Rout of Groupe Sélection: 3,000 RPA places sold to Ontarians

The fall of one of Quebec’s kings of private seniors’ residences ultimately benefits an Ontario giant. Chartwell has just paid half a billion dollars for 12 RPAs in Quebec, five of which belonged to Groupe Sélection before its collapse.

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Réal Bouclin, the Quebecer with $212 million in personal debt, sees his old buildings – 1,400 units – pass into the hands of Ontarians. The transaction concluded on June 20 is worth $511 million in total.

The Ontario chain already had 27 residences in Quebec, where it drew 25% of its revenues in 2023, a proportion that the bite taken from the remains of Bouclin will increase.

The transaction marks the end of the domination of local companies in the RPA market. Quebec counted on a few local giants, but the sale of the Maurice Group to the Americans and the dismantling of the Sélection Group dealt a blow to the sector.

The big 5 RPAs in Quebec

All figures are as of March 31, 2024, when Quebec had 1,393 RPAs for 136,525 units

· Cogir – 21,416 units in 75 residences

· Maurice Group – 11,473 units in 36 residences

· Chartwell – 8973 units in 27 residences

· Savoie Group (Résidences Soleil) – 6,012 units in 15 residences

· Les Bâtisseurs – 22 residences

_{Sources: RQRA and company websites}

Chartwell is pleased that the 12 buildings will “increase [sa] presence in high-growth Quebec cities.

The Ontario king is spending half a billion to add 3,233 units to his portfolio in Quebec. In Lévis (575), in Saint-Jérôme (302), in Terrebonne (226), in Saint-Jean-sur-Richelieu (261), in Rock Forest (333), in Gatineau (306), in Shawinigan (316) , in Val-Bélair (293) and L’Ancienne-Lorette (621), Quebecers aged 65 and over have a new owner.

Following the defeat of Bouclin, the five Vilia buildings which belonged to Sélection were first purchased by Blackstone. The powerful American investment fund wasted no time in reselling them to Chartwell.

The Ontario giant is a pillar of the sector in Canada. It owns exclusively or in part a total of 159 residences for the elderly (23,923 units).

“We hit the wall”

For the first time in 10 years, the number of units in RPAs fell in 2023 in Quebec. The net loss was 1,203 units while 103 RPAs closed their doors between 1^is April 2023 and March 31, 2024.

“We have just hit a wall,” warns Hans Brouillette, of the Regroupement québécois des Résidences pour Seniors (RQRA).

Nowhere else than in the region does it hurt more, adds the one who represents 800 RPA members in Quebec, because “it is often the only RPA in the region that closes”.

The market is slow, construction costs and interest rates are in decline. More than ever, it is necessary to have strong backing to own and manage RPA units.

“If Quebecers want to buy RPAs, let them do so,” argues the RQRA, which much prefers to see local interests take over the sector.

But this is not the case, we see. The Caisse de dépôt has withdrawn from the market, Investissement Québec and the Fonds de solidarité FTQ are not interested either.

“If we want to maintain the number of RPA units, we have to let those who want to invest act,” says Hans Brouillette about Chartwell’s Ontarians.

It is the number of units that matters, he adds, because since 2008, the number of residences in Quebec has increased from 2,276 to 1,393. The trend is towards large buildings of 300 to 500 units.

Chartwell is banking on growing Quebec cities, such as Gatineau, Quebec and the Montreal region. This confirms the trend observed by the RQRA: residences are concentrated in large cities and in huge buildings.

“If Quebec does nothing, there will soon be no more RPAs left in the region,” warns the RQRA spokesperson.