Australia’s leading residential developer, Stockland, has announced a string of separate deals with Japan’s Mitsubishi Estate, Canada’s Ivanhoé Cambridge and Sweden’s EQT Infrastructure worth A$2bn (€1.3bn) in total.
Stockland is selling its retirement living business to EQT Infrastructure for A$987m, freeing up that capital to be reinvested into other businesses. EQT will also acquire the associated management platform.
Separately, Stockland has formed Stockland Residential Rental Partnership (SRRP) with Mitsubishi Estate Asia (MEA) to focus on development and long-term ownership of land lease communities and to capitalise on the group’s A$4bn landbank.
Stockland has also formed a vehicle, the M Park Trust (TMPT) with Ivanhoe Cambridge taking a 49% interest to develop M Park, a A$2bn multi-stage life sciences and technology precinct located at Macquarie Park, in Sydney’s north.
Ivanhoe Cambridge has agreed to initially invest on a “programmatic fund-through” basis in TMPT and focus on stage one of the M Park development valued at A$760m. Ivanhoé Cambridge will have the opportunity to invest in future stages of the project.
Stockland’s CEO and managing director, Tarun Gupta, said: “Formation of the capital partnership at M Park delivers on our strategy to expand our third-party capital platform and to accelerate delivery of our A$9.1bn commercial property development pipeline.”
Ivanhoé Cambridge co-head of Asia-Pacific, George Agethen, said: “M Park provides our portfolio with meaningful exposure and diversification to both knowledge-based workplaces and data centres.
Backed by high-credit tenants, the investment offered “a resilient income profile with promising growth potential”, he said.
Of the partnership with MEA, Gupta said: “We are executing on the strategy we announced in late 2021”.
Under the agreement with MEA, the Japanese investors will have a 49.9% share of around A$250m for the initial portfolio of six communities, which will form the seed assets of the SRRP. Additional capital will come from debt.
The SRRP will initially be geared to 34%. Over time, the targetted gearing range for the partnership is 50-60%.
Gupta said: “This partnership will enable us to improve our market position by creating opportunities to scale up our Land Lease Communities business with a high-quality capital partner via delivery of the A$4bn secured development pipeline.”
“This transaction will enhance the group’s return on invested capital and enable us to drive growth in third party funds under management.”
Mitsubishi Estate Asia’s head of Australia, Yuzo Nishiyama, said: “We regard this as a highly strategic opportunity with Stockland to be a market leader in this emerging sector through a long-term, open-ended partnership.
“This transaction also reinforces MEA’s commitment to Australia, and our desire to expand into new real estate sectors.”
Stockland will be responsible for managing the portfolio of established land lease communities and carrying out the development of new communities on behalf of SRRP.
Partner and head of Asia-Pacific for EQT Infrastructure, Ken Wong, said: “We are excited about working together as we transition the business toward a stand-alone platform that continues to develop and operate high-quality retirement villages.”
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