Lifestyle Communities Limited (ASX: LIC) notified, that it had executed contracts to buy a development site in Tyabb, located on Victoriaâs Mornington Peninsula. The settlement is anticipated to occur by the end of 2020, with construction being expected to begin, subsequently.
The contracts are conditional on procurement of a planning permit. The company has a track record of developments on the Mornington Peninsula, and there is a robust demand for reasonable retirement accommodation. Therefore, LIC is confident about receiving a planning permit.
The consequence of the acquisition, would be a rise of LICâs portfolio by around 185 sites to 3,549, comprising of sites in planning, development or under management. The Tyabb site is positioned well, adjacent to the town centre and public transport. It would offer an affordable, active and engaging environment, that baby-boomers on the Mornington Peninsula could call their home.
Mr James Kelly, Managing Director, LIC said that Tyabb would be the companyâs third community on the Mornington Peninsula. LICâs Tyabb, is situated less than ten minutes away from LICâs Bittern, which had been its quickest selling community till date.
Feasibility and Site Assessment
The amalgamation of 2 successful projects, positioned in the neighbouring townships of Hastings and Bittern, forms the demographics of the Mornington Peninsula, which aids the development of a Lifestyle community in Tyabb.
The main parameters that are measured when evaluating a site for a new Lifestyle community centre consists of:
- Proposed house prices in the community relative to the median house price in the region.
- The count of people in the catchment.
- The forecast rate of population growth in that area.
- Competition and alternative affordable housing solutions.
The Tyabb site meets the following investment criteria which includes:
- The catchment area has a median house price of circa $630,000.
- There are 164,000 people in the primary catchment.
- Around 69,470 people within the primary catchment are aged over 50.
In its recently released half-year results for the period ended 31 December 2018, the company had attained net profit after tax attributable to shareholders of $21.9 million, for the first half of 2019 financial year, which was up by 38% on the previous corresponding period.
The total number of homes settled, rose to 2,133 homes, a rise of 186 settlements during the half-year. Community cash flows stood at $6.6 million, up from $5.6 million in the previous half-year. It was determined by a $1.7 million rise in rental revenue, a $0.5 million rise in deferred management fees received, and partly offset by a $1.1 million rise in community management expenses because of augmented homes under management.
During the half-year period, LIC constantly progressed its communities at Shepparton, Berwick Waters, Bittern and Ocean Grove. The construction work was concluded at Geelong, and the construction work began at Mount Duneed. As at 31 December 2018, the company reported that Lifestyle Brookfield in Melton, Lifestyle Seasons in Tarneit, Lifestyle Warragul, Lifestyle Casey Fields in Cranbourne etc. were completely sold.
On 18 December 2018, LIC notified the market that it had executed a contract of sale to buy a site situated in Plumpton, Victoria. The Settlement was anticipated to take place in the third quarter of 2019, with construction work expected to begin soon on it.
The stock of the company is currently trading at A$5.145 (as on 12 March 2019, 3:10 pm AEST), down by 0.676% from its previous close.
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