National Lifestyle Villages
National Lifestyle Villages (NLV) is the pioneer of land lease communities in Australia with a focus on affordable housing for active retirees in Western Australia. The NLV portfolio consists of more than 2,000 homes and 3,000 residents across 9 villages in metro Perth and the south west region.
In 2014 global private equity firm Blackstone invested $150 million through a securitised financing over the gross rental income of the business. The forecast growth in the business failed to deliver the profits required to fund the working capital requirements of the business. In combination with a soft real estate cycle and operational and financial underperformance, the company’s financiers and owners identified a need for change.
Kelvin Flynn was appointed as Acting CEO of National Lifestyle Villages (NLV) in October 2017. Kelvin and the Harvis team were appointed with the mandate to turnaround business performance, improve the culture and prepare the business for a balance sheet recapitalisation or to transition to new ownership. Improving performance required a complete overhaul of the strategic direction and operational management of the business.
The turnaround plan executed by the Harvis team was multi-faceted:
- Reinvestment in all communities with a multi-million dollar maintenance programme across village facilities and inventory;
- Simplified product range and lower cost to provide affordable housing;
- Closer communication with residents around the renewal plan and future of the business;
- Delivered previously delayed commitments at villages including infrastructure upgrades, a major clubhouse and one new village commencement;
- Refocused on service delivery and the customer (residents);
- Overhauled and reset sales and marketing strategy and performance; and
- Delivered a solution for balance sheet solvency.
The role culminated in the successful turnaround of the business and its sale to GIC backed Serenitas in June 2018. Blackstone achieved 100c/$ recovery on principal and accrued interest. The NLV transaction was an opportunity to bring to bear Harvis’ core special situations and hands-on turnaround expertise for the benefit of NLV’s stakeholders.