Unitholders may be interested to read the attached article by Florence Chong in "The Australian" dated 23 February 2012 referring to the proposed sale of several of the Trust's retirement villages.  Please note that we have a number of comments on the article and will include these in our forthcoming Unitholder Update, which we intend to distribute later this week.





Prime's Hibiscus retirement villages for sale



A PORTFOLIO of Queensland retirement villages valued at more than $100 million and managed by Lend Lease will be put to the market shortly.


The portfolio, known as Hibiscus Retirement Villages, consists of seven villages in southeast Queensland and was part of the assets owned by the failed Prime Retirement & Aged Care Trust.


Prime Trust, which has other villages in Queensland, NSW and Victoria with a collective value of about $400m, went into administration in late 2010. Its creditors have been reported to be claiming it owed them more than $650m.


The Hibiscus villages are operated by Lend Lease, which took over the management rights when it acquired Lend Lease Primelife.


The Hibiscus portfolio is in the hands of receivers KordaMentha acting on behalf of creditor Capital Finance Australia (CFAL), according to a source.


"My understanding is a deal has been struck between the receivers and Lend Lease to place the assets on the market," said an industry veteran. He said Lend Lease would be paid for the management rights if and when a transaction was completed.


But another observer said a drawback for a buyer would be the "unpicking of the management agreement with Lend Lease".


The management rights to the Hibiscus portfolio and five other villages were sold to Babcock & Brown Communities, now owned by Lend Lease Primelife, for $60m. A Lend Lease spokeswoman said any decision dealing with the Hibiscus assets was entirely under the control of receivers KordaMentha.


"Lend Lease cannot make any comment on such a process and we have continued to work co-operatively with the receivers in accordance with our existing obligations," she said.


The receiver to the assets, Craig Shephard of KordaMentha, could not be reached for comment.


This appears to be the first move to break up and liquidate the portfolio of the trust, which once boasted the former federal health minister Michael Wooldridge as one of its directors.


About 9000 unitholders were hit by the collapse. Some, represented by the Prime Trust Action Group, have been agitating for a better deal after the loss of their investment.