It was reported in the AFR yesterday that Stockland (SGP) is...

It was reported in the AFR yesterday that Stockland (SGP) is looking to divest its retirement village assets in favour of investing in rental apartments and land lease communities.

"Stockland will sell an estimated $2 billion of retail and retirement living assets as it cuts exposure to those sectors, whilst boosting investment in residential – through build-to-sell and build-to-rent apartments, as well as in land lease communities".

This is a significant shift in SGP's strategy and looks to place greater focus on land lease communities. From my observation, their business model in relation to land lease communities seems to very closely mirror Ingenia's .

At the moment INA and SGP have a similar new development profiles however I expect that SGP will take quite a number of years and perhaps significant new capital to ever reach INA's existing 8,000+ long term residential portfolio.

IMO having Stockland seriously enter land lease community development can only add further strength and confidence to this relatively new market segment.

It may take a few weeks for the market to absorb the recent retail issue shortfall but in my view the next couple of years look very positive.