Singapore-based SC Capital has entered the retirement sector with its first investment in Australia, in partnership with retirement living operator Aura Holdings.
IPE Real Assets understands that SC Capital is providing AUD$150m (€99m) of funding for the Aura development programme on behalf of its RECAP Fund series.
SC Capital’s chairman Suchad Chiaranussati told IPE Real Assets that, given the demographics in Australia and elsewhere in the world, independent retirement living is a sector “that is close to our heart”.
The percentage of retirees aged over 65 living in retirement or aged-care facilities in Australia is approximately half that of other developed countries like the US, UK, Canada and New Zealand.
“We have been looking for an opportunity to invest into the sector in the last few years, then this opportunity came to us in Australia,” Chiaranussati said, adding that, conceivably, SC Capital will be investing in the sector over the next 10 years.
That suggests that SC Capital’s current fund, RECAP IV, and future funds will be investing in independent retirement living.
SC Capital sees Brisbane and Sydney as the Australian cities with the greatest need for upmarket units – the type that will be provided by Aura – in in-fill urban areas.
It will initially fund two new developments in Maroochydore, on the Sunshine Coast north of Brisbane, and at Lutwyche, a Brisbane suburb.
Chiaranussati says SC Capital will be looking beyond Australia into New Zealand and Southeast Asia for investment opportunities in retirement living.
Under the agreement, SC Capital and Aura will jointly fund development of up to 2,000 new independent living units throughout eastern Australia.
The agreement with Aura allows for further funding of up to 50% of a future pipeline of retirement projects across eastern Australia. Aura has a current pipeline of almost 1,200 units under its control across eight sites.
Blue Sky Alternative Investments, which has partnered with Aura since its inception in 2016, will meet the remaining 50% of funding requirements.
Tim Russell, co-founder of Aura, said: “We have received development approval for our first two projects in Queensland.
“Partnering with SC Capital to contribute to a supply shortage solution in retirement living options is very exciting.”
Russell added that, combined with Blue Sky’s existing investment, SC Capital provides an institutional source of funding that will enable Aura to deliver the retirement living lifestyle experience that Australians want.