Australian Unity (ASX: AYU) will accelerate its growth in the aged care and retirement living markets through the $65 million acquisition of a portfolio from Greengate Partnership.
The deal will see Australian Unity take ownership of three co-located retirement village and residential aged care precincts - two in the Sydney suburbs of Maroubra and Kogarah, and one in the Brisbane suburb of Woolloongabba.
The Greengate portfolio also includes a prime development site in the Brisbane riverside suburb of Auchenflower, which has approval for a vertical retirement village and residential aged care precinct.
The three operational sites will add 253 independent living units (ILUs) and 225 residential aged care (RAC) beds to the group's portfolio, with expectations for a further 88 ILUs and 110 RAC beds once the Auchenflower site is developed.
Prior to the announcement, the company already had 21 retirement villages and seven residential aged care homes across NSW and Victoria.
Today's transaction marks further expansion into Queensland where Australian Unity is also master developer of one of Australia's largest social infrastructure programs - the Herston Quarter healthcare precinct in Brisbane.
"The proposed purchase reflects our confidence in aged care as a sector where we can add real value for our members, customers and the broader Australian community - and further underlines the important role mutual organisations can take in delivering high quality, member-focused aged care and retirement living," says Australian Unity's executive general manager residential communities, Beverly Smith.
"On top of increasing demand for quality care from an ageing population, the recent Aged Care Royal Commission will result in greater support for more ageing-in place options.
"This presents opportunities for providers such as Australian Unity, which can demonstrate strength across the continuum of care, in both in-home and residential settings."
Smith explains the transaction is consistent with the company's growth strategy, while the fact Greengate's small household model is endorsed by the Royal Commission makes it compatible with Australian Unity's model of care.
"We look forward to meeting the Greengate customers and their families, as well as Greengate's team members, and welcoming them to Australian Unity," she says.
The transaction will be primarily financed from existing internal funds, including the proceeds from the inaugural issue of $120 million of Australian Unity Mutual Capital Instruments (MCI) in December 2020.
Completion of the transaction is subject to relevant third party contractual consent.
Get our daily business news
Sign up to our free email news updates.
Help us deliver quality journalism to you.
As a free and independent news site providing daily updates
during a period of unprecedented challenges for businesses everywhere
we call on your support