APG Asset Management is investing in a platform of Australian retirement villages in a deal understood to be worth AUD470m (€314m).
Lendlease said it had sold one quarter of its AUD1.7bn Retirement Living business to APG, which manages €456bn of Dutch pension assets.
APG, the largest pension fund investor in the Netherlands, appears to have beaten other large institutional investors in securing the investment. At the end of August, IPE Real Assets reported that sovereign wealth funds were competing for the portfolio. Local Media reports this week suggested that Singapore’s GIC and China’s CIC were most likely to win.
According to a source close to the transaction, APG acquired the stake for AUD470m. Lendlease would not disclose the price, but did say the transaction reflected a “small premium to the carrying value” at 30 June 2017.
The investment in the the portfolio – which includes more than 12,500 units across 71 retirement villages, home to 16,500 residents – is APG’s first investment in the retirement living sector in Asia-Pacific.
Patrick Kanters, managing director and global head of real assets for APG, said: “This investment is in line with APG’s strategy of gaining meaningful exposure to sectors underpinned by mega-trends, such as ageing demographics.
“We believe this is an opportune time to enter the retirement living sector in Australia by acquiring a stake in a business with a portfolio of significant scale and a best-in-class operating team, while being well-placed for future growth.”
Lendlease, Australia’s largest operator of retirement villages, will retain its 75% stake and the business will retain the Lendlease brand.
The investment deepens APG’s relationship with Lendlease. Its most notable investment with the Australian company is a 10% stake in Tower 3 of Lendlease’s Barangaroo development on Sydney’s foreshore.
“Our strategy for the retirement living business has always been to bring in an investment partner who is both aligned to our values and attuned to the future growth potential of the sector,” said Steve McCann, Lendlease group chief executive officer and managing director.
“We are delighted to be partnering with APG, an existing Lendlease investment partner, as they have an outstanding track record of investment excellence.”