GPT Group To Sell US Seniors Housing Portfolio For US$890 Million

Australian property company GPT Group (GPT.AU) has sold its U.S. seniors housing portfolio to health care real estate investor Health Care REIT Inc. (HCN) for US$890 million to focus on its Australian assets.

GPT said in a statement Wednesday the sale price of the portfolio, made up of a 95% interest in 34 senior living communities, would see GPT receive A$324 million for its equity interest after sale costs, taxes and the release of asset-level debt.

The sale price reflected a passing yield of 6.2%, the company said.

Michael O'Brien, GPT's chief financial officer, said the price for the portfolio showed that certain sectors of the U.S. real estate investment trust sector were performing "extremely well, including the healthcare sector".

The sale will see GPT realize a capital gain of A$119 million, against the portfolio's June 2010 book value of A$205 million, and increase the company's net tangible assets by about 6 cents per share.

The company said the proceeds of the sale would initially be used to reduce borrowing and to lower GPT's leverage to 22.5% from around 25%.

GPT plans to focus on its core Australian retail, office and industrial assets. The U.S. portfolio sale completes the company's exit from all offshore non-core assets with the exception of small interests in two real estate funds in Europe.

-By Gavin Lower, Dow Jones Newswires; 61-3-9292-2095; [e-mail]