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Stockland (ASX:SGP) acquires Halcyon for $620m
Render of home in a Halcyon community. Source: Halcyon
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  • To extend its lend lease portfolio, Stockland (SGP) has purchased Queensland-based Halcyon Group's land lease communities company for $620 million
  • The deal included the purchase of 3800 plots spread over 13 land lease communities
  • As part of the purchase, Stockland will add approximately 2500 new clients to its portfolio, as well as over 100 staff
  • Stockland Communities CEO Andrew Whitson said the acquisition will increase its footprint in the over 50s market
  • Stockland shares are down 1.25 per cent, sitting at $4.34 at 11:11 am AEST

Stockland (SGP) has acquired Queensland-based Halcyon Group’s land lease communities business for $620 million to expand its lend lease portfolio.

The company has entered into a binding agreement, with the purchase price subject to certain adjustments at completion and transaction costs.

Stockland CEO Tarun Gupta said the acquisition will grow the size of its lend lease portfolio to 7800 sites.

"Land lease communities deliver attractive returns as the demand for high quality, affordable housing solutions grows," he said.

"This demand is driven by Australia’s aging population and baby boomers reaching retirement age."

The deal includes the purchase of 3800 plots spread over 13 land lease communities, including six established communities, four under development, and three projects in the works.

As part of the purchase, Stockland will add approximately 2500 new clients to its portfolio, as well as over 100 staff.

"We see the land lease communities business as complementary to our masterplanned communities land bank and believe there are synergies we can leverage to grow the business at scale nationally and achieve our ambition of becoming a leading operator in this space," Mr Gupta said.

The transaction is accretive to funds from operation per security with Stockland to cover the whole transaction price and associated expenditures with existing liquidity.

Payment will be made in two instalments; the first will be paid when the deal is completed in mid-August, with the remaining $310 million deferred until July 2022.

Halcyon Group managing director Bevan Geissmann said the acquisition would help Halcyon move to its next phase of growth.

"We’re really delighted that Stockland recognises the strengths in Halcyon’s brand and capability and we welcome its commitment to our people and customers," Dr Geissmann said.

Stockland Communities CEO Andrew Whitson said the acquisition will increase its footprint in the over 50s market.

"The potential for the land lease business to reshape lifestyle living for the baby boomer demographic is really exciting," he said.

"As a market, the over-50s are looking for well-designed, personalised housing; security; access to facilities and activities to maintain active lifestyles.

"This acquisition enables us to offer more customers access to this alternate over 50s lifestyle offering, brings forward our land lease growth plans and enhances our ability to leverage our competitive strengths in masterplanned communities to generate quality recurring income."

Stockland said it has a strong balance sheet with gearing estimated at around 22 per cent at June 30 2021, at the low end of the target range of 20-30 per cent, with liquidity at over $2 billion.

Stockland anticipates completing the transaction on August 16, 2021.

SGP shares are down 1.25 per cent, sitting at $4.34 at 11:11 am AEST.

SGP by the numbers
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