Legal & General (L&G) has acquired Helical's UK senior living business called Renaissance Villages (RV) for £102 mln (€114 mln), including £51 mln in cash and £46 mln of debt secured against the portfolio.
The price represents a discount of 13% to the portfolio's book value of £117 mln.
L&G said it will integrate the business into Inspired Villages Group, an operator and developer of later living accommodation which it acquired in August this year.
Arranged over four village schemes, located in Warwickshire, West Sussex, Devon and Hampshire, the RV business comprises of around 700 homes, of which over half are already sold and occupied, with the remainder ready for sale or under construction. When combined, this brings Inspired Villages Group’s development portfolio to around 1,000 homes.
The acquisition of RV allows Legal & General to accelerate its later living plans by several years, both in terms of housing delivery and operational skills, according to Phil Bayliss, head of Later Living at Legal & General Capital. 'Due to a scarcity of existing stock in the UK’s later living housing market, the main path to scaling our business is through organic growth. This acquisition provides us with the immediate critical mass to substantially expand resourcing and growth to become the market leader in the later living market.'
The disposal represents the largest element of Helical’s non-core disposal programme and enables the company to substantially complete its disposal strategy for non-core assets. In the year to 31 March 2017, the retirement village portfolio generated pre-tax profits of £1.8 mln before provisions against stock of £5.3 mln, a net loss before tax of £3.5 mln.
Following this sale, non-core assets comprise just 4% of the Group’s total portfolio. The Group’s core focus remains on high-quality London and Manchester offices and the logistics sector.
Gerald Kaye, CEO of Helical, commented: 'While we have generated good profits in the past from our retirement village portfolio we firmly believe that now is the right time to sell our interests, reduce our gearing and focus solely on our core sectors where we expect to be able to generate stronger Shareholder returns in the future.'
