a company established by the developers to cater for the over-50s market targeted by project.
Lotte and City Plan Partners have been under pressure for years to establish the aged-care facility which has been integral to the marketing of Victoria Towers since inception.
The facility is partially completed and the sale to Estia Health is seen as a major step forward for the high rise project as apartment sales in the tower finally start to gain traction.
The Koreans have been patient with the project which was developed at a time when high rise apartments were in oversupply on the Gold Coast. They have held firm on prices and are now benefiting from rising demand.
The sale to Estia Health was brokered by Phillip Smith and Chris O'Driscoll, of Colliers International, who say the aged-care site generated strong interest from national, private and not-for-profit operators.
Colliers has sold more than $100 million in residential aged-care facilities in Queensland over the past 18 months, and about 3000 residential aged-care beds nationally over the past two years.
The sector has been running hot in recent years, with investment buoyed by private equity investors and listed companies.
A Colliers report released in June says the industry has undergone consolidation since regulatory reforms provided clarity on the operations of the sector in 2014.
The Victoria Towers acquisition by the ASX-listed Estia is among four new sites the company has just bought, including three in Adelaide, bringing its portfolio to 58 centres with 4697 places.
"These acquisitions fit perfectly with into our existing networks in Adelaide and the Gold Coast and will deliver 256 additional single beds when extensions are fully completed," says Estia's CEO Paul Gregersen.
The newly acquired facilities currently have 181 places, but Estia plans to undertake extensions this financial year to boost this number by 75 beds.
Estia integrated the Gold Coast facility into its centralised system on November 1 and plans to do the same in Adelaide on December 1.
Author: Nick Nichols