The Prime Retirement & Aged Care Property Trust is looking to sell the bulk of its “non-core” rental seniors living properties as part of a major restructure brought on by the downturn in the property market.
The trust’s chairman, and former Health and Aged Care Minister, Dr Michael Wooldridge wrote to shareholders advising them of the changes.
He said the trust is in the process of selling ten of its 13 rental seniors living properties in NSW, Victoria and South Australia.
The properties are run by a third-party operator under a long-term lease arrangement and the operator has the right of last refusal if an offer is made.
The trust is currently negotiating contracts with interested buyers and said it planned to make announcements about the sales soon.
Prime also plans to sell the 12 properties which were formally managed under a rental arrangement by the Fig Tree group.
“The intention is to use the proceeds of the sale of these assets to pay-down debt and strengthen the cash position of the Trust. The principal bank funding these facilities supports this strategy,” the letter said.
The global financial crisis has also had an impact on the trust’s core area of business, the 12 retirement villages in Queensland and NSW operated by the Lend Lease Primelife Group.
Last month two thirds of the Primelife villages were revalued, resulting in a 15 per cent drop in valuation according to early analysis. It is estimated that across the Primelife group property values have fallen by $70 million.
Sales are also down with rollover rates at about 4.5 per cent, compared to a projected seven to eight per cent.
Last month the trust announced the sale of the Veronica Nursing Home, located at its Brentwood Village in NSW.