ING Management Limited ("IML"), as Responsible Entity of ING Real Estate Community Living Fund ("ILF" or "the Fund"), has announced the Fund has contracted to acquire a 49% interest in an approximately €14 million (US$19.35 million) seniors housing community in Palm Beach county, Florida. The asset, "Lake Worth Gardens", was contracted on an initial yield of 8.2%, and a discount to valuation of 2.8%. The acquisition will further add to the Fund's strategic partnership with Chartwell Seniors Housing REIT (50% co-owner) and will be managed by the Horizon Bay Chartwell Joint Venture.
Located in the favourable seniors and economic demographic of Fort Lauderdale/Miami Beach metropolitan area, Lake Worth Gardens complements the Fund's presence in the Florida senior's market, taking its ownership in the State to four seniors communities. Palm Beach county is also one of the fastest growing metropolitan areas in the United States.
The community is situated in a residential area, close to transport, shops, restaurants and cultural activities. Consisting of 170 independent living units, the property was built in 1984 and has been well maintained. It provides a full spectrum of amenities to residents, including activity rooms, a swimming pool, movie theatre, putting greens, lounge areas, library, dining areas and exercise facilities. Unit sizes range from 65-105 m², with all rooms equipped with air conditioning, kitchens, washers/dryers and smoke detectors.
Occupancy is currently 93% and expected to remain strong. Horizon Bay has been managing Lake Worth Gardens since January 2005 and the property has enjoyed strong occupancies over this time. Further, Horizon Bay Chartwell has a demonstrated track record in sustaining strong occupancies across the Fund's portfolio of seniors communities.
Hugh Thomson, CEO of ING Real Estate Investment Management Australia, said: "This acquisition makes strategic sense for the Fund, further establishing its footprint into the attractive Florida seniors market. It also enables us to extract management synergies from the already established Horizon Bay Chartwell platform in Florida, which is performing strongly."
The acquisition will be fully debt funded at an average rate of 6.8%. This takes the Fund's look through gearing up from 59.5% to 60.4%. Gearing levels will be reduced in due course, through utilisation of the DRP.
ING Management Limited confirms 2007 DPU guidance of 10.7cents. This represents 10% forecast growth on 2006 distributions and a yield of 9.6% based on the current unit price of $1.12.
Ian Muir, CEO of ILF, added: "This acquisition further enhances the Fund's exposure to the US Seniors market, providing added concentration to locations with strong income and ageing demographics."