Scape Australia, with the backing of a global capital partner, has acquired the Aveo retirement portfolio from Brookfield Asset Management for A$3.85bn (€2.2bn), in what will be Australia’s largest-ever direct real estate transaction.
The transaction is being done between Brookfield and Scape’s The Living Company, a newly established brand that will hold and operate all of Scape’s assets.
Aveo owns a portfolio of more than 10,000 units located in premier metropolitan suburbs across the eastern seaboard of Australia.
Since acquiring the then-listed retirement living company for A$1.3bn in 2019, Brookfield privatised and transformed Aveo into Australia’s premier retirement living platform, achieving near-full occupancy and investing more than A$500m across the business.
Malaysian company, Mulpha International, retained a 15% stake in Aveo on Brookfield’s acquisition of the business.
Lowell Baron, Brookfield real estate CEO, said: “The living sector is and has been a top segment for our global real estate strategy for more than a decade. Aveo is a prime example of the operations-led turnaround investing that we excel at.
“Working with the Aveo team we leveraged our operating expertise to significantly transform the business, improving the resident experience and creating vibrant communities, all of which have led to record sales and occupancy levels. Given the favourable market dynamics that underpin the continued growth of the living sector, we will look to invest further capital in living across Asia Pacific.”
Scape has not yet commented on the Aveo transaction, but it has been widely reported in recent days that the deal is being backed by Korea’s National Pension Service.
Ruban Kaneshamoorthy, Brookfield co-head of real estate Australia, said: “Brookfield took a contrarian view when we invested in Aveo. We identified a challenged platform that owned great real estate, and this allowed us to execute an operations-driven turnaround.
“During the past five years, in partnership with the Aveo management team, we invested heavily in the business and executed a business plan that moved Aveo from a platform with a lack of focus and direction to a high-performance, resident-first organisation that is well-placed to take advantage of the strong demographic and structural tailwinds underpinning the growth of retirement living.”
Greg Shaw, CEO of Mulpha International, said: “The business has thrived under Brookfield leadership and an exceptional management team. This transaction will set the foundation for further growth supported by favourable macro tailwinds.”
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