Ingenia Communities Group (ASX:INA) all in on lifestyle communities


by Jessica Amir

Ingenia Communities Group Limited (ASX:INA) CEO & Managing Director, Simon Owen discusses the company’s recent sale of its Tasmanian Garden Villages to fund greenfield faster growing lifestyle development projects.

Jessica Amir:
Hi I’m Jessica Amir for the Finance News Network. Joining me from Ingenia Communities Group Limited (ASX:INA) is CEO and Managing Director, Simon Owen. Simon, welcome back.

Simon Owen: Jessica, it’s great to be here.

Jessica Amir: For new investors, Ingenia provides affordable seniors accommodation. Just tell us more?

Simon Owen: Across Australia Ingenia owns 62 seniors rental and lifestyle villages, heavily concentrated in Queensland, New South Wales and Victoria, and we’re in the midst of building out a very exciting pipeline of new projects.

Jessica Amir: Ingenia’sin the midst of recycling capital into your faster growing lifestyle properties department. How is that progressing?

Simon Owen: One of the key things that we’re really focusing on at the moment is self-funding the accelerated build out of our pipeline. So we’ve identified around $100 million of non-core and regional assets that we’re looking to divest. We’re about one third of the way through at the moment. So in the last couple of weeks, we’ve sold five rental villages in Tasmania and two smaller lifestyle communities on the New South Wales central coast. And then I would expect that over the next 12 months, you’ll see us sell down the balance of that $100 million of non-core assets. And all of the proceeds of that will be recycled into the accelerated build out of our development pipeline.

Jessica Amir: Now to the portfolio in a little more detail. Just tell us about the size and spread of lifestyle communities?

Simon Owen: Our lifestyle communities, which operates under what we call the land lease model. That’s where the resident owns the home and Ingenia continues to own the land. We’ve got around 2,200 homes spread across 31 communities. We on average charge $160 a week in rent and that part of the business is going very well. I think there’s, what we call internally within the business, a senior’s tsunami coming through. So everyday in Australia, there’s nearly 1,000 people turning 65 and so we think there’s very strong tailwinds that are going to support our business, over the next 30 years.

Jessica Amir: What about the holiday parks?

Simon Owen: Ingenia Holidays is the more tourism-orientated component of our business. So across some New South Wales and Queensland, we have over 2,000 tourism cabins and camping and caravan sites. That part of the business provides us with great recurrent income, and the second biggest user of our holiday parks areactually grey nomads. So seniors who have retired or downsized and grab their caravan, and basically do the east coast or some of the larger internal travel routes, within Australia. So that part of the business is going well. And we’re really excited about the opportunity to grow and expand, and increase repeat visitation within that part of the business.

Jessica Amir: What about Ingenia Gardens?

Simon Owen: Ingenia Gardens is our affordable seniors rental business. So that’s where Ingeniaactually owns the building and the land, and we’re renting out a one-bedroom apartment to seniors. We have an onsite chef who prepares a lovely meal for our residents, particularly at lunchtime and that part of the business is going very well. We have around 1,600 apartments in that business across all states of Australia, except for South Australia. Very difficult to build new rental communities at the moment, but what we’re doing is really I guess, focusing on the organic growth levers within that business, which is really around occupancy, rent and trying to push costs out of the business.

Jessica Amir: In terms of strategy, just tell us where the business is heading and how that’s progressing?

Simon Owen: I think if you look back over the last three years, our strategy has really been around acquisitions. So really focusing on buying parks, growing the business that way. The next three years is really going to be around building out our development pipeline. So Ingenia today has a land bank of around 2,850 home sites. And over the next three years, you’re really going to see us focus on building out that pipeline. This year we remain on track for between 260 to 280 new home settlements. Next year we’ve given the market guidance for 350 plus settlements, and we see further growth beyond that. So I guess the last three years has really been about portfolio composition, the next three years is around execution and building out that pipeline.

Jessica Amir: Last question and a little bit more specifically. What’s your outlook for the second half of this financial year?

Simon Owen: We’re coming home with I guess, what you’d say as a sailor, we’re coming home with a wet sail. We’ve got over 200 residents, who have either deposited or contracted to move into one of our communities. We’re expecting a very strong last quarter to the year. We’ve got two new communities that our first residents are moving into in May. So that’s our first Greenfields project just north of Newcastle, which is called Latitude One. And the first residents are moving into that community,around the second week of May. So that’s very exciting.

And we’ve also got a large new community that we’re just finalising down on the New South Wales south coast, which is called Lake Conjola. And our first resident actually moved in there a couple of weeks ago. So I’m heading down there in a couple of weeks and I look forward to meeting them. But we’ve got a great pipeline of projects, and we expect that it’ll be a very strong close to the financial year.

Jessica Amir: Simon Owen, thank you so much for the update.

Simon Owen: Thanks very much Jessica.


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