Meadowbrooke Lifestyle Estate. Source: Meadowbrooke Lifestyle Estate/Facebook
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  • Aspen Group (APZ) enters into a conditional contract to purchase the Meadowbrooke Lifestyle Estate in Boyanup, Western Australia, through a receivership sale
  • The acquisition price is $3.258 million, which translates to about $358,000 per hectare and $18,000 for each approved site
  • The project went into receivership in 2019, and housing prices decreased at that time but Aspen believes prices will rise
  • Shares in Aspen are in the grey trading at $1.63 at 1:10 pm AEDT

Aspen Group (APZ) has entered into a conditional contract to purchase the Meadowbrooke Lifestyle Estate in Boyanup, Western Australia, through a receivership sale.

The acquisition price is $3.258 million, which translates to about $358,000 per hectare and $18,000 for each approved site. Settlement is likely to take place in December 2021.

Aspen believes the price is less than 50 per cent of the replacement cost.

Meadowbrooke is a retirement community that is being built and run on a land lease basis. The land is 9.1 hectares in size, with permissions in place for 181 dwellings, 17 of which have been completed and sold.

The infrastructure for the following 78 homes is complete. The existing residences are occupied on a land lease arrangement, with current contracted land rates of $172 per week and exit costs of 15 per cent.

The project went into receivership in 2019 — the same time housing prices dropped off. Currently, the average price of new residences sold is roughly $312,000, with the final two sold during the receivership at $250,000.

Despite this, Aspen predicts that once the community is out of receivership, sales volumes and prices will rise again, aided by a general revival in WA’s property markets.

The property is now operating at a slight loss, which includes the costs of keeping the development site.

Aspen anticipates creating value for shareholders by producing cash gains from the sale of dwellings as well as a valuation increase on the serviced land plots once they are leased.

As a result of the agreement, Aspen’s land development pipeline will grow by 44 per cent to 534 authorised sites, with an average book value of only $32,000 per site. More than a hundred of these locations are completely serviced.

Shares in Aspen are in the grey trading at $1.63 at 1:10 pm AEDT.

APZ by the numbers
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