Sovereign wealth funds China Investment Corporation (CIC) and Singapore’s GIC are believed be competing for a stake in Lendlease’s AUD1.7bn (€1.1bn) retirement property portfolio.
A source familiar with some of the world’s largest investors told IPE Real Estate: “CIC is in the running and I have also heard that GIC is a candidate for the retirement business.”
Lendlease’s group chief executive and managing director Steve McCann told analysts at the company’s full-year results presentation on Monday that Lendlease is looking to take capital partners into its retirement business.
McCann said: “We are in the process of those discussions currently. The aim is to find the right partner at the right price to enable us to continue to grow that business.”
The retirement living sector is the largest investment asset type in Lendlease’s investment portfolio.
Others potential bidders that have been mentioned include Blackstone and Canada Pension Plan Investment Board (CPPIB). The latter already invests with with Lendlease.
Market sources said a decision on the successful bidder could be made as early as within the next month or two.
Lendlease is looking for a passive capital partner, because it intends to remain operator and developer of the retirement villages and expand its platform.
McCann told analysts that broadly, the group’s development pipeline — including for retirement property — is “a differentiator for our investment platform, providing quality products to both Lendlease and our investment partners”.
The Lendlease Australian retirement portfolio comprises 12,600 units located mostly in Queensland and Victoria. It is the country’s largest retirement living operator.
McCann said retirement property performed strongly during the year for the company.
“Average resale (value) was up 11%, reflecting the broader strength of the residential and retirement living market,” he said.
In the past financial year, Lendlease bought two more villages, bringing the total number under management to 71.
Morgan Stanley and Gresham are advising Lendlease on the current sale.
Lendlease, which has been in the retirement sector for more than three decades, started the sale process at least six months ago.
It will also be looking for capital partners for its newly-established portfolio of built-to-rent apartments in the US and the UK.
The company has 850 apartments in Boston and Chicago, developments in the UK and it is looking for build-to-rent opportunities across Europe.
